INSIGHTS

The Future of FinTech in Growth Markets

03/01/2023 | Insights by Elevandi and Kapron Asia

Growth markets are a crucial part of the FinTech story in Asia as the combination of technology, and the financial industry have created new solutions for both financially included and excluded individuals and businesses. In developed markets, new solutions bring convenience to typically already-banked individuals. More importantly, they also bring an element of competition that pushes traditional providers to up-level their offerings. Yet inflation, rising interest rates, and geopolitical uncertainty have all radically changed the outlook for the fintech industry as valuations drop and firms consider layoffs. The challenge is no more acute than in growth markets.

The Future of FinTech in Growth Markets report examines the opportunities and challenges for financial technology to thrive in emerging markets. The report written by Kapronasia and based off the Growth Markets track at the 2022 Singapore FinTech Festival, provides a unique look at how VCs are looking at the new normal, the strategies of successful FinTechs in this challenging industry environment, and what we need to do as an industry to advance financial literacy and inclusion.

FinTechs will be an integral part of this future, and indeed already are. In India, these are the start-ups that are enabling lending for merchants using UPI. In Singapore, digital wealth managers allow investors to move money more easily using PayNow. Across the region, agile start-ups are leveraging technology to redefine the customer experience. That is not to say the journey will be easy. FinTechs will have to return to basics and focus on customer issues to build solutions that solve friction points rather than rely on fancy but ultimately unnecessary technology. It is about resilience in the face of adversity. Innovating, but at the same time sustaining.

The FinTechs that can survive will be the ones that find that ever so fine balance.