Fintech is booming in Asia Pacific. In 2015, Fintech investments in the region totaled a staggering US$4.5 billion. Just as payments innovation has been a darling of venture capital investors in the US, the picture is not so different in Asia as payments took the largest share of Fintech investment deals at 40%, followed by lending at 25%. However, we see that the next frontier of disruption lies beyond that in investment, security and authentication due to the following reasons:
- Data access, predictive analytics, and machine learning drive investment innovation. Exploding volumes of data are driving new, disruptive products and services. While predictive analytics isn’t new, it has now entered the mass market, becoming more ubiquitous to retail investors. Smaller, nimbler players are now using algorithms to help customers derive insights from data, making predictive analytics more affordable and accessible. There are also B2B Fintech companies that help financial advisors and brokers maximize their clients’ portfolios.
- Identity authentication services take off with interest from financial firms. Meeting AML and KYC requirements is difficult and comes at great cost. It’s little wonder that executives from financial institutions are emphasizing the need for innovation in identity management in general and authentication. A number of firms use voice recognition for identity authentication. Some prefer blockchain to track provenance for luxury goods like diamonds while others seek to protect digital identities with a two-way identity authentication solution.
- Risk management services approach prime time as fraud reaches alarming levels. Financial institutions incurred more than US$16 billion in card fraud losses, with the highest overall rates of card fraud occurring in Asia Pacific. Card fraud not only has a direct financial impact but also causes attrition as customers lose confidence in banks to prevent future fraud. To manage risk, companies are leveraging machine learning and pattern recognition. Other firms track the bitcoin blockchain in real time to help companies accurately assess risk.
Singapore is in a prime spot to benefit from such digital disruption, especially with strong support from the government. The Monetary Authority of Singapore has set aside S$225 million to develop FinTech projects and the upcoming FinTech Festival will provide a platform for collaborations, connections and co-creations within the ecosystem in Singapore and around the region.
On that note, Forrester is proud to be the Official Research Partner for the inaugural Singapore FinTech Festival. What does that mean? We are sharing research reports from our Financial Services: Digital Disruption series which assesses the impact of digital disruptors on retail financial services and how digital teams at incumbents should respond. The following reports are available for download to Festival attendees at this landing page (http://forr.com/sgfintechfest), and we hope these reports will be useful to everyone trying to navigate the wonderful world of digital disruption:
- The Wounded Unicorns Of Fintech
- How To Work With Fintech Startups
- FinTech in Asia Pacific: Disruption Is Brewing In Digital Investment, Security, And Identity
- Four Ways APIs Are Changing Banking
We look forward to seeing you at the Singapore FinTech Festival!