24 Feb to 01 March
Week 9: a brief look back at some of the fintech news that’s not always picked up.
Canadian fintechs impact on country’s banking landscape
New research suggests that the growth of fintech in Canada is having a big impact on the country’s banking sector.
A number of myths are being exploded, including that fintechs are not just attracting younger Canadians, with the revelation that 46% of fintech borrowers are over the age of 40.
What’s more, short-term loans are not the primary focus for fintechs either, with 88% of fintech loan terms between 13-60 months. And fintechs are not just catering to the ‘underbanked’, as 51% of fintech consumers have three, or more existing credit products.
The study was conducted by TransUnion and analysed over 21 million non-mortgage credit products originated in Canada from Q1 2017 to Q2 2018. The study’s findings reveal key insights that appear to debunk commonly held beliefs around the profile of FinTech borrowers in Canada, as well as the ways that FinTech lenders are employing and embracing different credit strategies compared to some of the more traditional lenders.
“The explosive growth of the FinTech industry has already had a significant disruptive impact on the traditional consumer lending landscape, and has fueled a race for digital capability amongst banks and FinTechs,” observed Matt Fabian, director of financial services research and consulting for TransUnion Canada of Canada. “It is apparent that FinTechs attract Canadian consumers across different ages and levels of credit experience by providing a differentiated, seamless consumer experience. Looking to the future, this creates both competitive challenges and opportunities for increased partnerships between traditional banks and FinTech firms.”
Fastest growing fintech app in Vietnam
Over in Vietnam we heard that ViettelPay, launched by Viettel Digital Services (a member of Viettel Group), was the fastest growing fintech application in Vietnam last year, despite the number of fintech companies having increased by 71% compared to 2018.
ViettelPay has more than nine million users, whilst the number of regular users increased six times compared to the end of 2018.
The average cash flow generated through ViettelPay reached VND 50,000 billion with 40 million transactions.
Among various benefits like transfer to 40 domestic banks, cash withdrawal at all ATMs and Viettel’s service points in Vietnam, users of ViettelPay can also have savings account with an interest rate at over 8% yearly, the highest in the market said the company.
Pham Trung Kien, General Director of Viettel Digital Services, a member of Viettel Group, said: “We want to serve more than 90 million people in Vietnam, regardless of who they are. ViettelPay is a personal financial product for everyone, including those in rural, remote and isolated areas, therefore it must be available seamlessly across the country.”
Chinese investors turn towards fintech
The big take-out from KPMG’s Pulse of Fintech H2’19 bi-annual report on global fintech investment trends is that Chinese investors are starting to turn their attention to new up-and-coming areas of fintech.
Fintech companies in China attracted $962.2m in investments from venture capital, private equity and M&A in 2H 2019, resulting in a total of $4,479m in investments for the whole of 2019.
The report concluded that although fintech investment in China took a breather after a massive 2018, but the country’s fintech market continued to see substantial activity and Chinese companies still ranked among the largest fintech deals in Asia Pacific for the whole of 2019.
Investors in China also began to turn their attention to up-and-coming areas of fintech. These include regtech, which has appeal among VC investors because of its ability to leverage artificial intelligence and machine learning to assess risk and identify fraud.
China-based investors are also interested in fintech companies that use these technologies more broadly to improve the operations of banks and financial institutions, such as improving operational efficiencies, generate and analyse data, as well as support wealth management.
Chris Wang, Partner, Head of Fintech, KPMG China, commented: “China’s central bank and other authority bodies are working to move fintech in the country to ‘2nd half’ as part of their three-year fintech development plan. We anticipate an increased regulation and guidance for the industry and an enhanced infrastructure to support fintech development. For example, sandbox mechanism is being designed and may soon roll out to test the concept of different fintech to make sure they comply with regulations and will achieve the desired results before they enter the market.”