Asia leads fintech development – IMF
(3 July 2019 – Asia) Asia is ahead of the world in almost every aspect of fintech development according to a new research paper from the IMF (International Monetary Fund).
The paper details the results of a survey of central banks, finance ministries, and other agencies across 189 nations to review country and regional fintech experiences, alongside findings from other regional studies. While Asia is viewed as a leader in fintech, the region’s economies have the highest dispersion in the adoption of digital technologies, which reflect the different levels of financial system development.
The Bali Fintech Agenda (BFA) was approved last year by the IMF and World Bank Group. It lays out key issues to consider in how technological innovation is changing the provision of financial services with implications for economic efficiency and growth, financial stability, inclusion, and integrity. Fintech use in Asia has also expanded beyond payments to include lending, insurance, and investment, such as in China, where fintech services leverage social media platforms. Asian tech giants – such as Alibaba, Tencent, and Baidu in China, bKash in Bangladesh and GO-JEK in Indonesia – have become important providers of financial services, placing competitive pressures on traditional financial institutions, the paper says. The paper finds that while there are important regional and national differences, countries are broadly embracing the opportunities of fintech to boost economic growth and inclusion, while balancing risks to stability and integrity.
The IMF Executive Board believes risks related to financial stability, financial integrity and consumer protection require heightened attention. Also emphasised by the Board was the importance of building regulatory capacity, strengthening cybersecurity, and enhancing data frameworks in relation to fintech. The paper approved by Tobias Adrian, Rhoda Weeks Brown, Martin Muhleisen (IMF), and Ceyla Pazarbasioglu (World Bank) identifies key areas for international cooperation, including roles for the IMF and World Bank, in which further work is needed at the national level and by relevant international organisations and standard-setting bodies.