Why Asia’s fintech landscape is a horizon of opportunity

While fintech has been a catalyst for positive change in financial services for years, evidently, the speed and scale of transformations occurring today, especially in Asia, require a nuanced understanding of how businesses should respond. New technologies are creating bright horizons of opportunity, but questions about what to adopt and how best to utilise these tools remain critical for every organisation. Insights from the recent Money 20/20 event in Thailand offer a fresh perspective on the evolving fintech landscape in Asia and the promising future ahead.

Asia’s fintech scene is seeing a rise in demand for hyper-personalised customer experiences, border-agnostic payment solutions, improved tokenization methods and robust ecosystem networks that support businesses. These advancements are driven by the power and promise of fintech, and greater collaboration between fintech companies and banks such as HSBC. Co-creating solutions has helped the industry become more customer-centric, yet the journey is far from over, with many initiatives accelerating this progress and heralding the next chapter of Asia’s digital story.

New technologies are significantly streamlining business operations and enhancing customer interactions with service providers. This is clearly seen in the rise of AI in financial services, where more tailored offerings and solutions are becoming available to customers. The benefits of this shift towards greater personalisation are immense. McKinsey & Company estimates that globally, banking could see some USD200bn to USD340bn in added value from generative AI capabilities.¹ From data analytics and chatbots to automation and insight generation, AI is helping businesses and banks make more informed and customer-focused decisions.

Customers now expect financial institutions to provide a sophisticated digital experience. This trend is evident in the wealth management space, where digital natives seek advisory services that align with their preferences. Among high-net-worth individuals, Accenture’s Asia Affluent Investor Survey found that a high-quality digital channel experience is the most important factor when choosing a wealth management firm.

Shifting to payments, given Asia’s diverse markets, businesses expanding their operations in the region are prioritising efficient cross-border payment capabilities. Digital tools developed for this purpose offer a significant advantage, enabling businesses to pursue opportunities in new markets without prohibitive costs. In ASEAN, for instance, the value of gross digital payments across its six largest economies is expected to approach USD1.2 trillion by 2025.

As fintech continues to advance, the complexity and range of applications mean that progress is best achieved through collaboration. Tripartite models of partnership, where banks, fintech companies and regulators work together, are becoming increasingly important.

Singapore exemplifies this collaborative approach. HSBC is among several partners working with the Monetary Authority of Singapore (MAS) to foster a supportive innovation ecosystem. Notable initiatives include Project Guardian, which aims to integrate distributed ledger technology (DLT) into Singapore’s US$4 trillion asset management industry, and Project Mindforge, which focuses on building a risk framework for leveraging generative AI in the financial sector.

At the Money 20/20 event, HSBC signed a memorandum of understanding with the Thai Fintech Association to support local fintechs on their growth journeys.

Banks are also working closely with regulators in Asia to test and implement blockchain applications. Orion, HSBC’s digital asset platform, was instrumental in helping the Hong Kong Monetary Authority complete the world’s first multi-currency digital bond offering – a HKD6 billion (USD770m) digital green bond issued across four different currencies (HKD, CNH, USD, EUR). This transaction set a new benchmark for future digital bond transactions.

These show the power of partnerships to drive innovation and unlock the possibilities around fintech in Asia. Banks sit at the centre of this impact and have a distinct role to play in nurturing fintech development in the future.

Digitalisation has in many ways become synonymous with access – to advice, to insights, to solutions, to resources, and to opportunities. Digital ecosystems are enabling businesses and entrepreneurs to thrive by providing the tools they need.

For example, HSBC’s USD 3 billion New Economy Fund offers high potential technology and life sciences startups in Hong Kong and mainland China access to debt solutions tailored to support their growth and expansion in Asia.

Additionally, HSBC’s collaboration with Alibaba’s Entrepreneurs Fund connects promising startups to high profile competitions such as JUMPSTARTER and introduces them to potential investors.

Looking ahead, while the pace of change may not slow, neither will the emergence of new opportunities. Businesses in Asia, supported by banking partners with the connectivity and capabilities to unlock digital-led growth, are well-positioned to capitalise on this exciting and rapidly evolving future.