• Eva Pinter and Peter Bago

Smart Asian FinTech

Fintech is a global trend that is changing our daily lives. It is worth thinking that a few years ago even contactless credit card solutions were new, and nowadays mobile payments are starting to spread. There is no bank that wouldn't want to ride the fintech trends, and after all, whoever misses out will be left behind.

But no matter how global fintech is, the experience is different on each continent. While application-based payment systems are starting to enter Europe, hundreds of millions of users in Asia integrate in their daily lives. We could mention even Africa, where in the absence of mobile Internet, alternative fintech solutions are spreading, such as message (SMS)-based banking, which does not need any internet, and if they get to Internet, they refill their balances.

In our Smart Asian FinTech article, we are looking for answers to these questions, and examining what fintech solutions have spread in Asia. A significant number of applications are available that deserve to be searched for and grouped by trends. Mostly, micropayment systems have general characteristics, while other focused applications trigger basic banking functions such as lending or money transfer. In Asia, Alibaba realized smart that the world was moving in this direction, creating its own payment system, Alipay, and investing heavily in solutions like Yu'e Bao. The latter is not intended as a payment system, but the market has decided and can be used, Yu'e Bao is a money market fund.

The big question of the fintech world, what makes such an idea successful? Maybe the answer can be found in our nowadays life, what we get, gain with it. It is not enough to have basic banking services, what is still connected to it. We think we are getting the answer today because tech giants (GAFA and BATX) have entered this industry, and maybe it will be a solution to reach inside a social network or next to our shopping cart. But it may also be a solution to get the fintech features for the chat program, such as WeChat. Maybe the entry barrier? Which is only 0.1 yuan for Yu'e Bao. For the time being, they do not know the answer, after all, the fintech is also linked to the world of crypto currencies, which for the time being the largest ones have not bitten it, but it is only a matter of time. Nowadays, Facebook has started to design Libra, which will be its own cryptocurrency, and if it succeeds, it will be a big fight between the old banking systems and the new world for customers.

In the fintech world, one aspect is not being considered, the amount of innovation potential in the old banking systems. It seems that there is not much, but the sleeping lion can wake up and if a strong bank enters these markets, it can still be upset. Certainly, these customers can only win, because these basic services are getting easier and faster, we can search for a few clicks and even help with sustainability. The prophecies are on the GAFA and BATX sides when tech giants take over basic banking functions, but then what about the old banking system? We do not think that customers, profit and ultimately their entire world, will pass without a fight.

In our Smart Asian FinTech article, we took the first step to get to know this changing world and try to identify the trends that everyone will meet in the near future. You can search the article for more continents on the blog here, from time to time we report what we have found in FinTech's global world.

Eva Pinter- Faculty of Business and Economics​, University of Pécs

Peter Bago - Corvinus University of Budapest

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