By Yogesh Sangle, Global Head of Instarem
Since the onset of the COVID-19 pandemic, the digital space has chartered a new way forward for the financial industry, fundamentally shifting the nature of payments globally. This includes the opening of digital banking licences to non-banking players in Singapore and Malaysia, de-banking practices in Australia that impact those involved in the crypto sector, and the evolving regulatory framework across the region. We are looking forward to an even more exciting 2022.
Instarem predicts that 2022 will be the year of travel. With business and leisure travels seeing a significant spike, financial products and services will come back with a bang, including offerings such as new travel deals, smart cards that can help customers save on foreign exchange fees when they travel, and improved mobile applications that help consumers and businesses make payments overseas seamlessly – all to ease travel arrangements and deliver great customer experience.
As markets re-open and cross-border businesses resume, small and medium-sized enterprises (SMEs) will also see an uptick in growth due to a sudden need for quick and easy remittance services.
This will further drive the growth of alternative, neo and digital banks. We can expect these players to expand offerings beyond the payments space through the creation of their own ecosystem or the integration of lifestyle solutions. This trend would not only increase competition but create more options for consumers and businesses alike. On a global level, social media platform Facebook has recently launched of its digital wallet Novi, a blockchain-based platform designed as part of the company’s ‘metaverse’.
The question now is, who will take the lead? In Asia Pacific alone, markets that have earned the status of an innovation hub within the region and around the world are expected to stay ahead. For example, as the region’s business hub, Singapore serves as the APAC base for many global banks. Indonesia, on the other hand, is known as a hub for Fintech start-ups and e-commerce unicorns, with Ula and Xendit being the latest players to receive significant funding in a span of just one month.
One key lesson we can take away from the past year is the necessity of closer collaboration between traditional players and new entrants in a post-pandemic era. For example, while alternative banks continue to drive innovation, most still rely on traditional players and their legacy systems to reach their full potential. Moreover, identifying a market that is underpenetrated presents a good opportunity to work strategically with one another to fill that gap.