The global fintech landscape has shifted dramatically, with Asia emerging as a hub of innovation. Its large population and growing user base make it a pioneer in fintech evolution.

The COVID-19 pandemic has accelerated digitization in Asia, especially in Southeast Asia, where over 60 million people have quickly embraced digital technologies. A significant portion of East Asia & Pacific (19 per cent) and South Asia (32 per cent) remain unbanked, indicating room for growth. 

Despite a global decline in fintech venture capital, the Asia-Pacific region remains strong in investment levels, positioning Asia as a leader in fintech innovation, poised to surpass North America by 2030.

By 2030, BCG forecasts that Asia will lead the global fintech revolution with a remarkable 27 per cent Compound Annual Growth Rate, surpassing North America. The fintech sector is projected to reach US$1.5 trillion in annual revenue by 2030, comprising nearly 25 per cent of global banking valuations.

Competition in the Asian fintech space is fierce, with megacities in the region dominating global fintech rankings.

Competitive landscape: Fintech megacities in Asia

China’s major cities form a unified fintech landscape focused on the domestic market. Recent growth in Chinese fintech has been slower due to strict national regulations and the dominance of tech giants like Ant Group and Tencent.

Beijing stands out as a vibrant venture capital and startup hub with top-tier talent and access to capital, maintaining a pivotal role in global fintech.

Also Read: Unlocking Southeast Asia’s financial potential with AI-powered fintech

Hong Kong is a major player in the Asian fintech arena, known for its strong regulatory regime, state support, and large-scale fintech events. Despite its smaller size compared to mainland Chinese cities, Hong Kong has a significant number of registered fintech companies and has shown remarkable post-pandemic growth.

Seoul and Tokyo also present strong contenders in the Asian fintech race, with sophisticated regulatory environments and government support driving industry growth.

Singapore, Mumbai, and Dubai are emerging as key players in the Asian fintech landscape, each with unique strengths and contributions to the regional ecosystem.

The prospects for Chinese and Indian megacities to lead regional fintech face challenges that require comprehensive solutions and collaboration across institutions.

Looking ahead

Singapore leads with its cohesive fintech ecosystem but can enhance its investment environment. Dubai’s rapid rise in the global fintech scene poses a challenge as it seeks to expand its influence beyond the Middle East and Africa.

As the fintech landscape evolves in Asia, diversity remains crucial, with hubs like Singapore, Dubai, Bengaluru, and Beijing likely to share leadership.

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This article was first published on February 22, 2024

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