Southeast Asia is the New El Dorado for Fintech

Bangkok, Thailand

The Fintech industry is booming in every part of the world right now — but especially Southeast Asia.

Although you might associate this part of the world with temples, elephants, backpackers, spicy noodles and beautiful beaches — there’s a lot more going on here and Southeast Asia is ripe for opportunity in the fintech sector.

This dynamic region has been poised for technology transformation across many different sectors — such as hospitality, e-commerce, travel and much more. However, it’s the financial services sector that has really been experiencing major growth. The boom began in 2010 in the ecommerce sector, with companies such as Ensogo, Groupon and Zalora. Over the last few years, the focus has shifted towards fintech — with some pretty exciting results.

Let’s take a look into how Southeast Asia has become the new “El Dorado” for Fintech — and some of the reasons why.


A Fintech Boom in Recent Years

It’s clear to see that many investments are being funneled into innovation in Fintech in Southeast Asia — fueling this new world of growth.

In this TechCrunch article, it’s reported that a total of $3 billion was invested in startups in Southeast Asia in 2015 and the first half of 2016. Of this, $345 million went to fintech companies, which is an incredible 21.6% of all funding. According to the latest global report from CB Insights, more than $2 billion was pumped into Asian fintech companies during the first quarter of 2018.

Fintech, aka. Financial technology, refers to any technological innovation involved in the delivery of financial services. This could include banking, investments, digital payments, financing, insurance, advisory services and much more. According to Forbes, there are 50,000 financial and non-bank institutions in ASEAN — as well as more than one million microfinance organizations.

The Factors Behind the Southeast Asia Fintech Boom

Kuala Lumpur, Malaysia

So, why is Fintech thriving so well in Southeast Asia? Some of the factors include the large population and the banking infrastructure. Also, keep in mind that:

  • 70% of the population of the Association of Southeast Asian Nations (aka. ASEAN) are under the age of 40.
  • This area is the 3rd largest economy in the world. The GDP is 2% higher than the global average.
  • The middle class is young, educated and increasingly wealthy — and poised to drive economic growth.
  • As the shopping habits of Southeast Asians shift more towards buying online, the fintech sector will grow even more.
  • Only 27% of the over 600 million people in the region have a bank account. In poor countries such as Cambodia, this falls to 5%. This means that there is a real opportunity for fintech companies to fill this gap with technology — offering solutions for the unbanked.
  • There’s a large migrant population in Southeast Asia, as many people work in one country and send money to families living in other countries. This means that there is a large demand for low cost money transfer services.
  • Due to the fact that so many individuals have no access to traditional banking services, this means that there’s a significant demand for mobile wallets, mobile payment apps and mobile banking.
  • There’s also a huge opportunity when it comes to providing small short-term loans to small local businesses that need to purchase extra supplies. This allows businesses to make more money during periods of high demand, rather than only selling what they can afford to purchase.
  • The fintech sector will also offer the technology that business owners in Southeast Asia can use to benefit from data analysis.

These are just a few of the many factors that come together to form the perfect climate for fintech growth in Southeast Asia. The conditions are right — and the opportunities are many.

What Does the Future Hold for Fintech in ASEAN?


Many Southeast Asian countries are investing in financial technology. In 2015, Malaysia was the first ASEAN country to issue a regulatory framework for equity crowdfunding — which helps to enable market entry for startups. By embracing “sandboxes” this creates a safe space for Fintech providers to experiment and roll out their products.

There have also been a lot of conversations about viability and regional expansion. TechGrind is an organization with a vision to build the next Silicon Valley in Southeast Asia, and it has its eye on Thailand as an advantageous hub for future companies. In order to create a healthy marketplace, they only invest in companies with products and services they believe will be competitive regionally.

Efraim Pettersson Ivener, a founding partner, told Forbes that no matter how great a fintech startup in Thailand is — if they aren’t doing anything regional they will be obsolete in three years. He predicts that if a startup can manage to solve a large problem and they have an international business ability — they will be able to wipe out all of the competitors.

Thai Fintech Association Managing Director Akaradej Disyadej, says he thinks the Thai fintech sector is very strong and that it is capable of competing with the neighboring markets in ASEAN.

Of course, there are some obstacles that need to be overcome. There are tax laws and regulations that can make doing business in this part of the world more challenging. These laws were not created with innovation in mind and they can increase admin work for small companies — as well as require legal consultation that many small startups struggle to afford.

However, with continued effort from investors and entrepreneurs — the Southeast Asian fintech scene is poised to be where all of the action is happening in the next few years. So, stay tuned.

What are your thoughts on Fintech in Southeast Asia? Let me know in the comments below.

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Keep Nomading,

I’m a co-founder at Candy Banners, a digital advertising studio and Stinson Design, the leading presentation consultants in North America. Previously founder of social game Predico and on the board of ad tech company Viewor.
Follow my adventures on Instagram @timgrassin