Research by UnaFinancials forecasts a prominent rise in the proliferation of fintech companies across Southeast Asia. Their analysis envisions that the number of fintech firms per million people could double by 2027, reaching a median of 100 firms. A growing super-platform economy, supportive regulatory frameworks, and advantageous regional economic conditions back this projection.
The assessment of fintech penetration was determined by analysing data from the four main fintech sectors: cryptocurrencies, payments and transfers, digital lending and investments. Their evaluation showed an increase in the average fintech penetration per million people from 20 in 2019 to 46 in 2023. Singapore was the reigning leader with 400 fintech firms, closely followed by Malaysia with 22 and Cambodia with 9.
The analysis also predicts that if macroeconomic conditions for fintech development remain favourable, the number of fintech companies per capita could perhaps double again by 2027. This forecast was made using the moving average method and by taking into account fintech growth rates between 2019 and 2023. The leaders in terms of absolute fintech penetration per capita are expected to be Singapore and Malaysia, boasting 867 and 60 firms per million people, respectively. Other countries following their lead are likely to be Brunei (21), Vietnam (16), and Cambodia (13).
UnaFinancials' analysts explained that one of the significant drivers for this growth in fintech is the flourishing middle class in the region. They provide the example of Indonesia, where their middle class encapsulates 52 million individuals, while the next 40 million sit within an 'aspiring' class, characterised by imminent improvements in income and lifestyle. Furthermore, a surge in the super-platform economy, which includes services such as eCommerce, ride-hailing and food delivery, all requiring digital payments, is also contributing to this boost in fintech.
On top of this, the analysts noted that the regulatory atmosphere across Southeast Asia is particularly accommodating, especially concerning digital technology and fintech innovation. An example provided was a cross-border QR system that facilitates mobile payments and helps streamline licensing for payments and movements of funds within the region. Consequently, this advantageous economic environment will likely help propel the predicted growth in fintech for Southeast Asia in the coming years.
Conductor of the research, UnaFinancial is a group of companies developing easy-to-use digital financial solutions in the Middle East, Asia and Europe. Through its AI-based, machine learning and data-driven technologies and processes, UnaFinancial provides precise and comprehensive risk management, comfort and speed for customers.