Singapore is likely to be the top choice for fintech companies to start their businesses thanks to regulations, government support and funding access, said Astrid Raetze, a partner in the Sydney office who is leading the firm’s fintech group, in a briefing on Wednesday.
A second option would be Australia and Hong Kong would be third, she said.
“Singapore is putting their money where the mouth is,” by making regulatory changes, setting up fintech bridges and encouraging talent to live there. “[Other] regulators in the region are not responding in the same fashion.”
The Singapore government has adopted the “regulatory sandbox”, which allows start-ups to operate businesses without having a full license, while Australia is considering it, she noted. The former has also set up a fintech bridge with UK last month.
She also observed that no Asian banks are participating in the blockchain experiment at the moment, as compared to active development by US and European peers. Blockchain is a public ledger of all financial transactions that have been executed, which can be shared across networks.
In Australia, high costs to acquire new customers online are shifting development of robo-advisers from a business-to-customer approach to business-to-business.
The focus on the B2B side is also likely to be the trend in Hong Kong. “There is more feasibility and potential on the institutional platform in Hong Kong than on the retail side. China has a good shadow over Hong Kong and there are more opportunities there,” said Gavin Raftery, another partner based in Tokyo.
“In the SAR we are seeing fintech working together with financial institutions, as opposed to the disruptive type of fintech,” as banks are already quite easily accessible in Hong Kong compared to the mainland, said Karen Man, a Hong Kong-based partner.
Hong Kong can also serve as a base, or a “launching pad” for Chinese domestic fintech players to expand overseas.
“We are seeing some huge domestic Chinese fintech firms try to go offshore and expand into international markets,” both the developed and emerging markets, Raftery said.
They include some peer-to-peer lending companies, he noted, but some are trying to bring the whole online platform, which includes payment, banking or wealth management, to overseas markets as well.