How fintech is changing finance

There is no question that banks have been keeping a close eye on the development of financial technology (fintech) players over the last few years. From technology partnerships to accelerator programs traditional banks are being made to become venture capitalists to find the best product to fit their needs. Citi for example has their Citi Ventures unit which currently boasts a portfolio of 23 startups.

But why the growing interest in fintech? It’s mainly due to the increasing or potential competition from non-bank players with the likes of Google and Apple flirting with the idea of having a banking service. Already we have seen the rise of full service digital banks in Asia. Just last month for instance South Korea’s financial securities commission issued internet-only banking licenses to Korean internet giant Kakao and Korean telecom operator KT.

“The two banks were chosen on the basis of their stable business models, rather than innovative ones,” explains KyongSun Kong an analyst at financial research and consulting firm Celent. “Both of their parent companies already have a wide customer base which will make it easier for the two new Internet-only banks to build their customer base.”      

However, Korea is not alone here. Increasing amounts of Asian non-bank players are entering the domain of traditional banks. Here are some of the key areas in which they are aiming to make their mark:   

P2P lending

In the market for several years, the idea of peer-to-peer (P2P) lending is still relevant today as it was when sites like US-based Kickstarter hit the scene in 2009. In Asia, there have been a number of companies aimed at providing financing to small the medium enterprises (SME) that often lack credit to sustain their business operations. Monexo founded in Hong Kong is one of those companies that hopes provide an extra boost for SMEs. According to information from Monexo there is a HKD$33 billion (US$4.26 billion) credit gap for SME’s in Hong Kong.     


In modern day society there is always an emphasis on convenience. With the emergence of smartphones 10 years ago, people have gradually gotten use to purchasing goods and making payments via their mobile devices. In Asia many companies have latched on with this trend with Singaporean company Fastacash allowing users to make payments via their social media channels such as Twitter and Facebook. The company like several other payments companies in Asia has been known to forge partnerships with banks such as Axis Bank in the case of Fastacash.    

Wealth management advisory

A fairly new development that focuses on not necessarily interacting with “robots” for investing but instead having an investment strategy governed by computer algorithms. In Asia, we see the likes of Singapore-based Dragon Wealth offering clients a personalized alternative investment solution via their platform that leverages on big data partnerships. With opportunities emerging from Asia’s growing wealth, financial institutions evidently have been investing heavily their wealth management platforms. Charles Schwab launched its intelligent portfolios earlier in the year that focused on automatically picking low-cost exchange-traded funds (ETFs) based on initial investment criteria given by clients.   

Identification and security

Always on the mind of any user of technology is, of course, security. While technology has made great strides in protecting our sensitive information there are still loopholes regarding digital identification in executing financial activities. Though the normal password or bank tokens are ok for now, many financial institutions have begun looking at other convenient methods to identify their customers. One start-up hoping to be utilized by banks is AirSIg. The Taiwanese company founded several years ago has been spotlighted lately by banks such as Citi due to its simplicity. AirSig users login to their banking accounts via an air signature. The company claims that everyone has a unique motion when they sign in the air.      


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