Banking has changed drastically. Branch banking is slowly becoming obsolete, cyrptocurrency is gaining traction, mobile money transfers are becoming common. Banks should use tech to strengthen its processes and reduce costs. To maintain market share, banks have to innovate and design apps to a consumer’s convenience.
Less consumers are holding and using cash now. 20% of consumers no longer carry cash and 47% never or rarely use cash. The trends observed can be attributed to the growing amount of digital payment methods. Furthermore, a survey has shown that majority of merchants stated that increased security from cashless transactions can increase sales.
Many underbanked consumers in SEA do not have credit history and this prevents them from taking a loan. The lack of credit history is especially problematic for entrepreneurs and small businesses from Southeast Asia. CredoApp collects and analyses data from a user’s mobile device to predict credit score which could potentially assist consumers in getting their loan approved with greater ease.
Malaysia is building a holistic fintech ecosystem. Corporations are becoming more receptive to fintech with Maybank seeking to assist fintech startups in understanding regulations and compliance. Government regulations are also changing to allow the financial services to adopt fintech quickly. MDEC’s fintech hub will also allow industry players to work closely together with its accelerator programme co-working space and a startup academy.
Financial institutions are encouraged to adapt quickly and innovate. This is essential to remain relevant in the finance sector. London embraced entrepreneurs and this allowed them to be able to be one of the leading fintech hubs. China, at the forefront of innovation, are 2 years ahead of Silicon Valley. They had $14 billion of transactions which is 2 times more than Paypal.