At a recent gathering of WorldRemit’s top APAC managers in Sydney, we discussed the fintech trends that will have the greatest impact on our company, which is a global leader in the provision of digital money transfer services.
Based on our discussion, developments in infrastructure and partnerships are some of the top trends set to shape fintech in the year ahead. This is what we identified as trends to watch out for.
1. The rise of multi-API open banking
Government and regulators across the APAC region are exploring how to implement multi-API banking in order to empower customers and improve competition in financial services, drive innovation and deliver better customer outcomes.
It’s become a question of when and how these regimes will be implemented rather than if, and some jurisdictions are clearly leading the charge.
The Monetary Authority of Singapore (MAS) has already been encouraging financial institutions to develop and share their APIs openly and has established an API register to promote greater collaboration.
The Financial Technology Enabler Group, formed by Bank Negara Malaysia, is exploring open banking, while the Hong Kong Monetary Authority has also just launched consultation on an open banking framework.
In Australia, pressure continues to mount for open infrastructure. The industry is eagerly awaiting the results of Scott Farrell’s review into an "open banking" model that will inform the government’s implementation of a regime here.
For our business, open banking will likely mean even faster and cheaper transactions for customers as it facilitates payments direct from a user’s account.
2. Greater collaboration and partnerships between traditional and disruptive players
The dynamic between incumbents and disruptors is largely shifting – the ice is melting in what was once a frosty relationship where fintechs were viewed as “the enemy”.
This transition is being driven by evolving technology solutions and regulation that means both sides of the coin can better see the benefits of working together.
These developments have also made it easier for integration and collaboration among disruptive models and products where there are natural synergies.
We at WorldRemit have experienced this in the last 12 months through our technical integration with Apple Pay, Android Pay and Huawei, and see the potential to expand on this through API-integration with banks in the future.
We’re all motivated by the same outcome – delivering more affordable, convenient and safer payment options for customers.
Partnerships and integration with a digital-first model like ours delivers a robust and cost-effective solution to partners who would otherwise have to start from scratch in terms of developing the infrastructure and compliance framework in a highly specialised field.
Memorandums of understanding and other international agreements are also being negotiated to help promote greater co-operation across borders.
This collaboration can take many forms but where we once may have seen more mergers and acquisitions, we’re now seeing more strategic alliances.
Ant Financial’s attempt to acquire MoneyGram in the US is a good example of this. The deal was unable to gain the approval of the Committee on Foreign Investment, but it has been announced that the parties are now exploring initiatives to work together through commercial agreements in a range of markets.
3. Faster, more effective digital payments systems
We know that customers across APAC countries are increasingly moving online. The digital payments ecosystem is fast advancing to help meet the demands of an increasingly digital-savvy consumer.
On a recent visit to China, I was in awe of the sheer volume of cashless transactions taking place all around me. Given this evolution delivers huge benefits for product design, cost efficiencies and customer experience, governments across APAC are looking at ways to replicate the success of China.
For example, the RBA’s introduction of the New Payments Platform (NPP) in Australia is set to facilitate payments innovation and, for the first time, allow Australians to make instant payments between banks and businesses using something as simple as a mobile phone number or email address.
Meanwhile, in Singapore efforts are also being made to streamline and simplify the electronic payments system. The existing e-Payment landscape is fragmented with many different stand-alone systems, which is confusing to both consumers and businesses.
The MAS has introduced PayNow, which is their own take on the NPP and, following a Twitter exchange with the Prime Minister, a number of disruptors are putting forward proposals to roll out a unified e-payments system.
Such a system would deliver major benefits in terms of lower costs for service providers and greater accessibility for customers.
Michael Liu is the APAC regional director of WorldRemit.