Global Custodian and The TRADE are producing a FinTech supplement available with the next issues of both magazines. The full version of FinTech hubs around the world will be featured in the supplement.
“Journalists can’t write about this, it’s just too complicated,” said Hamilton Ray, the curator and facilitator of the innovation-themed Innotribe sessions at this year’s Sibos expo in Geneva.
Challenge accepted Mr Ray. This year’s SWIFT-run event took place in Geneva and spent time looking at each region’s FinTech hubs and the challenges and opportunities they face.
These hubs are seen as essential in supporting FinTech development in their respective regions, with some emerging over the past year.
We attended each of the sessions and put together an overview of what’s going on in the FinTech worlds across Europe, Middle-East, Africa, Asia and the Americas - with special efforts made to change the mind of one Hamilton Ray.
APAC remains the second largest FinTech space globally.
Having stood at $880 million in all of 2014, FinTech investment more than quadrupled to Fintech Investment in $4.3 billion in 2015, according to an Accenture report.
Zennon Kapron founder of China based Kapronasia, opened his speech at Sibos, by stating “there is no such thing as FinTech, there is just China FinTech”…don’t worry we’re still trying to figure out what he meant as well.
Of that astounding investment rise to $4.3 billion in 2015, the FinTech market in China accounted for 45% of that total.
What China is seemingly lacking is a FinTech ‘ecosystem’ involving both regulators and market participants.
This perhaps puts China at risk of any issues in the market with regards to innovation with the recent boom and bust example of the Peer-2-Peer lending scheme a case in point.
Panellists also indicated a danger of China FinTech “overestimating in the short term and underestimating in the long term.”
Creating an ecosystem
Markus Gnirck partner & co-founder of tryb, suggests that regulatory bodies within China are trying to safeguard this dominance.
“Governments are trying with sandboxes to do more and making it more about putting networks and infrastructures in place for FinTech that are not already in place,” said Gnirick.
“Unlike other regions such as Singapore where there are different infrastructures and ecosystems involved, this ecosystem doesn’t really exist.
“Through platforms and through events, this is the aim for China.”
Sopnendu Mohanty, chief FinTech officer at the Monetary Authority of Singapore emphasised the importance of the role of the regulator in the development of FinTech in the APAC region.
“As a policymaker my job is to look at the hub because by nature of the financial market in the region, the policymaker has an important role,” said Sopnendu.
“You can do a lot of things outside of the regulation such as natural innovation but you just can’t ignore the regulatory impact.”
In spite of such large-scale dominance, panellists all asserted that countries in the region aside from China should be taken into account.
Certainly the developments in Hong Kong with the Hong Kong Monetary Authority (HKMA) announcing plans to launch a FinTech innovation hub and regulatory sandbox allowing banks to conduct testing and trial of newly developed technology on a pilot basis shows its intent.
Development of FinTech in Hong Kong perhaps takes a different element compared to other areas of the APAC region in the fact that ensuring the financial wellbeing is entrenched in the law thus making it more conducive to the development of FinTech and a possible longer term threat to Chinese dominance.
Gnirick also indicated that countries with little FinTech presence may turn into a FinTech force in the coming years.
“Take Vietnam as an example, a country where FinTech doesn’t really exist, there are only 20 FinTech companies in the whole country, but every child in grade six is learning to code,” he added.
“Even Google recognises that the talent available through this country will be greater talent than that in the United States.
“So we should be looking at start-ups in Vietnam, we will see hundreds in the future producing incredible technology.”
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