New report tracks sharp rise in investments . . .
Although the WeWork fiasco raised concerns about the over-valuation of start-ups in Southeast Asia, global investors continue to express great interest in the region’s start-ups, especially in the financial technology (fintech) sector. A recent report by the United Overseas Bank, FinTech in ASEAN, found that funding into the region’s fintech firms sharply increased from US$35 million in 2014 to US$1.14 billion by the end of September 2019. The report also found higher funding for later-stage fintech firms, reflecting greater confidence in the scalability of fintech firms in the region, and partially attributed the success story to the support of governments and central banks.
Governments are sector boosters . . .
Singapore (51%), Vietnam (36%), and Indonesia (12%) were the top three funding destinations for fintech investment in the region in 2019. Indonesia and Vietnam have generated immense interest from regional and global investors due to their large pool of customers without access to traditional banks. Despite regulatory fragmentation, Indonesia and Vietnam have increasingly shown signs of government support for more robust fintech sectors. President Jokowi of Indonesia recently appointed a CEO of a fintech start-up as an advisor on digital economy, while Vietnam’s government has established a Fintech Steering Committee to promote its fintech sector.
Opportunities for Canada . . .
The Southeast Asian fintech market is diverse and each country has a different growth trajectory – but they are all growing. The stellar growth has driven entry and/or expansion of international players in Southeast Asia’s fintech sector. Britain’s TransferWise recently announced its expansion of partnerships with additional local e-wallet players in Southeast Asian markets, in addition to its existing business in Indonesia and Malaysia. Canada, with its strength and know-how in the sector, could find great opportunities in the Southeast Asia market.
- Nikkei Asian Review: Vietnam closes in on Singapore as fintech funding booms
- Nikkei Asian Review: Indonesia’s President Widodo appoints two more tech executives
- Tech in Asia: TranferWise could become the cross-border engine behind region’s e-wallets