The findings also correlate with how the region has seen an increase in internet use, the rise of an affluent middle class and consequent demand for financial services. Fintech firms' fundraising has surged this year from 2019.

Singapore is winning the lion’s share of fintech deals from across the ASEAN collection of Southeast Asian countries, and the region as a whole is poised for continued strong financial tech growth, a report yesterday said.

The study by United Overseas Bank, PricewaterhouseCoopers and Singapore Fintech Association, said four in five financial technology firms in ASEAN will push ahead with their expansion plans in the next two years. (The Association of Southeast Asian Nations includes Brunei; Cambodia; Indonesia; Laos; Malaysia; Myanmar; the Philippines; Singapore; Thailand; and Vietnam.) 

Of the total 95 completed deals that took place in the first three quarters of 2020, almost two-thirds of these deals went to fintech firms in Singapore.

Fintech optimism is driven, among other factors, by rising digital adoption in the ASEAN countries, accelerated by the COVID-19 pandemic. More than 40 million new internet users came into the fray during 2020, the report said. Fieldwork for the study was carried out with 100 fintech firms, followed by interviews with venture capitalist firms and fintech founders.

A vast region, often lacking in established banking networks, Southeast Asia is fertile territory for internet-powered banking and finance options, linking up to smart devices and mobile phones. There are echoes of how in Africa, without a widely developed fixed-line phone system, mobile phone use has skyrocketed.

“As fintech firms in ASEAN continue to eye expansion in the region, partnerships will remain integral to driving sustainable growth in a landscape with diverse regulatory and operating requirements,” Janet Young, head of group channels and digitalisation, UOB, said.

Around two in three fintech firms surveyed in the report said that COVID-19 has either had no impact or been a positive one on future fundraising plans (65 per cent) and late stage investment (62 per cent). 

In 2016, there were 1,383 fintech firms operating in ASEAN-6 (Indonesia, Malaysia, the Philippines, Singapore, Thailand, Vietnam), and this number has almost doubled to 2,744 firms this year.

Separately, in November the e-Conomy SEA 2020 report by Google, Temasek and Bain & Company (source: fintechnews.sg), said that fintech companies raised $835 million in the first half of 2020, nearly double what was raised in the same period a year earlier. The number of deals rose by 24 per cent.