Speakers at a Hong Kong technology conference have
highlighted differing market features and regulations across
the region’s twenty-plus countries as an important
opportunity for startups.
Panellists at Rise, an industry conference held last Friday and
Saturday said the region’s rising middle class, as
well as its fragmented markets and regulatory systems, present
challenges and opportunities to companies looking to innovate
in cross-border finance.
Tee Plern Suraphongchai of Ardent Capital, a
venture capital firm focussed on Southeast Asia, believes Asia
is the most exciting place to be because of consumer power, and
the demand driving fintech players to innovate.
"At the same time I think it’s still
quite early for the environment," she said, noting that lot of
the regulatory infrastructure is still being developed and
– particularly for Southeast Asia – is very
Fintech opportunities tie into a larger Asian
investment theme across Asia; the targeting of middle-class
consumers. "Ardent is pretty focussed on e-commerce, and we see
fintech as the next extension of opportunities," said
Suraphongchai, noting that the e-commerce focus allows the firm
to understand the challenges of payments in the region.
In Southeast Asia, for example, 60% to 70% of
transactions are cash on delivery. They are interested in both
managing that process at a larger scale, as well as looking
into lending marketplaces to support e-commerce merchants.
Banks and new
Speakers on other panels explained that banks might
become entirely irrelevant in the payment markets.
Asia…that kind of cross-border fintech play is
going to be the really big success story
Tim Lee, founder of Chinese payment platform QFPay,
speaking on a panel on money transfers, thought that
traditional lenders would lose their value in the next 10
But others didn’t think banks will be
left behind. "I’d bet long on financial
institutions," said Edidio Zarrella of KPMG.
He believed that traditional lenders would adapt;
in the future, they won’t be running their
business models as they are today because they’re
aware that consumers are driving change.
Speakers said that those looking to capitalise on
opportunities and inefficiencies in the area must move now.
"The fragmentation, the chaos – that’s
what it’s all about" said Zarrella, who
recommended that market players act quickly.
What could be most important, however, is how
start-ups scale in regions – and even across
"China is the most competitive start-up market in
the world," said Zarrella. He warned that start-ups in the
country must have a clear plan; one city – even half a
city – could take up all of a small
company’s time and funding, if it has no strategy
A different approach is needed in Southeast Asia.
With the exception of Indonesia, Suraphongchai said that
start-ups targeting any part of the region must be in multiple
countries to build the right value.
"It’s less necessary in the US, China
and Europe where you’re already operating in one
currency," she said. "In Southeast Asia…that kind of
cross-border fintech play is going to be the really big success
Ultimately, disruption in the financial industry
may be similar to that seen in the hotel and travel sectors,
said Gerald Eder of Compare Asia Group, a comparison website
for financial products in Asia.
In the past, he noted, people had to trust their
travel agents that airlines and hotels were good. Now those
travel offices don’t exist; instead consumers go
straight to vendors such as Expedia and Tripadvisor.
China begins internet finance clampdown
Singapore regulator backs fintech
HK AML crackdown could stifle fintech