50 Years of Asia: How Asia’s Banks Fight Bank Against Disruption

50 Years of Asia: It’s All About China
9 May, 2019
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Euromoney, May 9 2019

Read the full story here: https://www.euromoney.com/article/b1f9hjbz9fj4ym/how-asias-banks-fight-back-against-disruption

This is the region where fintech disruption has been most potent. Underbanked and with large populations comfortable with smartphones, Asia has been fertile ground for technology-enabled payments providers with a knack for crunching big data.

The most compelling of all themes in Asian financial services in the last five years has been the incursion of tech-savvy non-banks into the payments space. The first mention of Ant Financial in Euromoney came in April 2015; WeChat, January 2014; Paytm, September 2016; and Go-Jek, March 2018. Now it feels like those names have been around for ever.

Over the last three years, we have sought to shed light on the models of these disruptors and have talked to the executives of, among others, Ant Financial, Go-Jek/Go-Pay, Paytm and Grab.

Through these interviews we have learned a great deal about the potency of an offering that reaches the previously unbanked, makes smart use of big data and makes a virtue of simplicity and access. Institutions like these, and in particular those from China, lead the world in this field. They have made cash all but redundant in their markets and are making a fair fist of doing something similar to retail banking.

It is a theme that has its clearest expression in China, which was custom-made for disruption. It has a large population, with a growing mass-affluent young middle class that has been underserved by the banking system; people who are comfortable doing anything on a smartphone, and quite accepting of the privacy compromises involved in big data; a regulatory environment that has been far more benign for fintechs than existing banks; a considerable need for financial inclusion among the previously unbanked; and escalating e-commerce growth.

Not all of those attributes exist in other markets, but three of them – high populations with emerging affluence, comfort with and widespread use of the smartphone and high proportion of unbanked ready for financial inclusion – exist in India and Indonesia, the two other hotbeds of payments disruption.

It is the scale of these untapped markets, married with a newfound ability to reach them, that means Asia, not the US, leads the world in fintech. So how have Asia’s banks responded?

Full article: https://www.euromoney.com/article/b1f9hjbz9fj4ym/how-asias-banks-fight-back-against-disruption?copyrightInfo=true

Chris Wright
Chris Wright
Chris is a journalist specialising in business and financial journalism across Asia, Australia and the Middle East. He is Asia editor for Euromoney magazine and has written for publications including the Financial Times, Institutional Investor, Forbes, Asiamoney, the Australian Financial Review, Discovery Channel Magazine, Qantas: The Australian Way and BRW. He is the author of No More Worlds to Conquer, published by HarperCollins.

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