A regional trade association says rivalry among the region's financial centers is hurting Asia's fintech competitiveness.
A report released last week by the Asia Securities Industry and Financial Markets Association (ASIFMA) claims Asia's competitiveness in fintech is being undermined by the petty rivalry between the region's financial centers that in turn has generated regulatory complexity and uncertainty.
Hong Kong and Singapore have initiated numerous headline grabbing initiatives in an effort to secure their share of the billions invested in financial technology globally, but the regulatory cocktail is making it tough for firms to scale up, ASIFMA said.
Fragmented Landscape
«The regulatory landscape is very fragmented and a lot of the initiatives, though well-intentioned, are not necessarily well thought through,» commented Mark Austen, CEO of ASIFMA.
However while the two financial hubs have been grabbing most of the financial technology media attention are they really going to be the key fintech leaders.
Soon to be Diluted
Neither centre can boast much of a domestic population when compared to their respective neighbours, and scaling up the technology will surely make its impact felt sharpest in the most populous and largest countries.
The fintech future for Hong Kong and Singapore may therefore end up being as «Innovation Hubs» while the surrounding countries are the ones who implement and benefit from the technology, irrespective of the others regulatory parameters.
Keep a close watch on Thailand, Vietnam and Indonesia as each expands their own fintech community and begin to pull in foreign investors and specialists who see the potential in the large and growing middle class populations.
Dynamic Disadvantage
The same goes for the so called frontier markets such as Myanmar, with a population ten times the size of Singapore, where fintech applications are already allowing consumers to bypass the banking system completely.
Hannah Cassidy, partner at Herbert Smith Freehills in Hong Kong, which contributed to the report said: «By not cooperating on fintech, Asian financial centers are putting themselves at a real disadvantage relative to the rest of the world: that traditional competitive dynamic and rivalry between the likes of Hong Kong and Singapore may actually in this case be a disadvantage.»
