Asia needs a cross-border fintech policy – Asia Times
Fintech is a rapidly growing sector across Asia, benefiting economies and societies in the region, but some clear – and solvable – challenges remain.
While many of the biggest tech giants are currently based elsewhere, the consumer fintech boom has taken off in Asia like nowhere else.
The existence of large unbanked and underbanked populations, which means there is significant demand for fintech solutions that can help increase financial inclusion, is one of the biggest contributors. Fintech companies are able to leverage their technical propositions to offer products and services to these populations at a lower cost than traditional financial institutions.
Asia’s middle class is also growing rapidly, with demand for financial services that meet their desire for innovative products and services. In addition, many countries in Asia have “mobile-first” economies, meaning that a large portion of the population uses smartphones as their primary means of accessing the Internet, which can be used by firms to provide mobile-based, convenient and accessible solutions .
The growth of fintech has had real, ongoing and tangible benefits across the region, primarily because it increases financial inclusion by providing affordable and accessible services to underserved populations. In turn, this has been shown to help reduce poverty, promote economic growth and improve social welfare, as well as helping to increase financial education and empowering consumers to make informed financial decisions.
In addition to the many social benefits, fintech is a catalyst for economic growth. It has been shown to reduce monopolistic practices, reduce costs for consumers and businesses, improve overall commercial efficiency, create new markets and revenue streams, and reduce systemic risk.
Despite all these significant advantages, the region has many barriers to fintech; among these are regulatory.
Financial technology regulatory frameworks vary between countries in Asia, making it difficult for fintech companies to operate and expand across borders. This lack of clarity and consistency also makes it challenging for investors to assess risk and potential returns.
What is needed is intrastate regulatory guidance that can help ensure that regulations and standards are consistent across different jurisdictions, government agencies and departments.
This can provide clarity for fintech companies looking to invest, reduce compliance costs and help protect consumers by preventing fraud, improving transparency and ensuring that customer data is handled correctly.
With fintech as the inevitable future of finance, if this were to happen, Asia’s global economic dominance would accelerate.
Nigel Green is founder and CEO of the deVere Group. Follow him on Twitter @nigeljgreen.
