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Monday, November 28, 2016

Fintech Revenue to Reach $70B in Asia-Pacific Region

According to the latest market study by Frost & Sullivan, the financial services industry is on the brink of disruption as widening technology use challenges existing products, services and fee structures.

Stakeholders across the traditional global banking, insurance, funding, lending, payments, business and retail finance segments are reviewing processes to align with their digital transformation agenda.

For instance, progressive customers and younger investors are more reliant on digital channels. Similarly, automation is reducing human activity and decreasing costs, creating lower fee structures across the board.

The ongoing evolution of financial services will focus on empowering customers to choose and customize the services they receive or the products they purchase. Market trends to emerge by 2025 include:

  • Pervasive use of convenient biometric authentication.
  • Cloud-based, software-as-a-service infrastructure model.
  • Robot advisors that reduce processing fees for customers.
  • Blockchain technology to revolutionize transaction processing.
  • Big Data analytics driving new Insurtech products for customers.
  • Major investment in machine learning apps and predictive analytics.

Fintech Market Development in Asia-Pacific

The Asia-Pacific landscape is witnessing unprecedented growth with Fintech solutions and services expected to gross more than $70 billion in revenue by 2020, growing at a CAGR of 72.5 percent.

Singapore, Hong Kong, and Sydney are financial services innovation hubs, due to their favorable government regulations, start-up ecosystem and the 18-34 demographic group driving local consumer demand.

The emergence of new business models is enabling vendors to innovate and invest in advanced technologies. Savvy vendors are rethinking strategies and aligning their business vision with bold goals, thereby clearly defining a compelling value proposition for the most informed customers.

"Asia-Pacific grew exponentially in 2015. There was a four-fold increase of investments in Fintech companies from 2014 to 2015, which shows growing investor confidence in the region. Forty-two percent of the investment deals were concentrated on digital payments," said Ajay Sunder, vice president at Frost & Sullivan.

According to the latest analysis from Frost & Sullivan, innovative service providers are addressing unmet needs, embracing new technologies and gaining a disruptive advantage by leveraging diverse market opportunities.