With the economic disruption caused by the Covid-19 pandemic and subsequent lockdowns, continuous growth and expansion might be the last thing on the minds of companies and business owners. However, the truth is often surprising. Rather than hunkering down until the economic crisis blows over, four in five financial technology firms in ASEAN have decided to push ahead with their plans for expansion in the next two years.
According to a report by UOB, PwC Singapore, and the Singapore FinTech Association (SFA), ASEAN is the top choice for market expansion for these firms. The region is also favoured as the top destination for expansion by FinTech firms based outside of ASEAN.
The optimism of these FinTech companies stem from the accelerated pace of digital adoption that is currently occurring across the ASEAN region. Spurred on by the pandemic, people and businesses throughout the region have realised the importance of digital transformation and are scrambling to adapt. The report reveals that the region has received 40 million new internet users this year alone. Seventy per cent of the ASEAN population today use the internet and this is expected to continue to increase in the next decade as digital services such as online marketplaces become commonplace.
This macro trend provides FinTech firms in the region an opportunity to provide the growing digitally-connected population with digital financial solutions in areas such as payments and alternative lending.
“As FinTech firms in ASEAN continue to eye expansion in the region, partnerships will remain integral to driving sustainable growth in a landscape with diverse regulatory and operating requirements. Tapping the complementary strengths of a partnership also enables FinTech firms to reach a wider network of customers and to enhance the way in which customers work, live, play and bank. For example, the increasing collaboration between banks and FinTech firms in ASEAN has brought together the best of technology and industry capabilities. This has led to the development of innovative solutions that make banking simpler and more accessible across ASEAN,” said Janet Young, Head of Group Channels and Digitalisation at UOB.
According to the report, FinTech firms in ASEAN continue to have a positive outlook on the future as they take the pandemic in stride. Around two in three FinTech firms stated that the pandemic has either no impact or a positive one on their future fundraising plans and late stage investment. The majority of FinTech firms in ASEAN also said they are on track to ensuring their businesses can last post-pandemic, with a focus on product innovation and driving revenue growth in the next year.