Can European fintechs crack the Asian market?

According to Sifted the jury is out on whether European fintechs will be able to capitalize on opportunities for successful expansion into Asia. While some key Europe based fintechs have been stealthily making moves eastwards, it is certainly the case that for any incoming fintech to succeed, they will need a lot of focus and specialist help to navigate the challenges.

The attraction of Asia, and South East Asia in particular, is clear on paper: emerging but fast growing with large unbanked - or underbanked - and young populations. However whilst Asian regulators might be coming round to the idea of fintech, and starting to embrace the benefits of fintech innovation, incomers will still have to face regulatory barriers to foreign entrants.

In addition to the East v West cultural challenges and the need gain market understanding and local contacts - as well has having to combat local fintech competition - regulatory obstacles take planning, application and expertise to overcome. For example, whilst Singapore launched a new digital banking license regime this year, foreign companies can only apply for the full bank licence by partnering with a local firm to form a joint venture controlled by Singaporean nationals and headquartered in the city state.

For those looking to dip their toe into the payments arena without putting boots on the ground, gaps in the open banking regime also need careful consideration. Singapore is the most advanced country in Asia in terms of open banking and APIs, but utilisation is still low likely due to lack of standardization of the APIs and the lack of common infrastructure and processes. The MAS is exploring new ways in which this problem can be solved and we'll be watching this space and for other regulatory developments closely.