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The 3 most important things in Asian fintech right now
Asia is becoming a major force in fintech and its ecosystem is already broad, covering various sub-sectors across payments, lending, data security and risk management - to name a few.
So what’s important? At a KPMG FinTech Forum in Hong Kong today, the industry was boiled down to three main three themes: blockchain, financial inclusion, and regulation. James Mckeogh, a partner with the firm - AKA KPMG Hong Kong's “Mr. Fintech” - explained why they are important:
Forget Bitcoin, it’s all about blockchain - Bitcoin's underlying technology. Over the next 18 months this will be one of the biggest areas of investment for fintech. But its not about handling cryptocurrencies, said Mckeogh, its about using the technology to achieve speed, "auditability," and control on any asset-based transaction. “We are seeing a huge rise in interest in the blockchain and a rise in the development of solutions utilizing blockchain as a protocol, and we will continue to see that rise,” he said. He also predicts the next three months will see the emergence of solutions that will fundamentally change the way financial institutions transact.
This is not about giving money to poor but about making sure the right financial services get to the right people at the right time, said Mckeogh. While a lot of the focus has been on the African subcontinent, there a lot of people under-served in Asia. "This isn’t the non-banked,” said Mckeogh. “This is just these under-banked, and we are going to see Hong Kong play a key role in developing and rolling out the solutions, in order to address that gap.” This space will not only be about technology development but also product development, he added, sharing ideas to come up with the best product to take to the under-banked market.
There is already a lot of development going on to address issues of compliance that arise as banks try to keep up with technology. “Real time monitoring is really coming into play, and we are seeing a real change in how regulatory issues can be addressed,” said Mckeogh. “It comes down to collaboration and the number of the companies that are addressing this issue.” The only way to solve the issues over fintech regulation, he added, was through economies of scale and not working in silos. By sharing information and working collaboratively, banks can affect better regulation and make sure it is geared towards new ways of working in a turbulent time for the financial services industry.
James Mckeogh will join a panel discussion at the NexChange and Cyberport Inagural Fintech O-2-O Meetup on September 22.
Photo: FamZoo staff