SINGAPORE (Nov 16): With countries including Singapore already moving towards a common national payments infrastructure and QR code standard, these trends could soon set the payment standard for Asean in the future, says United Overseas Bank (UOB).

In its new publication produced together with EY and Singapore FinTech Association, State of FinTech in ASEAN, UOB notes that 70% of wage payments and government transfers within Asean – with Singapore as the sole exception – giving rise to a “prime opportunity for digital wallets to thrive”.

The bank believes the momentum of financial technology (fintech) adoption is building, although its speed across Southeast Asia varies.

While the majority of fintechs are still in their early stages of development in the region, it observes a proliferation of digital platforms such as e-commerce.

The bank underscores the idea that the battle for consumer wallet and mindshare will continue to drive investment as Internet giants seek to establish a foothold in Asean – starting from Singapore, Indonesia and Thailand.

The city state, in particular, appears to tick off all the boxes as listed in UOB’s three strategic, critical measures for the continued development of fintech in the region. These are namely:

1. Expanding broadband access to more people and businesses to help bridge the digital divide between rural and urban areas;

2. Creating a unified payment infrastructure to support mobile financial services, reducing the costs and complexities of cross-border payments and promoting financial inclusion; and

3. Harmonising government policies and coordinate legal and regulatory frameworks in the areas of digital identity, privacy, trade and e-commerce.

For one, Singapore comes out top out of 139 countries ranked at the World Economic Forum's Networked Readiness Index 2016, compared to the rest of its ASEAN peers which rank between No. 60-80 – which implies an already-robust structure to support future demand.

UOB also highlights how estimates indicate that combined, Indonesia, Malaysia, Philippines, Singapore, Thailand and Vietnam represent the world’s fastest-growing Internet market, with an existing user base of 315 million forecast to grow to around 480 million by 2020.

“Building the Asean fintech ecosystem is complicated and it involves various market participants and stakeholders coming together and working towards shared goals of a unified ASEAN Economic Community, increased financial inclusion for the unbanked and the seamless cross-border flow of goods, services and payments,” writes Janet Young, Managing Director and Head, Group Channels & Digitalisation, UOB, in State of FinTech in ASEAN.

“Realising the potential benefits fintech innovation can bring to the region will require commitment and collaboration. Banks, fintechs and regulators should continue to collaborate to create an ecosystem to drive greater access to financial services in Asean,” she adds. 

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