From banks to banking, the narrative of Fintech has transformed. This is the core factor for the industry pacing ahead to USD 26.5 Trillion by 2022 across continents and cultures. While the startup crusade has uplifted the common businessman, the demand for loans and other financial products has grown multifold. Therefore, embracing technology to fasten services has made Fintech a lucrative yet challenging line-of-business.
But Fintech isn’t easy. It involves holding and processing the money of a billion users. Even a slight loophole could put confidential data to risk. And that is why most startups either don’t qualify for funding or they prefer easier alternatives.
Despite many hurdles, corporates and startups have shown impressive growth, especially in the South Asian region. India and China have registered an adoption rate of 84% which easily beats the global average (79%).
If so many Fintech applications haven’t seen the Asian dawn, then how did the others make it?
In a recent fin-tech SaaS report, Expersight underscored the key factors that engineered some success stories. In its list, the report acknowledged the following 3 companies that did right what most others didn’t.
The USD 2 Billion backings from Softbank has elevated the Singaporean Fintech company’s stature among the best in the world. What worked for GrabPay is the seamless integration with other apps so that more unbanked consumers could be reached. When most digital businesses are breathing heavily in a pandemic, GrabPay foresees this as a permanent shift to digitization. As per, CEO Anthony Tan, “There has been a permanent shift. “This idea of ‘complete cashless’ food arrives, my e-commerce arrives, my groceries arrive, was a novelty. But now it has become a reality.”
Earlier in 2018, Grab had acquired Uber’s Southeast Asia business.
In less than 3 years, this London-based e-wallet application ushered its way to the Asian market. STICPAY had braced itself for the absolute cultural diversity in the region and managed to connect with the population by localizing its service via regional features as well as multi-language and multi-currency support. Not only did it cemented a strong emotional quotient with the consumer but also positioned the brand among the leading players in this line-of-business. Not to miss, STICPAY is one of the first e-wallets in the world to have included fiat to the crypto conversion of currency value. Eyeing a longer stint in Asia, STICPAY has partnered with local financial service providers to create a more flexible landscape for global cross-border transactions. With local networking, STICPAY seeks to establish a strong presence in Asia while efficiently connecting the continent’s consumers with businesses worldwide,” James Bay,” STICPAY’s Customer Service Director, said.
Alibaba’s explosively successful stint in the digital spectrum didn’t confine to the eCommerce store. As one of the oldest products in the market, Alipay has over 1 billion active users who trust the wallet for sending, receiving, and holding money. Besides enabling consumers to make quick purchases on Alibaba, the payment wallet actualized the trend of paying other bills, a model followed by all other wallets. Forever optimistic founder, Jack Ma affirms, “In the future, every young person and small business will be able to buy, sell, pay and travel globally. This is the trend – no one can stop it,”.
As a source of reference, these brands have mastered the following complexities.
Using automation to build secure platforms
Since money and the personal data of the users is at stake, security will continue to be a leading concern with e-wallets or any Fintech app for that matter. As per Juniper Research, online sellers are likely to lose USD 130 billion to online payment fraud between 2018 and 2023. Therefore, businesses must abide by the essential security features in their wallets such as 2-F-A, Biometric Authentication and Data Encryption.
Security is a common reason for the rise of automation and emerging technologies. Consider AI that is now an integral part of every Fintech application. Not only does it lessens the dependency on manual handling but also ensures quick processing of big data. 79% of global bankers believe AI is a must of digital finance and are ready for POCs. And given the dense population of Asian countries, ensuring safe yet fast data processing gets even more imperative; something most e-wallet products in the market lack.
More Fintech means more regulations
In the last quarter of 2019, the total Fintech investment in Asia touched USD 4 billion. Since the money of more than a billion people shall be held and transferred by e-wallets, an increase in regulations is inevitable. What makes it more complicated is the difference in compliance policies of every government.
Although risk compliance is an integral part of the Fintech industry, many e-wallet players have succumbed to the stringent process. It is important that Fintech companies rewire their outlook towards regulatory restrictions. They must consider risk compliance as a part of their enterprise best practices and not just a bottleneck to bypass. Thus, for a seamless stint in the longer run, companies must adorn a strong foundation in regulatory compliance.
The road ahead
Mobile wallets of the future must be able to execute transactions anytime and anywhere – at the bus stops and with the street vendors. That’s the level of readiness required to excel in Asian countries. If e-wallet businesses don’t innovate with payment methods, their downfall is confirmed.