BrazilSynechron CEO Faisal Husain outlines the state of play for fintech in Asia
In an ongoing series of articles on the future of fintech, the energetic CEO of technology and business consultancy Synechron, Faisal Husain, has outlined his views on the disruptive technology’s current state of play in Asia.
Faisal Husain was just 26 when in 2001 he and two co-founders launched Synechron, a technology and business consulting firm focused on the financial services sector which has since grown into one the world’s largest and most renowned in its domain – booking revenues of half a billion last year with a staff of over 8000 across 18 worldwide locations, including Singapore, Hong Kong, Japan and the Philippines.
Much of this success rests on the firm’s relentless pursuit of technological innovation, and Husain has during Synechron’s rise become one of the most prominent and respected voices on fintech and blockchain – a subject which is gaining ever more attention in the traditional consulting sphere, and particularly so in Asia; earlier this year, PwC in Singapore and Hong Kong for example picked up a stake in blockchain specialist VeChain.
Previously, Husain spoke to Consultancy.uk on the subject of fintech and blockchain in a wide-ranging interview: “When we look at the FinTech start-up community, while its market share is still small compared to the financial services industry as a whole, the investment and innovation emerging from this space has provided a wake-up call to banks, who have started their own innovation groups and FinTech arms to advance innovation.”
Similarly, he added; “While Blockchain is still a new technology, the start-up community and leading banks have proven its potential to transform businesses and are working on advanced use cases in areas like KYC, Trade Finance, and more. The Blockchain revolution will not happen overnight, but the pace of change is moving rapidly, and those that are aiming to be first followers may find that the time, resources, and effort needed to catch up may be greater than they’ve anticipated.”
More recently in a blog-piece for Forbes India, Husain, who is a regular publisher of articles on fintech and blockchain, looked more specifically into the Asian fintech landscape – a region which last year Husain contended had already ‘leapfrogged’ the West in terms of the adoption of financial technologies, particularly as to Asia’s emerging markets, ‘where fintech is playing a major role in financial inclusions in payments and transfers and microlending.”
In the opinion piece, Husain notes that Asia has a number of favourable advantages, specifically; two of the largest and fastest growing economies, a young tech-savvy population, and a willingness to explore new domains to address a large underbanked community – such as through the financial technologies incorporating blockchain, artificial intelligence, machine learning, virtual reality, and cloud-based software – together, enabling firms to ‘to redefine their value propositions and allowing them to expand their reach without having to incur significant costs.”
Further, the regulatory landscape in Asia is a collaborative one, with a concomitant culture of support and encouragement for local innovation; “The fintech industry has gained a legitimate status and everyone, from banks to government, is starting to pay attention to its development. This has been augmented, in Asia, by a strong start-up culture, availability of venture capital and the need for alternate finance instruments,” Husain writes.
Asia breakdown
The race is on, he says, with Singapore, Hong Kong and Australia are all jockeying to become the premier fintech hubs of the Asia Pacific region. Delving deeper, Husain points to the Singapore government’s efforts to aid fintech growth through the Monetary Authority of Singapore (MAS), which is creating innovation labs for fintech start-ups and taking the lead for regulatory counterparts in neighbouring countries.
As an example, late last year MAS signed an MoU with the Hong Kong Monetary Authority (HKMA) to jointly develop a financial trade network – the Global Trade Connectivity Network (GTCN) – based on distributed ledger technology, with the HKMA in turn recently signing a strategic cooperative agreement with the Abu Dhabi Global Market (ADGM) on the mutual support for fintech innovation in each jurisdiction – these so-called fintech ‘bridges’ becoming an increasingly regular affair.
As to China and Japan, the largest economies of Asia (exc. India), Husain writes that the former has likewise embraced the fintech opportunity by “rolling out reforms to accommodate new products and services,” while the latter, Japan, is taking a traditional wait and see approach to the new technology. However, when Japan does apply new technology, they ‘really transform how it is used,” Hussein says, giving the examples of smartphones and emojies etc.
Lastly, with respect to the remaining countries of ASEAN – Thailand, Vietnam, Indonesia, Philippines, Myanmar, Cambodia, Laos, Brunei – Husain states that while Malaysia and Thailand are making regulatory in-roads, for the region to be truly advanced it will first need to see an “extensive broadband revolution and greater innovation in mobile financial services, ecommerce and connected devices to leapfrog competitors in areas like digital and mobile payments, microlending and digital identity.”
For just Vietnam, a recent report from Asian-centric strategy firm Solidiance projected the local fintech market to surge from $4.4 billion last year to $7.8 billion by 2020 – yet argued that the market still faced certain barriers, such as the lack of regulatory clarity and ongoing awareness and trust issues as to new players in the non-traditional banking realm. Still, the report correlates with Husain’s key points; a young, tech savvy population in a highly underbanked region with an active start-up community and increasingly supportive regulatory framework.
Yet, this hasn’t always been the case, writes Husain in conclusion; “The state regulators did not make things easy, as they were themselves not sure of these new technologies and did not have any regulations to control them. The initial knee-jerk reaction was to label them all as ‘fakes,’ fly-by-night operators who would disappear with the customers’ money. That, however, is no longer the case. The technology function has moved to the forefront of operations, progressing from just being an ‘enabler,’ to being a key driver of a financial institutions’ strategy.”
