SINGAPORE (Mar 14): Financial technology (fintech) firms headquartered in Southeast Asia are optimistic on their prospects of revenue growth, expansion and their ability to take on the international market in the near-term even as funding issues linger, according to the latest study conducted by EY.

The Asean FinTech Census 2018 surveyed a total of 170 Southeast Asia-headquartered fintechs across 16 key subsectors including payments, blockchain, money transfer, data analytics and robo advisory.

Its findings showed that 87% of the firms surveyed are planning to expand beyond their home or current market in the next 12 months, with another 77% of fintechs believing they will be able to compete internationally.

61% of respondents cited achieving revenue growth as their immediate future goal within the next 12 months, with 46% of respondents aiming to attain a compound annual growth rate (CAGR) of 30% for their revenue.

Preferred destinations beyond Southeast Asia are the US, UK and China, with their biggest perceived competitors being traditional financial service providers (33%) and other fintech players (32%).

EY however notes that funding remains an issue, with over two thirds (68%) of respondents stating they have a runway of less than a year to plan and raise funds for growth. Nearly half (45%) relying on self-funding, and 52% still found it difficult to obtain funding on their own.

Yet, this does not appear to stem from the lack of funding channels, as two thirds (76%) of respondents agreed there are enough funding channels available.

“There are many incubator and accelerator programs, and even government channels that fintech firms can leverage for seed funding. More importantly, they should look to access the wider network of business opportunities and investors such as venture capitalists who can help them to scale and also be a source of funding,” comments Liew Nam Soon, Managing Partner, EY Asean Markets at Ernst & Young Advisory.

According to Liew, the strong growth aspirations as indicated by EY’s survey findings are fuelled by Southeast Asia’s offerings as an attractive play for both fintech players and investors.  

“Rapidly expanding economies; young, urban and digitally savvy populations; increasing mobile and internet penetration; and largely underserved small- and medium-sized enterprises and consumer markets, are factors that have led to the rapid adoption of fintech innovation in the region,” he explains.