10 FinTech Predictions for Asia in 2016

2015 was the year FinTech became a buzzword. 2016 may be the year FinTech goes mainstream.

Here are some predictions for FinTech in Asia for 2016:

1. Blockchain becomes the new accepted kid on the block

Although widescale adoption of blockchain technology is still far away, 2016 may be the year the banking industry will acknowledge its game-changing potential. In 2016, we will hopefully move from the “What is blockchain?” question to “How can we best employ blockchain to empower our business in the next decade?”

2. Is the CTO the new CFO?

Technology leadership is becoming critical for any bank or financial institution. Expect this to continue in 2016, when the vision, leadership and execution capabilities of the CTO or senior individuals accountable for technological developments, integration and innovation become even more critical and front and center in any financial services firm.

3. Your banking rotation … at a FinTech start-up?

In addition to the various existing accelerator programs where FinTech start-ups can work with banks, 2016 may be the year we see banks increasing their involvement with FinTech start-ups– perhaps even sending some of their junior staff to spend a couple of months with them in the hope that they’ll bring back some of that entrepreneurial culture to within the firewalls of the bank. Developing that entrepreneurial and thinking-outside-the-box mindset will be as important as a three-month rotation in fixed income or investment banking. This will be positive for both banks and FinTech start-ups.

4. More bankers making the FinTech jump?

This will be inevitable in 2016 as some of the younger, smarter and entrepreneurial folks in banks decide to take the risk and venture into FinTech. Most shouldn’t. Despite all the FinTech hype, traditional banks, specially investment banks, still pay well, offer great benefits and remain a great training ground for anyone junior or just entering the industry. However, for those who come across a FinTech start-up they believe will change the world: make the jump. Just remember these don’t come by every day. So choose wisely and don’t join a FinTech start-up simply for the sake of it.

5. Australia’s FinTech potential unleashed?

With its unique combination of a booming FinTech ecosystem, many innovative banks that think like tech companies, a forward-looking regulator, the recent IPO success story of Atlassian and a new prime minister who made his fortune in tech, Australia has a lot of potential – but very few in Asia let alone the rest of the world are aware of it. 2016 may be the year when this will change.

6. “Boring banker during the day, fun FinTech angel by night”

A large portion, if not the majority, of the seed and angel FinTech investors in Asia are current or ex-bankers who see how certain start-ups can either empower or disrupt banks. They actually make for some of the best investors because of their understanding of the industry, their contacts and experience. This trend will increase in 2016 with the addition of those who don’t want to miss the boat … or who simply want a good cocktail story.

7. Forget the unicorns…take a look at the Chinese dragons instead!

For the past decade that I have been in China and Hong Kong, many of my contacts in the West have seen China as a country that simply copies whatever the West does. That has changed. For example, some of the innovations that Alibaba (Alipay) or Tencent (WeChat) have and that are today being used by millions of users do not even exist yet in the West. 2016 may be the year China’s tech and FinTech innovations finally get the respect and acknowledgement they deserve on the global level.

8. More Asian FinTech success stories … giving Tiger Moms peace of mind

FinTech start-ups that can identify and come up with practical solutions solving urgent pain points at banks or new revenue driving tools will be very successful. 2016 could be the year we see such “poster child” FinTech start-ups being acquired or receiving serious investments in Asia. The buzz around these start-ups will be positive for the FinTech ecosystem as young university graduates will finally have entrepreneurs they can look up to … and parents can finally be happy with the idea of their kid turning down a stable back-office job in a big bank to instead launch a FinTech start-up!

9. Some regulatory clarity?

Many hope 2016 could be the year we start seeing some regulatory clarity in some of the various FinTech sectors. Singapore’s MAS or Australia’s ASIC have been great examples of regulators who are trying to work with their respective FinTech ecosystems and this may be a trend others decide to follow in the new year.

10. Going to market by going East?

More innovative FinTech firms based in America or Europe may choose Asia – using Hong Kong or Singapore as entry points – as launch markets. Developing your R&D at home and deploying it in Asia to tap the huge market could be the new trend followed by some FinTech firms, with the catalyst being the large number of accelerators of all kinds that exist or are setting up across Asia, which already receive a large portion of the applications from overseas.

 ***Henri Arslanian is the Head of Corporate Development and Strategic Partnerships at APrivacy, an award winning FinTech start-up based in Canada and Hong Kong. He is also an Adjunct Assistant Professor at Hong Kong University’s Masters in Finance program where he teaches graduate courses on FinTech and Entrepreneurship in Finance.