FinTechs, Investors Fast-Track APAC’s Connected Economy Future

Singapore was already an established top-five global financial center before the global pandemic appeared on the scene, and its status in pure play finance was already trickling down into the FinTech sector, Accelerating Asia Co-founder Craig Dixon told Karen Webster in a digital fireside chat about the connected economy’s global expansion into Asia-Pacific (APAC) in general and Singapore in specific.

But the last year-and-a-half has kicked off a rapid acceleration and investment within the economy as a whole. And not only with firms historically connected with FinTech moving into the space and adding on FinTech elements.

“Razor is a firm mostly connected with consumer electronics in the region, but I can go now to one of my favorite lunch places and pay with RazorPay,” Dixon noted. “I think COVID kind of created a new normal and has dramatically accelerated adoption in Singapore and Asia. And it’s something we’re putting a lot more focus on as well.”

And it’s something the government of Singapore is also putting more focus on as it attempts to build a truly competitive connected digital ecosystem in a small nation. He noted the goal is to leverage the distribution of digital payments licenses to make sure that the market doesn’t become entirely dominated by massive mega-firms. Those firms will be part of the emerging connected ecosystem, but he said he suspects regulators will also license smaller, more innovative and disruptive players to “make sure the big ones don’t get too comfortable.”

Although given how dynamic the market is becoming, and how investor interest is mounting, getting comfortable in a rapidly connecting economy shouldn’t be on anyone’s agenda going forward, he said.

To Super App Or Not To Super App

The super app trend in APAC in general is hard to deny, Dixon said. Vertical players are diving deep to the point of being untouchable in their segment, branching out to develop super apps around initial functionality. Gojek in Indonesia is a critical example of the ridesharing platform now being a go-to for everything from food to financial services to ordering up a massage on demand.

But successful, vertical-jumping super apps are few, and their traction in developed economies has been much lower than what’s been observed in markets like China where super apps have grown to gargantuan size.

“What I suspect we’ll see is not necessarily super apps across so many verticals, but aggregation within verticals,” he said. “And I think we’ll l see larger versions of aggregated technology platforms, and consumers might not even see some of this stuff directly, but we will see it pop up and enable them to reap the benefits of it. And then those consumers will be connected into the apps whether they’re super or not.”

The future certainly holds more platforms and aggregations, he said. Whether that will be super apps as they are currently conceived or whether they will evolve into something else that ends up being a more competitive or valuable offer remains to be seen.

Cryptocurrencies March Toward The Mainstream

Alongside the fate of super apps, there are also the shifting tides around cryptocurrencies that make them something to be avidly watched as the connected economy is under construction, even if the ultimate role digital currencies will play is still up in the air due to genuine uncertainty about their regulatory future.

Singapore, Dixon told Webster, looks like it stands a very good chance of being one of the leaders in the field in all of APAC, although there are undeniably a lot of unknowns surrounding it. As regulation starts to come into focus, the “Wild West” elements of digital currency and developing crypto-based solutions might start to fade out, or at least be better contained.

“I think these things are coming,” he said. “I think this year and next year will be when the regulators make some decisions and put their foot down. But overall, I think Singapore has a good chance, and the regulators have a fairly good history of flexibility and willingness to try new things as long as it doesn’t create harm to the system to be a leader in this area.”

The Innovative Ideas Leading The Field

The connected economy has more onramps than it ever has, created by innovators that are both forming the connections and finding new ways to leverage them. One of the firms Accelerating Asia is invested in — a Bangladeshi startup called Swap — takes smartphones discarded by first-word users, refurbishes them, and then resells them at a very low price to developing-world users, enabling those consumers to access the entirety of the internet for the first time. Another Bangladeshi startup in Accelerating Asia’s portfolio, iFarmer, allows farmers to crowdsource financial support they need, but also to sell their products directly on the market without having to go through the middlemen that have historically eaten up most of their revenue.

The best the connected economy can deliver is a better experience and journeys for all its participants, from the consumer who buys the good, the merchant who sells it and the producer at the start of the chain who creates it, he said.

“That’s what I’m really excited about — having more of that which lets more of humanity do better and live better, and hopefully be happier and create a better lives for themselves and for everyone else,” he said. “The connected economy, we’re seeing, can really deliver that.”