FinTech solutions and services in APAC to gross over US$70 billion by 2020

Forty-two percent of the investment deals concentrated on digital payments, according to Frost & Sullivan.

By Adrian M. Reodique
Dec. 2, 2016

FinTech solutions and services in the Asia Pacific (APAC) region is expected to amount to more than US$70 billion in revenue by 2020, with a Compound Annual Growth Rate (CAGR) of 72.5 percent, according to Frost & Sullivan.

The research firm noted that Singapore, Hong Kong, and Sydney are innovation hubs because of favourable government regulations, its startup ecosystem, and the 18-34 demographic group which drives the consumer demand.

Meanwhile, the company said the emergence of business models enables players to innovate in technologies such as blockchain, cloud services, cybersecurity, digital payments, and product lines and solutions.

"Asia Pacific FinTech investment increased exponentially in 2015. There was a four-fold increase of investments in APAC FinTech companies from 2014 to 2015, which shows growing investor confidence in the Asia Pacific region. Forty-two percent of the investment deals concentrated on digital payments," said Ajay Sunder, Frost & Sullivan Vice President - Digital Transformation, in a press release.

"Digital payment will remain the largest segment, primarily driven by mobile payment solutions, while Blockchain will not remain limited to financial services; there will be new use cases for Blockchain, and traditional ICT vendors will start offering Blockchain-as-a-Service," Sunder added. 

The new report by Frost & Sullivan titled "Growth Opportunities in APAC Fintech Market" suggests that market players should tap into the following areas for growth:

  1. Adopting new technologies. Companies must research and develop new product capabilities and user experiences by adopting analytics, personalisation, automation, and integration. They must also harness big data to explore new and innovative applications thus generate new source of profit. 
  2. Collaborate. Market players must collaborate with startups to have a scalable impact and pass on the benefit to consumers. Meanwhile, potential investors and leaders must nurture incubation and FinTech ecosystem development.
  3. Foreign Exchange and Remittance. Companies must improve and differentiate offerings and unique value proposition through broader and deeper third party integrations.
  4.  Expanding services. Market players must make their services available and affordable to unbanked people.
  5. Organic/Inorganic Growth. Many mergers and acquisitions are expected as the market consolidates.