Check out the 10 most successful fintech startups in Asia
The fintech market is huge with an estimated global value of $128 billion in 2018. The compound annual growth rate is forecast at around 25% with the market set to hit in excess of $300 billion by 2022. While there are huge fintech markets spread right across the globe, Asia has become a vibrant hotbed in recent times. We will now take a look at the top 10 fintech startups from Asia and what the future holds for this growing market.
Fintech market in Singapore
Singapore has positioned itself as a leading light in the world of financial technology, otherwise known as fintech. The two companies below give an example of this technology and the ongoing development of financial services.
When you incorporate complex algorithms and artificial intelligence, the end result can be revolutionary. The AG Delta wealth platform incorporates all of these technologies to great effect. The company is constantly connecting new wealth management and investment product providers via their online platform. Digital executions, regulatory compliance, and artificial intelligence create a focus on suitable investments, creating a one stop shop for financial intermediaries and their clients. In isolation, any of these services would be attractive but the cumulative impact is there for all to see. This is a company you will be hearing more about!
Described as the “first fully digital insurer”, there’s no doubt that the founders of Singapore Life have confidence in their fledgling fintech startup. Life insurance coverage is often a complex subject and one which has been crying out for transparency for some time. It is safe to say that Singapore Life has brought this transparency using the latest technology. The acquisition of giant Zürich Life has taken the business to another level. To date, the company has written life insurance cover in excess of SGD$7 billion and this is just the start. The ability to incorporate the latest technology, perfect transparency while finding suitable products for customers is a valuable gift.
Fintech market in China
The Chinese authorities are often accused of restricting entrepreneurship but there have been significant changes in recent times. Even though many businesses are partially state-funded this has not stopped the development of world-leading fintech companies.
The fact that Ant Financial is an affiliate of Chinese e-commerce giant Alibaba Group should not be underplayed. As the most valuable “unicorn company” in the fintech sector it has a valuation in excess of $150 billion. In a relatively short space of time, the group has a client base of more than 900 million users. Using blockchain, artificial intelligence, security, and the Internet-of-Things we are seeing the emergence of a whole new raft of financial services. Targeting the unbanked and underbanked, a huge worldwide market, this company seems to be signing joint ventures every week.
Tiger Brokers was founded back in 2014 and has very quickly become a leading global online broker. Employing in excess of 700 people with offices in the US, Singapore, and China, the group is expanding its reach across the globe. The trading platform offers access to multiple global markets, various asset classes, and numerous currencies. Whether looking for direct investment or exposure to mutual funds, this innovative platform has it all. Investment banking, wealth management, and investor education are elements of the platform which are certainly proving very popular. Tiger Brokers is now in a position where joint venture partners are actively approaching the group – leading to significant natural growth.
In common with the most successful companies of years gone by, Lufax has seen not only significant natural growth but an expansion of services. The group originally started life as a peer-to-peer lender but has since incorporated wealth management services. It is the ability of fintech companies to move very quickly into new markets that makes them stand out. Lufax is fully Internet-based, with an integrated blockchain solution to track transactions between borrowers and lenders. The company continues to grow, clientele numbers are increasing and as of December 2018, Lufax had a valuation of $38 billion.
Fintech market in Taiwan
The fintech market in Taiwan is extremely active, forward-looking, and continually growing. Like so many Asian markets, we are seeing a whole host of new up-and-coming fintech startups emerging.
We know that cryptocurrencies are here to stay, only the strongest will survive and they now have a global appeal. The Far East has been a very active market for cryptocurrencies, something which blockchain and cryptocurrency startup BitoEX has certainly bought into. The company’s bitcoins are tradable both online and off-line with the group already claiming 80% of the Taiwan market. The raising of $12 million back in 2018 allowed the company to expand its digital asset exchange. BitoEX is now targeting India, Malaysia, the Philippines, and Japan as international expansion continues apace.
To many people, the world of hedge funds is a mystery and one for the “rich and famous”. Well, HiHedge has brought this mysterious investment vehicle to the masses. This is a robo-advisor platform that incorporates the latest artificial intelligence and proprietary algorithms. The platform is structured to gather information from clients, and using artificial intelligence, recommend the best investments and the most suitable strategies. While already huge in Taiwan and Singapore, the group is looking to expand into Hong Kong, Japan, South Korea, and Southeast Asia. This is a huge market, often shrouded in mystery, but one which is starting to appeal to the masses.
Fintech market in Hong Kong
The Hong Kong fintech market is one of the leading lights in Asia, despite the ongoing political and cultural upheaval. Thankfully, this sideshow has not impacted natural entrepreneurship, which is part of the psyche of Hong Kong.
Perhaps with a tip of the hat to the UK, the aptly named Bowtie is one of the first virtual insurance companies to focus on Hong Kong residents. This online service allows access to customers 24/7 with innovative technology and complex algorithms pointing customers in the right direction for their requirements. The ability to obtain quotations, underwriting, and claims services has seen a huge growth in the company’s health insurance offering. Supported by leading international insurers and backed by Sun Life no less, Bowtie is certainly a company to watch for the future.
OneDegree is an innovative fully digital insurance platform, which incorporates the latest in artificial intelligence. The company’s impressive credentials, and blue-chip backers, were able to secure a fast-track virtual insurance license for Hong Kong. The company launched its first pet insurance product in April 2020 and will be releasing a range of human insurance products in the coming weeks and months. As the platform continues to grow in popularity, expansion into new markets is inevitable. The mix of innovative technology and enhanced user experience is something many insurance providers/markets are calling out for.
We already know that fintech is having a huge impact on the mortgage market. Roots have taken this a step further by analyzing the behavior of users to identify their needs and financial outlook. By filling in a simple online application form, users will be presented with an array of the best mortgage deals for their scenario. The idea is simple, the concept is seamless and the results are extremely impressive. The ability to use artificial intelligence to scrutinize user social habits and finances, then present individuals with the best deals is mind-blowing.
Investing in fintech
There are many common denominators when it comes to successful fintech companies. These include:
- Cutting-edge interactive marketing strategies
- Ability to move with changing trends
- Deep-pocketed and influential backers
- Laser focus on target markets
- Innovation and the use of artificial intelligence
We can only estimate how many promising fintechs have fallen by the wayside despite their “obvious” innovative business models. Many potentially successful companies will become a victim of circumstance while others may simply have misread the market.
Using the average revenue per user metric
There are many different ways to measure success and to monitor trends in a new innovative company. One of the more useful metrics is average revenue per user (ARPU) but first, you need to know how to calculate ARPU. The formula for ARPU is as follows:-
Monthly revenue / Number of active customers
So for example, if you had a thousand active users and monthly revenues of $100,000, your ARPU would be:
$100,000 / 1000 = $1000
The monthly revenue figure will take in a range of different services and can fluctuate significantly. However, monitoring the ARPU over time will give you an idea of the average income per customer per month. Are there ways in which the company can increase charges? Perhaps they could expand the services on offer? This opens up a whole new world of potential changes, price adjustments, tweaks to marketing strategies, and overall profitability.
The fintech market is revolutionizing the financial sector with relatively traditional areas such as property investment most impacted. The ability to offer services online 24/7 is not new. The use of complex algorithms together with artificial intelligence is new. This allows automated services to fully appreciate customers, their needs, their finances, and their aspirations. The ability to present laser-focused products and services means that the more innovative fintechs are able to secure high customer retention rates.
Many of these high-tech platforms will require significant investment prior to launch. While this investment does not suddenly stop once completed, if structured correctly and offering services that customers require, they can very quickly become cash cows.