Fintech Tech

The Rapidly Growing Use of Fintech in Asia

a businessman using fintech technology

Fintech companies can see that there are great opportunities in Asia, as it is a high growth market for the startup sector. Old companies and new can consider the region to be the best destination for fintech now that technology is absolutely accessible in all parts of the country. Asia is also growing strongly in economy, which is one of the most important essentials for successful fintech business.

A survey stated that more than 60 percent of Asians applied for online loans at least once a year, and 67 percent of them used e-payment and digital wallet services in the past year.

Loan applications on fintech platforms are mostly led by India and Vietnam. This is mainly because their consumers tend to spend a lot despite the low income per capita in both countries. Meanwhile, the Philippines have the lowest online credit services use according to the service.

The study also conveyed that the application for online loan services is mostly due to an immediate need that is unexpected. In India and the Philippines, borrowers were ones who were looking for urgent fintech financing. However, online one in ten people in Asia borrowed online on a regular basis.

E-wallets and online payment as other fintech services fared better than lending. More than half people who filled in the survey stated that they make digital payments more than twice a week.

Meanwhile, digital investment services were the least used. Only 8 percent of people used fintech platforms to invest. In Asia, this number can be explained most likely because of its low daily wage compared to the West.

The highlight of the survey is the fact that it is true that Asia is adopting fintech services and platforms at a speedy rate. However, some financial services are still doing quite poorly. In the least wealthy parts of Asia, people still receive their daily wage in the form of cash that is stored also in cash. Those who still receive their wage this way tend to spend less. Unless with improvement in financial literacy, things can change.

Only 104 million of adults in Southeast Asia are fully banked and have access to financial services out of 400 million. The other 198 million people don’t have rudimentary access to financial institutions, according to a study by Google, Temasek, and Brain & Co.

The problems in the region include infrastructure costs, public registers absence, non-reliable credit information, as well as stringent financial regulations. These problems limit the institutional banks and insurers in their plans to penetrate the region for the better.

Fintechs have attempted to use Asia’s rapid technology innovation to solve that problem that resulted in massive growth in the region’s fintech sector.

It is estimated that digital payment will cross $1 trillion by 2025 and account for approximately one in two dollars spent in Asia. According to the study Google has done, e-wallets is expected to grow at a higher rate, from $22 billion in 2019 to $114 billion by 2025, hopefully a five-fold jump in six years.