Fintech is the confluence of finance and technology, and it is not erroneous to call it the mother of all opportunities. Today digital is the new standard, and the Internet or mobile devices have become the central elements of our lifestyle. The financial services industry has not remained untouched either; the digital wave is morphing the way the customer?s access services and financial products. Responding to this new wave, banks are busy implementing operational solutions and developing new methods to reach, engage and retain customer on non-physical channels.
Fintech will attract up $150 b in investments in next five years
The rise of digital technology has given birth to faster and more convenient payments solutions fanning the expectations of both retail consumer and commercial clients. Startups in the FinTech sector have transformed the way we transfer money between accounts, send it overseas or pay for goods and services. At TNG Wallet too, we continue to redefine the payment services in Hong Kong by setting new boundaries of service, the latest one being the bank transfer and cash withdrawal services for our e-wallet customers.
More and more users are gravitating towards FinTech firms faster than ever before, the 2016 World Retail Banking Report (WRBR) by Capgemini and Efma says that nearly two-thirds of customers (63 percent) are now using FinTech products or services. The users are more likely to refer friends and family to their FinTech provider (55 percent) than to their bank (38 percent).
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By 2017 the FinTech usage will grow further, Forrester predicts that global smartphone penetration will exceed 50 percent, driving more and more people to use them for a variety of needs. In few of the emerging markets, mobile phone ownership has significantly beaten the penetration of bank accounts; mobile has reached people before the bank could. In the next few years, as this trend continues, many users may elect to access financial services through third-party mobile apps, ditching the legacy apps. Considering the quantum of action, Pwc estimates that Fintech could garner up to $ 150b in investments in next three to five years.
Payments is a $ 2 trillion dollar market
In the whole of FinTech space, the payments segment captures the highest amount of transaction volumes, no wonder it has a total addressable market of approximately two trillion dollars, making the payments industry the darling of entrepreneurs and investors. Payments startups have taken the lion?s share of the Investment in the FinTech arena, and this is where banks are seeing fierce competition from the new entrants.
Globally the payments revenues have been growing at rates more than expectations, with APAC being at the center of demand generation. With Hong Kong having the highest adoption rate of 29.1% as per a survey recently conducted by E&Y recently, amongst 10,000 digitally active people in Australia, Canada, Hong Kong, Singapore, the United Kingdom and the United States, the city is all set to define standards for the ASEAN market. At TNG wallet, we have more than 300,000 active customers in Hong Kong, making us one of the leading companies in this segment in SE Asia.
Collaboration between FinTech & non FinTech firms is the future
Even after attempts by many banks to modernize the domestic payment systems, the FinTech market is ripe for innovation and value creation by the startups. The success of PayPal, which has leapfrogged to become the world?s largest financial services entity in its space, stands testimony to the unsatiated user demand. Due to the high growth potential, the likes of Facebook and snapchat have also entered the fray, with Facebook launching peer-to-peer payments using its messenger service and snapchat through snapcash.
The other bigger players like Apple, through Apple pay and Samsung through Samsung pay, are also in the arena. All these players are making a beeline for entering the growing SE Asia market to tap its potential, especially that of Hong Kong and Singapore. To rush is not limited to the big players only, everyone wants to be in this segment; the history stands testimony to the fact that everyone cannot do everything, so the final winners will be the players who are purely focused on this segment and executes it in the best way, day in and out. The consumer selects the final winner, and the winning mantra is an undiluted focus on solving the customer?s pain, and that does need undivided attention.
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Most of the new entrants are not factoring in the impending regulatory tightening of the sector; the winning players will have to balance strategic, tactical, and operational issues in complying with the increasing volume and complexity of the regulation. It's because of this; I say that only players with a singular focus on this segment will survive the marathon. At TNG We have our complete focus on this segment and continue to set new standards for this industry in Hong Kong
Historically, the financial services player have partnered within their industry, sharing noncore processes, thereby helping all the collaborators to reduce their operational costs. In today world, this spirit of collaboration will need to go further to identify and work with other firms who have taken the lead role in the FinTech space. There is a lot to learn from FinTech companies, especially about how they think about the customer proposition and the use of tecIn the next few years, as this trend continues, many users may elect to access financial services through third-party mobile apps, ditching the legacy apps. Considering the quantum of action, Pwc estimates that Fintech could garner up to $ 150b in investments in next three to five years.hnology to deliver value and convenience.
For traditional financial services businesses and other merchants, who want to give their users a simplified payment system, opening another payment startup, is not the best solution. By partnering with specialized providers in the Fintech space they can create better, faster, cheaper services for the end consumers. It is not they versus the payment players; it?s about working and adapting the best technology and service partners to serve the end customer more effectively and efficiently.
If you are you looking to leverage and grow your business by riding on the biggest e-wallet provider in Hong Kong, do get in touch with us to see how TNG Wallet can help you drive your business more efficiently and effectively.
Alex Kong