2021: Fintech trends in emerging Asia
The a16z team has come up with one of the best analysis of fintech trends next year.
Extracting their theses to emerging Asian markets churns up five trends to capitalize on.
The evolution and spread of digital financial services is making their models look even more like the mobile carriers of last decade. It thus becomes important to learn from the successes and failures of the mobile business.
The interconnect of national ISO 20022 based interbank payment systems
This seems to be finally becoming a reality. The ‘switch of switches’ will start resembling the HLR, VLR and TAP-X of old. The two variables to watch are whether these national systems try imposing premium fee for interconnect & ‘roaming’ and the role that open-source, freemium models like Mojaloop will play in accelerating the interconnect of PayNow, PromptPay, PayNet, NPP and others.
Offline to online to offline
What the a16z team calls ‘offline is the new online’ is assisted, on-behalf-of consumption of digital services by the next billion in emerging countries. This is the way to reduce customer acquisition costs, drive usage and bridge the literacy gap with a higher spread of low-cost Android smartphones. Expect FMCG majors like Unilever and P&G become bigger part of the game next year.
Round-up insurance
Changing the complex buying behaviour of insurance purchase to simple, impulse driven rounding off will need demonstrable relevance and use of that micro-insurance else the value conscious consumer in emerging Asia will turn her back very quickly
Group buying sprouts
From niche buy-now-pay-later programs to digital B2B marketplaces linking small merchants to their distributors, cashbacks and trade discounts will inject group buying phenomenon in more services.
Asset tokenization
While the developed world remains fixated on BTC/USD and on-ramping institutional flow, seminal programs for tokenized impact investing, agri-supply chains and fractional ownership of local community assets will start.
