As we kick-start the new year, the jury is still out on whether fintech growth in Asia is merely just hype or it's here to stay.
It appears that 2016 has seen a global shift of fintech activities from the UK and US to Asia.
Research by KPMG and CB Insights showed that in the third quarter of last year, fintech funding for North America and Europe has dropped, while Asia continued to see increased funding for fintech ventures.
In fact, fintech investments in the Asia-Pacific region reached US$10.5 billion (S$15.2 billion) in 2016, a record high since 2010, according to Accenture's analysis of CB Insights data.
Given that 2017 may shape up to be one of the more challenging years for financial markets and businesses in Asia as economies contract further and margins shrink, fintech could well save us from another recession.
At Singapore's inaugural FinTech Festival in November, managing director of the Monetary Authority of Singapore Ravi Menon said in his opening speech that "in an industry facing the headwinds of lower economic growth and heavier regulatory burdens, innovation must be the way to refresh and re-energise the business model".
In the world of private wealth management and banking, Mr Menon's words about "heavier regulatory burdens" might resonate with many relationship managers, who are increasingly handling more paperwork for know-your-customer (KYC) and anti-money laundering processes.
As a result, they are spending less time servicing their clients, who in turn look to external asset managers or in some cases, fintech platforms, to manage and grow their wealth.
As their compliance costs rise, more banks are also consolidating.
Just a few weeks ago, LGT Group bought ABN Amro's private banking business in Asia and the Middle East.
DBS in October announced it was acquiring the wealth management and retail banking business of ANZ in Singapore, Hong Kong, China, Taiwan and Indonesia.
This follows suit from its 2014 acquisition of Societe Generale's Asian wealth-management division.
And earlier this year, OCBC bought Barclays' wealth and investment management business in Asia.
Herein lies the opportunities for fintech, which can offer solutions for banks and their customers at a fraction of the cost.
With the rise of technology such as blockchain, regulatory and compliance requirements can be met with more efficient systems that will free up relationship managers to do what they do best - providing investment advice and seizing investment opportunities for their clients.
Over the next 12 months, we can expect more fintech innovations in the area of private wealth management and banking that will help manage costs for banks, which might stem the tide of further consolidation in the region.
Another development to watch in 2017 is the search for alternative investment platforms that fintech innovations will create.
With the stock market volatility and bond market selloff following geopolitical developments in the US and the UK, investors are looking for alternative markets to park their wealth and alternative platforms to help them access these markets.
A private secondary exchange could be one of these developments.
To improve returns, family offices are also looking for new investment opportunities that fintech will create outside of conventional equity and bonds markets.
According to a September 2016 report by Campden Wealth Research and UBS, the composite global portfolio of family offices had the worst investment performance in three years, only generating 0.3 per cent in returns in 2015, compared to 6.1 per cent in 2014 and 8.5 per cent in 2013.
Needless to say, other segments of fintech - such as payments, cross-border transfers and peer-to-peer lending - will also experience a burgeoning of ideas, innovations and initiatives, in part bolstered by the adoption of regulatory sandbox approach by jurisdictions in Asia.
Singapore and Hong Kong have already launched their initiatives last year. Indonesia, Malaysia and Thailand look to be moving in this direction.
But as the fintech sector becomes more crowded, some market watchers are drawing parallels to the dotcom bubble of the late 90s, which saw the rise and fall of Internet companies such as pet.com and Webvan.
Unjustifiably high valuations, the proliferation of business incubators and the influx of venture capital money ring a familiar, if somewhat uncomfortable tone for those who have lived through the Internet dotcom bust.
We certainly should learn lessons from the past, but a repeat of the Internet boom and collapse - and on a similar scale - is unlikely.
For one thing, we have a larger target market today (that is, the pie is bigger).
In addition, investors are more sophisticated (perhaps having learnt the lesson!) and technology is more advanced.
Still, that is not to say we won't reach a stage where the wheat is separated from the chaff.
Even though the fintech sector is still new, 2017 might well be the year where we see more fintech innovations at the same time more fintech products or companies are being absorbed by larger players who are better capitalised.
At the end of the day, the fintech innovations, brands and companies that are left standing will power Asia's future.
This article was first published on January 03, 2017.
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