The world came to a standstill during the peak of the Covid-19 pandemic in 2020 as the planet worked together to find a vaccine. The FinTech world however, continued to grow and adapt in numerous ways, including the large shifts towards working remotely, online banking and digital financing.
The APAC region (Asia Pacific) was one of the areas that was first hit by the pandemic, forcing them to adapt to new trends throughout the year and lead the way. Here are 5 APAC FinTech predictions for this year:
- The Effects of COVID-19 Will Continue to Influence Consumer Behaviour
A long-lasting effect of Covid-19 will be the further increase of cashless payments. While the number of cashless payments was already rising globally according to a report by Forrester (a 14% increase in non-cash payments between 2018-2019), lockdown restrictions to combat the coronavirus have supercharged the trend. The APAC region was already the global leader in non-cash transactions (243.6 billion cashless transactions in 2019), however a survey conducted by Mastercard concluded that 91% of consumers in the region had transitioned to contactless payments as a result of COVID-19. This has been made possible by billions of mobile payments that have been made accessible via digital wallets. With this trend only likely to increase, financial services that can react to this new consumer need effectively will thrive. - Securing FinTech Investment Could Become More Challenging
FinTech start-ups may find their route to capital more complicated due to increased risk avoidance by future investors. Despite this theme not being solely applicable to the APAC region, but instead globally, the large number of FinTech companies in that part of the world will have to compete for funding with a differentiated proposition and a clear path to profitability in order to secure investment.
- Chinese Development
The people’s Bank of China unveiled its 3-year plan to support the development of the domestic FinTech Industry in 2019. It is expected that this plan will help fuel future investment, particularly in key areas like risk management, cybersecurity, big data, artificial intelligence, distributed databases and authentication. Furthermore, China is set to be the hub of the world’s largest and most sophisticated 5G network. In a $1.4 trillion rollout of technology infrastructure, China will become a world leader in connectivity and communication which is likely to boost their AI and FinTech sectors as a result. This means that competing countries will need to ensure their services remain modern, reliable and effective too. - Increased Spending on the Customer and Platform Strategies
Chief marketing officers will put the customer at the centre of everything they do: leadership, strategy, and operations in order to maximise the full customer lifecycle. As a result, spending on loyalty and retention marketing will increase and we are likely to see significant improvements in CX now that the majority of transactions will be done online. Chief information officers will embrace cloud-first and platform strategies for speed and adaptiveness. Firms will continue to accelerate their spend on cloud, security and risk, networks, and mobility in 2021, with the inclusion of chatbots - one of the most popular additions of 2020. - Remote work will rise to 300% of pre-Covid-19 levels
Most FinTech companies will employ a hybrid work model, with fewer people in the office and more full-time, remote employees. As a major portion of the workforce develops the skills and preference for effective remote work, they will expect a work-from-anywhere tech and culture – triggering major changes in talent acquisition (and poaching).
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