Optimism in ASEAN Financial Technology scene as Singapore and Thailanddraw higher financing This year.
SINGAPORE, November 6, 2024 /PRNewswire/ — Financial technology (FinTech) financing in ASEAN has increased more than 10 times since 2015(1)with exponential growth in global FinTech funding. This has fueled the growth of sectors such as payments and alternative lending, and is poised to advance further with the increasing prevalence of generative artificial intelligence (GenAI) and quantum computing. Launched today jointly by UOB, PwC Singapore and the Singapore FinTech Association (SFA), the digest edition of FinTech in ASEAN Report 2024: A decade of innovation The report summarizes the evolution of FinTech in the region from 2015 to 2024.
Despite the financing winter in recent years due to an uncertain macroeconomic climate, FinTech investments in ASEAN’s six largest economies(2) We finally see light at the end of the tunnel. ASEAN FinTech Funding Totaled 1.41 billion US dollars in the first three quarters of this year (9M24), constituting 4 percent of global FinTech funding, a growth of one percentage point year-on-year (yoy). Although the region’s total funding declined by less than one percent year-over-year, this is a significant recovery from the 71 percent decline seen in 9M23 versus 9M22.
M.S. Janet YoungManaging Director and Group Head, Channels and Digitalization and Strategic Communications and Brand, UOB, said: “FinTech has evolved from a disruptive force to a critical component of financial ecosystems over the last decade. ASEAN’s FinTech sector continues to show promise, supported by the improving macroenvironment and the emergence of advanced technologies. UOB has a long history of supporting FinTech and will continue to seek collaboration opportunities to bring innovation and better solutions to our customers and stakeholders across ASEAN.
Latest report shows regional FinTechs raking in more than 20 billion US dollars in investments over the last decade, with nearly 1,500 transactions. FinTechs in the payments and alternative lending sectors were the most sought after, accounting for more than half of ASEAN’s total financing at the time. 6.5 billion US dollars And 4.1 billion US dollars respectively.
Ms Wong Wanyi, Head of FinTech at PwC Singapore, said: “ASEAN’s FinTech sector is gradually making waves in global waters, demonstrating resilience and adaptability amid macroeconomic uncertainties. confidence over the past decade. Looking ahead, the growing impact of quantum computing and GenAI will continue to push new frontiers in financial services, delivering faster, more secure and smarter solutions. the epicenter of a transformation, where these advancements will not only generate unprecedented growth, but also firmly establish ASEAN as a global leader in FinTech innovation.
M Shadab TaiyabiChairman of the Singapore FinTech Association, said: “It is encouraging to see that ASEAN remains a dynamic hub for FinTech innovation, with the sector demonstrating resilience and adaptability in the face of current volatility. Singapore continues to attract strong funding, thanks to strong regulatory support and opportunities for cross-border collaboration. Looking ahead, SFA remains committed to driving growth in the FinTech ecosystem while creating new opportunities for FinTechs to leverage emerging technologies and strategic partnerships that will further strengthen the ecosystem. »
The next decade of innovation
With the recent interest rate cut by the US Federal Reserve (Fed) September 2024the FinTech industry will likely receive a boost. Lower interest rates generally lead to cheaper financing, greater investor appetite for venture capital and higher valuations, ultimately improving exit opportunities. When the Fed last cut interest rates in the third quarter of 2019 and further lowered them to an all-time low between 2020 and 2021, ASEAN FinTech funding soared and peaked at 6.36 billion US dollars in 2021, the highest amount in the region over the past decade.
Amount of ASEAN FinTech financing compared to US federal funds rates from Q1 2019 to Q3 2024
Beyond an improved macroeconomic environment, FinTechs around the world are poised to enter a new era catalyzed by two advanced technologies – GenAI and quantum computing – that could potentially significantly reshape the financial ecosystem.
During 9M24, global funding injected into the GenAI sector increased by 38% year-on-year. GenAI can significantly improve customer experience in the FinTech sector through innovative personalized financial advice and products, enhanced fraud detection and risk management.
Another promising FinTech sector is quantum computing, which allows financial institutions to develop innovative solutions beyond the boundaries of classical computers. It has the potential to revolutionize the FinTech sector in areas such as optimizing investment strategies and improving security through advanced crypto algorithms.
Singapore And Thailand leading ASEAN FinTech investments in 2024
Singapore captured the lion’s share of FinTech investments in ASEAN for the 10th consecutive year, securing more than half of the region’s total funding with 745 million US dollars in 9M24. Singapore also topped deals with 62 across nine FinTech categories. The Lion City was home to the highest number of FinTech unicorns in ASEAN since 2015, with six out of 16 unicorn companies. Notable FinTech unicorns include Advance Intelligence Group, the parent company of several AI financial services platforms, including the Atome immediate and paid purchase platform; and NIUM, a cross-border payments company that has expanded globally and continued to raise Series E funding this year.
Thailand move up to second place, ahead of last year’s finalist Indonesiawith 341 million US dollars or 24 percent of ASEAN Fintech funding in 9M24, supported by the conclusion of two mega-deals(3). Singapore and Thailand accounted for 76 percent of total FinTech financing and nearly 68 percent of financing deals in ASEAN during 9M24, having closed the only four mega-deals in the region.
Two of the mega deals are seed and startup deals(4) investments of more than 240 million US dollarswhich encourages young FinTechs to represent more than 60% of total financing in ASEAN. This reflects investors’ willingness to capitalize on nascent innovation, and ASEAN is still seen as a fertile ground for new FinTechs to flourish with favorable long-term growth prospects, thereby strengthening the region’s growth in the FinTech field over the past decade.
THE FinTech in ASEAN 2024: a decade of innovation The report was launched today at the Singapore FinTech Festival. For the full report, please visit go.uob.com/fintech2024.
(1) 9M15 versus 9M24 (2) Indonesia, Malaysia, the Philippines, Singapore, Thailand And Vietnam (3) Financing operations of more than 100 million US dollars. The two mega deals of Thailand are: Payment from the FinTech company Ascend Money with 195 million US dollars and financial blockchain company GuildFi with 140 million US dollars. (4) Seed investments refer to seed financing and angel financing; Seed investments refer to Series A or B financing.
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UOB is a leading bank in Asia. Operating through its head office in Singapore and banking subsidiaries in China, Indonesia, Malaysia, Thailand And VietnamUOB has a global network of approximately 500 offices in 19 countries and territories in Asia-Pacific, Europe And North America. Since its founding in 1935, UOB has grown organically and through a series of strategic acquisitions. Today, UOB is rated among the best global banks: Aa1 by Moody’s Investors Service and AA- by S&P Global Ratings and Fitch Ratings.
For almost nine decades, UOB has adopted a customer-centric approach to creating long-term value by staying relevant through entrepreneurship and doing right by its customers. UOB is focused on building ASEAN’s future – for people and businesses within and relating to ASEAN.
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