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How is technology influencing Southeast Asia’s fintech industry in 2020
Last year was all about fintech rising to the digital demands of financial services, and this year the trend will continue, but with a tweak of technologies that are developing fast.
Fintech startups have gained more traction in these parts of the world, and during the first nine months of the last year, a record of US$735 million was invested in fintech ventures for Singapore alone.
It is indicative of the larger investment interests in the fintech industry of Southeast Asia. Though there has been a remarkable development in different fintech sectors, there is a need to tap into some new technological domains for better business prospects.
Many of the countries in Southeast Asia are still developing their bandwidth capabilities, and it is the reason why there has been a considerable lapse in digital financial growth in some parts of the region.
Let us explore some technologies that can affect Southeast Asia’s fintech industry.
Smart devices
Smart devices such as health trackers, smartwatches, smart speakers, etcetera have been in the market for quite some time now, and last year, intelligent devices saw exponential growth with US$73,719 million in 2019 with a compound annual growth rate of 16.6 per cent for the forecast period of 2019-2024.
In 2020, this market will further rise and will allow new ways to provide digital financial services.
Asian markets saw a steep soar of smart device revenues last year, with US$35,756 million and a CAGR of 15.9 per cent. But, when we look at the stats, mainly for Southeast Asia, the smart device revenue sums up to US$1,429 million. Though there is a promising growth rate of 22.5 per cent, there is still a technology gap to be overcome.
Smart devices can affect the fintech industries in the following ways:
- Smart devices can be excellent platforms to support digital transactions and payments.
- These devices can promote financial products through digital marketing.
- Smart Speakers can help encourage speech-to-text transactions.
- There has been a voice commerce market already generating buzz.
- Smart health trackers can help in digital payments and health-related financial services.
The 5G bliss
We all are familiar with the 5G networks to hit most of the parts of the world this year, and Southeast Asia is no different. For the Association of Southeast Asian countries or ASEAN, 5G has a potential market that can benefit both the consumers and enterprises.
For fintech platforms 5G can boost the transaction speeds to help them garner more digital financial services in the region.
With 5G networks, businesses can look to rack up the revenues by almost 18-22 per cent for a forecast period up to 2025, and that can lift the fintech industry to the next level.
The impact of 5G on the ASEAN countries can be a reason to cheer for the fintech industry, with Indonesia set to have the most revenue share followed by Malaysia, Singapore, and Thailand. To deliver such 5G capabilities, operators must oblige a contribution of about US$10 billion into the region’s 5G infrastructure.
Artificial Intelligence
Artificial Intelligence and Machine Learning algorithms can help these fintech platforms use the digital data of users to analyse several spending patterns and spending powers to design personalised lending and credit financial products. As these products are exactly according to the needs of the consumers, they can boost digital front of transactions and money lending for the fintech industry.
ASEAN lags in AI-related technologies, and yet countries such as Singapore have made the most incredible advances in AI-based fintech and machine learning usages in the financial offerings. Still, there are other promising attempts in places like Malaysia and Vietnam.
But, as Mckinsey’s report on Artificial Intelligence and Asia’s future suggests, there will be beneficial advancements in the computational powers of the digital infrastructure, and more data will be available for machine learning algorithms to be applied on from hyperconnectivity.
Voice bots
Voice bots or chatbots have already revolutionalised the customer service paradigm, and many financial institutions and banking industry are already digitising the consumer services more efficiently through the chatbots. Fintech platforms are already relying heavily on the use of such programmed software that can learn from the user data and recommend effective services through the replication of human-like interactions.
But other than consumer support applications, how these chatbots can shape the future of fintech industry in Southeast Asia for 2020?
- These chatbots can be used to achieve relatively important user data through a questionnaire.
- Data received can be analysed for the economic and social backdrop of a consumer.
- We can use algorithms to predict the needs of consumer design specific financial packages.
- These financial products will be an exact match to the need of users.
- And as the chatbots discover need to recommend such products during the conversation.
- It can do so in the most humanised form due to its programming.
Exploring AR
Fintechs and AR (Augmented Reality) may seem a mismatch. But that is not the case. Augmented Reality has been the prime focus for media and marketing purposes these days, and the same can be explored by the fintech industries too. Fintechs can benefit from AR in the following ways.
- Developing apps and AR software using software development that can use AR for transactions.
- Use of AR on Social Media platforms for financial product promotions.
- AR can also be used to provide product demos and live conversations.
- Consumer support capabilities can also be achieved through interactive AR in digital platforms.
It is 2020, and the business world is already looking forward to maximising technologies for higher productivity and revenues.
In this quest for the best, there is no way that fintech can ignore the importance of technologies in their growth and exponential profits in this coming 2020.
Southeast Asian region has the potential consumer setup to explore such technologies and advance successfully.
Source: https://e27.co/how-is-technology-influencing-southeast-asias-fintech-industry-in-2020-20200113/