Fintech: Opening the door to the unbanked and underbanked in Southeast Asia

Opening the door to the unbanked and underbanked

There are 3 critical areas where fintech can and is starting to make an economic impact in Southeast Asia.

Head of Digital Village, Digital + Innovation

KPMG in Singapore


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According to the World Bank, over 2 billion people have no access to banking services, whether payments or lending. Here in Southeast Asia, banking numbers are even more striking: only 27 percent of our region’s 600 million people have a bank account. In poor countries like Cambodia, this number falls to just 5 percent. This lack of access has created major barriers for people to overcome poverty by making it almost impossible for them to borrow or save money.

This is where the real opportunity for fintech lies. With the introduction of new and mobile technologies, Fintech companies can radically shift the economic foundation of the region by creating opportunities for the unbanked to obtain the basic services they need to help improve their financial situation.

There are 3 critical areas where fintech can and is starting to make an economic impact in Southeast Asia.

Providing basic mobile banking services

There’s a large migrant population in Southeast Asia, with many individuals working in one country and remitting money to families living in other countries. As a result, there’s a significant demand for low cost money transfer services – which can be costly for individuals with no access to traditional banking services. In some cases, remittance charges can be up to 10 percent of the transfer amount.

This is why mobile banking, mobile wallets, and mobile payment apps are receiving significant interest in the region. For example, in March 2016, Vietnam-based fintech company Momo, which provides both a mobile wallet and payments app and ‘branchless’ service banking for individuals without a traditional bank account, received $28 million in a funding round.

Providing short-term loans

One of the biggest challenges for small business owners is the need to have money in order to make money. For example, a ‘Mom and Pop’ street stall in Thailand may only have a small sum of money to stock items week to week, making it impossible for the owners to purchase extra supplies that could be sold during the myriad of festivals that take place in the country when demand would be higher. As a result, the owners never have a chance to get ahead or to save extra money.

By providing small dollar-value, short-term loans, fintech companies can provide business owners with the financial support they need to make stock choices and other business decisions more effectively – and to make more money during periods of peak demand, rather than continuing to sell only what they can afford to purchase.

Supporting basic data and analytics

Many unbanked business owners in Southeast Asia would benefit from data analytics. For example, fintech companies that could leverage basic technology to help store owners determine periods of peak demand or correlations between customer purchasing and other factors (e.g. times of the year) could improve the ability of owners to make a profit. When every dollar matters, even basic data analytics could help business owners in the region immensely.

The potential for fintech to reshape the economy of Southeast Asia by providing services to the unbanked is significant. One study suggests that reaching the unbanked population in ASEAN could increase the economic contribution of the region from $17 billion to $52 billion by 2030. In this way, fintech could become a lynchpin for more than just economic change, but for true social change in the region.


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About the author

Jan Reinmueller heads the digital village and innovation ventures program at KPMG in Singapore. As the lead of innovation ventures, he is responsible for turning opportunities into customer-centric products and serves as an innovation partner for corporate clients. His focus is on maximising commercial impact and optimising time in bringing products to market. He drives innovation out of the digital lab by contextualising and commercializing startup innovations to address new market opportunities. Jan brings international experience and knowledge of markets in US, Europe, India and ASEAN.

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