Fintech – Advancing financial services provide more equality and opportunity
The expanding rate of mobile phone and internet use has enabled many people to access services that help facilitate the obligations of daily life. As such, financial technology (Fintech) is being adopted and utilized at a fast rate and aims to compete with traditional financial methods in the delivery of services across the globe.
In Asia, studies show that 3 million people do not have access to the services of a bank or similar financial organization, but advanced mobile solutions and digital background have facilitated the development of alternatives. 5G technology and deployment has also accelerated the availability and equality of opportunities to access financial services.
What activities does Fintech include? Initially referring to computer technology applied to banks or trading firms, can be described nowadays as money transfers, depositing a check with your smartphone, bypassing a branch to apply for credit, raising money for a business startup and managing your investments without the help of a person.
Fintech can operate with artificial intelligence to help customers with basic tasks and keep down staffing costs, as well as fighting fraud – which has become a growing concern as of late.
When coronavirus hit the world, digital payment transaction dropped 30% owing to people accumulating cash for unexpected circumstances amid a wide lockdown.
Fintech services are helping to evolve the world of e-commerce, with smarter, faster and more secure payment platforms. As per Statista estimate, total transactions through digital payment will reach US$4,769,370m in 2020 – a year-over-year (YoY) increase of over 15%. It is important to highlight that the spread of COVID-19 has acted as a catalyst in the growth of digital payment platforms. According to a report from Digital Commerce 360, there was a 33.3% increase in the total number of online grocery orders—62.5 million in April vs. 46.9 million in March.
5G and its active use in the internet of things accelerated financial inclusion in emerging markets in Asia, therefore the unbanked and underbanked are giving more opportunities.
This advancing method of financial transactions will be backed up by the increasing number of smartphone users in Asian countries like 89.9 million in Indonesia by 2022 with penetration rate growing from 26% in 2018 to 33% in 2023.
India may expect to have 36% of smartphone users in the country by 2022 (10% more than 2018).
In addition, the commercial adoption of 5G is driven by the rise of smartphone penetration in Asia-Pacific (APAC) annually by 10.8% on average.
As a result, about 3 million of the unbanked and underbanked will get access to financial services in both Vietnam and Philippines by 2025, Indonesia will have 9-11 million and India-60 million.