The internationalization of capital markets has accelerated over the last few years as ecosystem players such as exchanges and broker-dealers evolve from having a solely domestic presence, to having a more regional and global presence. There are several drivers behind this acceleration, which can be best broken down into demand factors, supply factors, and enablers.
In recent years, banks in the Asia-Pacific (APAC) region have faced rising regulatory scrutiny amid a global fight against money laundering and other financial crime. Banks have been rocked by the massive 1MDB scandal, implicated in the FinCEN papers and are wary of being exposed to the cryptocurrency industry, which is in its nascent stages and lacks comprehensive regulation.
The pandemic forced financial institutions across the region to re-think the work environment. For many staff, this was a benefit as it shortened commutes and often improved productivity. For others, it was more challenging as it meant juggling personal and professional commitments.
As we start 2023, the global market faces a period of great geopolitical and macroeconomic uncertainty. Although there are signs that inflation might be under control and Europe has largely weathered the winter unscathed, many economists see more turbulent times ahead.
Open Banking arose out of a sweeping piece of European Union (EU) legislation known as the second Payment Services Directive, or PSD2, in 2016. It is the use of application programming interfaces (APIs) to streamline the sharing of customer bank data with third parties.
The inexorable march of new technology in everyday life is heavily impacting the nature of financial services in Asia. One area of particular interest is the degree to which financial services are increasingly being provided via non-financial platforms or apps – embedded finance.
The seventh edition of the Singapore FinTech Festival (SFF), which concluded on the 4th of November 2022, attracted more than 62,000 participants from over 115 countries. This was the largest SFF gathering since the inaugural edition in 2016. As we look back at the Festival, it is valuable to consider the role that the Festival has played in the context of FinTech in Singapore and globally.
Global cross-border payment volume is booming, driven by increased economic connectivity and rapid technological advances. The sheer number of rails has led to intense market competition that is gradually redefining the cross-border payments landscape. Financial institutions and fintechs sometime cooperate with each other or bank on one currency corridor and compete on another.
Financial services have evolved over time as banks and other financial institutions have improved the customer experience using digital solutions to make services faster and more convenient. The benefit of these developments has been profound, to the point where banking and financial services have been dramatically simplified and the cost of making transactions has been reduced substantially.
There has been an exponential increase in contactless and online payments, driven by new technology which is leading to growing risks around the handling of the sheer number of disputes and reconciliation with credit card schemes.
Southeast Asia is one of the most rapidly developing regions in the world and is set to become the world’s fourth-largest economy by 2030. However, more than 70% of the adult population across the region have limited access to financial services. Millions of SMEs face large funding gaps. The challenges preventing further take-up of financial services need to be overcome.
Open banking is the use of application programming interfaces (APIs) to streamline the sharing of customer bank data with third parties. While that is the premise of all open banking, there are different “flavors” of it that can be observed across the Asia-Pacific (APAC). At a high-level, these can be roughly parceled into those that are market-led and those that are regulator-led.
As economic dynamism has shifted East to give rise to what has been termed the “Asian Century,” hundreds of millions of people across Asia have achieved middle income status. As affluence across the region grows, people are looking for ways to further build and diversify their wealth.
There is a raft of Digital Asset Tokenisation activity across Asia as many entities are developing and launching new tokenisation platforms. These players range from traditional institutions such as banks and exchanges to ambitious startup Fintechs looking to disrupt the existing modus operandi.
Digital transformation in the financial services industry is proceeding at a rapid pace, driven by intense competition from new players entering the market, the evolution of customer expectations, regulatory pressures, and Covid-19. How are payment players meant to respond to such an unforgiving terrain?