In a way, this is for good reason. As we all know, globally distributed technology, capability and social media means there’s never been a better time to launch a new idea, a challenger solution, or just a better way of doing things.
With this huge wave comes the fight to own the intellectual property (IP) and industry around fintech.
There are dozens of accelerators, incubators, funds and programs to help fintech ideas and start-ups get up off the ground and scale.
Everyone’s searching for the next Asian unicorn.
Then comes the hyper-competitive space of creating ‘fintech hubs’ in cities or nations across the world.
The obvious centres of the financial universe are claiming to be the world’s fintech base.
In Asia alone, at least five cities – Singapore, Hong Kong, Sydney, Shanghai, Tokyo and more – can claim for various reasons to be the region’s fintech hub.
To be the landing and resting place for the world’s best fintech ideas to access Asia and the rest of the world.
Some of these cities have terrific infrastructure: there is government and industry support in Singapore; huge and close market access in Shanghai; and an active and involved banking industry in Sydney.
Others have an active start-up scene: there is vibrant entrepreneurial activity in Jakarta; financial know-how and capital to invest in Hong Kong; creative ideas, technologies and brands in Tokyo; and rich cultural heritage in Seoul.
But not many cities have both elements in the right measure. And of course, all these cities are putting these things right, and that’s good to see.
But in the end, it’s not a race. There needs not be one winner. And there won’t be.
Let’s project forward on the broader fintech path and discuss two major factors.
1. Hyper-localisation
Certain cities, like Hong Kong, with the foresight, resources and will power, will create regional fintech clusters.
Over time, ‘secondary’ markets and cities will start their own alternative and local version of these fintech centres.
Eventually, as technology becomes so ubiquitous, accessible and commoditised, some centralisation will dissipate.
While access to capital and expertise may reside in fintech hubs, the power to create transformative new solutions will sit on the mobile phone of an 18-year-old coder in rural Java as much as it will sit on the tablet of a 30-year-old MBA grad in Tokyo.
These solutions will become hyper-localised, even personalised, and hyper-adaptable to changing conditions.
2. The pace of innovation will increase
Twenty years ago, China was probably most likely known as a manufacturing base for the world.
Designs were sent; they made what was designed. Then the pace of manufacturing increased as technology was able to and demand was asking it to.
Then, copying well-known products became a China specialty – products would land in store, and cheap but quite adequate replicas would be on the street within days, even hours.
Now, China has become an innovation machine in its own right, and with some incredible impact.
Shenzhen is now the centre of the technology revolution in hardware. The pace of invention and creation is furious. This will only increase, and become expected – not just in a few centres, but everywhere.
There will not be a single market or segment in Asia that will remain untouched by fintech.
This is the most remarkable thing about the fintech movement. It will sweep through the most advanced markets and economies, turning the finance and adjacent industries through technology and digital transformation, and it will uplift the least developed nations to a minimum standard that will see a dramatic impact on the way of life of its citizens.
Therefore, no single city in the long term will really own the fintech story; the opportunity is too large for one nation state to own.
Collaboration and cross-pollination between fintech hubs will create more wealth and prosperity than competition.
The moral of the story really isn’t to simply give up ambitions of creating a fintech centre, but to also work together and collaborate across cities and nations to create more powerful ideas together. It’s the way it will be in the end anyway, so let’s start now.
Rob Findlay is the founder of Next Bank, having joined the banking industry in 2007 after many years in advertising and design and relocated to Singapore in 2010.
