There has been an increase in economic activity in the world’s biggest and most populated continent. By 2040, Asia, according to one estimate, might account for as much as half of global GDP and 40% of global consumption.
According to a paper, the “next wave of globalization” will occur in Asia. The GDP of the globe as a whole only comprised 32% of the total in 2000. Currently, it is at 42%, and it can rise to 52% by 2040. It’s hard to imagine that Asia’s economies are expanding at such a rapid pace if you live in the industrialized world.
The Big Leaders
Over half of China’s and India’s active adult customers frequently utilize fintech services, making China and India significant leaders in the region. Asia has set the pace, and it’s not going to slow down anytime soon.
China and India are expected to remain the key hubs for fintech innovation and growth, with 16 and 10 companies working in different domains. Other cities in the nation are also ready to become fintech leaders. Singapore would be strong at fintech since it has already proved that it has a lot of fresh ideas in the industry.
In Southeast Asia, digital financial services generated $11 billion in revenue in 2019. By 2025, this figure is predicted to exceed $38 billion, or 11% of total financial services revenue. With demand for fintech solutions at an all-time high, 2021 and 2022 will be critical for keeping relevance and driving innovation.
Major trending areas include automated finance, mobile payment, and, of course, Blockchain.
PayTech, Open Banking & Growth in cryptocurrency and Blockchain
The epidemic of COVID-19 compelled businesses to enhance automated services. Alipay launched digital solutions to assist local companies in Wuhan, China. This assisted in reviving the city after the harsh lockdown.
In 2020, Malaysia introduced WeChat Pay. It is the first nation outside China to have WeChat available in its native currency. Local institutions such as Hong Leong Bank and Maybank jumped at the opportunity to collaborate. WeChat might replicate this concept in other countries.
ZA Bank Ltd was the first virtual bank in Hong Kong to provide a digital-only banking service. It provided all depositors with a 6% starting rate.
Meanwhile, in Japan, app-based payments will become widespread in 2022. Rakuten Pay, LINE Pay, and PayPay, all of which are supported by the SoftBank Group. Only two years ago, the nation was predominantly cash-based.
Vietnam saw the fastest increase, with mobile payment users jumping by 24% in the last year. Thailand had a 67 percent adoption rate. China is the market leader, with 86 percent of people paying using their cellphones.
Southeast Asia alone has at least 150 e-wallet companies. Most of these applications are operated by IT giants such as Grab, Tencent Holdings, Singapore Telecom, and AirAsia.
Additionally, the epidemic accelerated fintech banking applications and solutions since in-person banking was often unavailable or constrained. Online banking has progressed. As shown by the Singapore Exchange, the tendency has expanded to investing (SGX).
The Singapore Financial Data Exchange launched the world’s first public-private open banking system. Singaporeans now manage their funds via a single, easy-to-use interface.
Other Asian nations are likewise attempting to develop transparent financial systems. DBS Hong Kong developed digital banking to enable SMEs convenient access and reduced paperwork.
Asia is where Blockchain and cryptocurrencies will thrive in the future. According to NASDAQ, East Asia accounted for more than 31% of all bitcoin transactions between mid-2019 and mid-2020.
Asia is a crypto mining hotspot, with China accounting for 65 percent of the worldwide Bitcoin hashrate. South Korea’s market is very receptive to alternative currencies, with over 30% of convenience shops now accepting digital currency. Additionally, Asia has big cryptocurrency exchanges that trade at approximately four times the volume of North American exchanges.
The smartphone game Axie Infinity is helping to alleviate poverty in the Philippines. It is a farming simulation created by a Vietnamese firm that uses Ethereum.
The Asian economy has many businesses, mostly in agriculture and minerals. In the post-war era, industrialization and high-tech innovation changed Asia’s economy. Asia is also one of the most popular places for service-based businesses to set up their businesses there, like outsourcing, IT, and finance. According to Statista, Asia is home to some of the world’s most important financial centers, like Tokyo, Shanghai, Singapore, Hong Kong, and Beijing.