Fintech in the East and West: Differences and Universal Realities

Working in Fintech since 2008, I’ve seen many models emerge and be reimagined. Standardization and cost efficiency have been led by technological improvements. Stages around the world from Toronto to Paris to Singapore have showcased how finance is changing and evolving through the embrace of Fintech. This has been a global phenomenon since the very start, yet its development is not linear and the spearhead varies from region to region.


I recently had the opportunity to host and sit down with a leading Fintech pioneer in Singapore and exchange views on these spearheads. Singapore has adopted a strong position in establishing itself as the Fintech hub for Asia and make significant investments in the sector, such as setting up a regulatory sandbox and strong incentives for companies in Fintech.

It’s apparent there are differences with adoption in different parts of Asia versus North America and Europe. However, there are many universal realities that resonate irrespective of location.

Applications – Wealth Over Private Equity

Through our conversation with our Singaporean partners, the difference in Fintech applications in market segments became clear. There is a prevalent focus on wealth management in established financial hubs in Asia, such as Singapore, and applications of Fintech such as robo-advisors and wealth chatbots have really taken off. With a significant segment of the market embedded in wealth management, it’s a clear sector to embrace the benefits of Fintech (which we will explore shortly in the universalities).

With vastly different regions and economies in Asia, there are also different corresponding strengths and opportunities. Strong established finance hubs may have a more traditional outlook on Fintech, leveraging roots in for example comprehensive wealth management practices, wherein emerging markets in Fintech such as Indonesia, Malaysia, Vietnam may present broader opportunities to change the entire fabric of financial models utilized.

A different reality is true especially in the US, where private equity models, including venture capital applications, are the norm. Certainly, there are robo-advisors as well, even launched by prominent firms such as Vanguard, yet private equity applications and private debt, even retail models are multiple in the US. Just look at how far Goldman Sachs has come with personal online lender Marcus, reversing over a century of policy and entering the retail market and even with Marcus Goldman’s name at the helm.

Wealth management is also characterized by heavy pressure and a true paradigm shift after the financial crash. The market is clamoring for transparency, there is an increased pressure on margins and no one quite knows what to do with millennials that soon will have money to manage. Innovate too fast and you alienate a lucrative client segment, innovate too slowly and you go down in history as a firm that failed to keep up.

Reducing Costs by a Magnitude of 100

With the high pressure on margins, wealth management is a logical sector to embrace Fintech and standardize processes. Through standardization of cumbersome and cost-intensive processes, such as new client onboarding, KYC, and diligence, these can be structured and even automated. This brings about a clear reduction of cost and by changing cost structure, operators can expand and provide further client value.

Despite the applications varying around the world, an increased competitiveness found in the standardization of processes and requirements and their automation is clear. By being able to dramatically decrease cost, opportunities for serving new client segments, for different private equity models are within reach.

This can be as simple as a bank now being able to lend to a small business that it has been unable to lend to since the financial crash, all due to the fact that they now operate on a standardized technology stack that uses AI to power mundane tasks and harnesses the data for data driven decision making in underwriting. This is a universality that transcends location, where we will see Fintech not only be a growth platform but a reality across all business lines. Where functions can be standardized, they can be made more competitive.

Regions around the world are setting themselves up as Fintech hubs, embracing the fabric they already have. We are excited to see the opportunities and possibilities as the transformation continues.

This post originally appeared in Let's Talk Payments.