Fintech has already helped 438 million unbanked people in Southeast Asia. According to the study, 28% of the payments sector may be taken by fintech industry by 2020. It shows that fintech industry is growing and people can adapt with each development done by the fintech industry.
Fintech also gives an impact to the world which it changed the consumer behavior. It’s good for fintech industry, but it’s not easy to have any opportunities and challenges that fintech needs to face in the near future. Here are the opportunities and challenges for fintech in Southeast Asia.
The Opportunities for Fintech in Southeast Asia
According to
TechinAsia, fintech in Southeast Asia increases 230% in Q2 for investment. This might be because of the opportunities that they get. They stated that Singapore leads the way and followed by Indonesia and Malaysia. Some opinion stated that, banks is not fintech’s threat. Click here.
But for fintech, banks are their partner they can collaborate to do business. Without bank, fintech can’t alive until now. Different fintech company will face different an opportunity. For example: Singapore, Indonesia, Malaysia and Thailand.
The Major Challenges for Fintech
1. High Cost
The biggest challenge for fintech startup is the cost. Even for any businesses, cost will be the first challenge for entrepreneurs. Of course, cost will be high once entrepreneur or fintech want to start the company. For example, fintech startup need know their marketing budget. To do marketing activity is not cheap and easy. It is either fintech needs to hire expert workers or spend money to do aggressive marketing.
2. Regulations
It’s not easy for fintech to be started at any countries. This is due to the strict regulations of some countries. Some of the fintech companies need to wait to get licensed on time. In fact, there are a few regulations that fintech needs to follow such as, AML regulations. Fintech needs to provide services that are complying to the AML regulations.
3. Funds
Getting funds is very difficult for fintech. This is because they are new in the industry and still do not have ability to sustain. So investors might hesitate with the fintech company. For instance, in 2015, there was a reduction on funds for fintech, thus fintech has a really limited source to develop.
4. Have good team members
Having a great team is the very first aim in every company. But it was hard for fintech because to hire the good workers and staffs, they need to give high salary. As we know, fintech has limited resource and it is still considered as a very small industry. So it is so challenging for fintech to have good team members.
5. Explain value proposition to press and investors
As mention above, fintech is financial institution. Which means, it was intangible goods (can’t be seen or touch). So it’s hard for fintech to explain more to any press and investors. If both do not understand on what is fintech is, they will give wrong information and misunderstanding. So fintech should tell with efficient ways to make them understand.
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Conclusion
To conclude, fintech industry can keep going as long as they take the opportunities that suit them. In addition, they can also manage to overcome all the challenges that they need to face. We can see now how fintech is advantageous to many people and organizations, even they also have challenges that they need to face.
| About the Guest Author:
Nabihah Jasri is an intern researcher for a marketing department in a
fintech company.