1、2022 Asia Pacific Fintech TrendsThe future of fintech in a post-COVID worldA report from Kapronasia January 2022ContentsIntroduction 2Changing landscape of BNPL regulatory oversight 3Green Fintechs-the next disruptor in the green finance?5The Rise(and Fall)of Asias Digital Banks 7Embedded payments a

2、nd evolving channels 9Cross-border real-time payment linkages 11Regulators in Asia turn the spotlight on digital assets 13The Platformification of APAC Banking 16eCommerce marketplaces building inhouse payment arms 18Central Bank Digital Currencies 20The Rise of Infrastructure-as-a-Service 22Methodo

3、logy Kapronasias 2022 Asia Pacific Fintech Trends is based on both primary and secondary research that the Kapronasia team collected over the course of 2022 and is meant to be a insightful,but by no means exhaustive,look at the key trends that we feel will define 2022 and the Asia Pacific financial

4、industry.22022 Asia Pacific Fintech TrendsIntroductionThe COVID pandemic has forced Asias financial institutions to completely re-think how they deliver products and services.For traditional financial institutions,this meant providing more customized value propositions as the industry sought to sell

5、 to an audience of one.It seemed to work,as many of Asias large banks posted record profits in 2020 and 2021.With an increasingly fickle customer base that is looking for an anytime,anywhere,hyper-personalized service,the banks have their work cut out for them.Fintechs were not to be left behind and

6、 also took advantage of the digitization wave to capture more market share in everything from robo-advisory to payments.Increased VC funding minted some new home-grown unicorns as Grab finally listed.Yet certain segments of the fintech industry faced their own challenges.The super-hot BNPL segment s

7、tarted to cool as providers globally saw their market capitalizations plunge;Australias BNPL darling Afterpays stock,is down 60%from its peak.Further,some crypto-reticence appeared as the Monetary Authority of Singapore started making decisions on the 150+digital payment token licenses that had been

8、 submitted;so far only a handful have received approval.The further banning of crypto-advertising in the city-state seem to indicate that it may not be a crypto-haven after all.That is not to say that everything went smoothly for the regions banks either.There were a number of notable outages in the

9、 region and increasingly sophisticated fraud,especially in Singapore,which cost consumers millions of dollars.This then begs the question of what 2022 means for the fintech industry.The era of cheap money seems to be coming to a close as the US government realizes that inflation actually is a thing

10、and helicopter money has its limits.As a result,there will be a significant impact on fintech valuations and business models in fintech globally,but especially in Asia which has attracted an incredible amount of VC funding at very high valuations in 2021.In addition,despite all of the digitization,o

11、ne has to wonder how much will stick.Many,including ourselves,have said we are in a new normal,but are we?Is it not maybe just a temporary normal?Already in 2022,work-from-home stalwarts like Peleton and Zoom are drastically under performing the broader market as people return to the office and thei

12、r gyms.Could it be that in 2022,as we come out of the worst of the pandemic,things just go back,at least somewhat,to what they were?A visit to Singapores packed CBD would seem to indicate that for many,the pre-pandemic life is nearly back.My intro to our 2021 report started off with cautious optimis

13、m as we looked at a year ahead filled with promise and opportunity.In 2022,the opportunity is still there,but it is certainly becoming more cloudy.So it is with hopeful optimism that we bring you our eleventh annual Top-10 Asia Pacific Fintech industry trends report looking at ten key developments t

14、hat we feel will impact the industry going forward.As always,we wish you a safe and healthy year and hope you enjoy reading the trends as much as we enjoyed researching them.Zennon Kapron Director,Kapronasia32022 Asia Pacific Fintech TrendsChanging landscape of BNPL regulatory oversight Assessing th

15、e role and purpose of buy now,pay later(BNPL)in the local context(emerging markets as compared to developed markets)will likely be a key consideration that affects regulatory decisions.We are unlikely to see a massive crackdown in developing markets.Developed will be a different story.BNPL has rapid

16、ly become a global phenomenon and particularly so in emerging Asian economies where low card penetration rates have led to the rising popularity of non-card alternative payments.For many industry observers,it seems like it will only be a matter of time before regulators step in with restrictions tha

17、t curb the growth of BNPL players.However,we observe that BNPL potentially serves a different purpose in emerging markets as compared to developed markets.Thus,assessing the role of BNPL in the local context will likely be a key consideration that affects regulatory decisions.Genuine support for fin

18、ancial inclusion in emerging marketsIn Southeast Asias emerging markets as well as India,much of the population lacks access to formal credit.Credit card penetration in India,for instance,is estimated at just 3%.MobiKwik,a BNPL firm active in India backed by Abu Dhabis Investment Authority,estimates

19、 that just 60-70 million Indians have access to credit today,or 7%of the population.With 93%of Indians unable to access formal credit,it is likely that the Reserve Bank of India(RBI)will recognize the potential advantages of BNPL in the absence of other convenient options.However,there is potential

20、for BNPL to become problematic without a more comprehensive regulatory framework.In the case of India,it is possible that defaults from BNPL customers with limited or no credit history could be higher than reported as it is unclear whether all BNPL platforms are reporting accurate default informatio

21、n to credit bureaus.However,the relatively low maximum BNPL credit currently on offer means that any defaults that do occur are unlikely to be catastrophic.There is a big difference between maxing out 100,000 rupees(roughly US$1,348),the current limit,and 10 or 20 times that amount(possible with a c

22、redit card).Many emerging Southeast Asian markets also have a large proportion of gig economy or freelance workers,a consumer segment that BNPL is well-positioned to serve.These consumers,usually in the age range of 25 to 35,value payment flexibility and improved cash flow.Providing more convenient

23、credit access to this community through BNPL,while maintaining reasonable credit limits seems like an attractive proposition for financial inclusion and encouraging growth of the digital economy both are goals that are highly desirable for regulators in emerging Southeast Asian markets.42022 Asia Pa

24、cific Fintech TrendsA curious case in developed marketsWhen BNPL firms in advanced economies say they are promoting financial inclusion,it has to be taken with a grain of salt.It could just as easily be said that they are promoting unregulated credit products in markets where well-regulated(and thus

25、 safer for consumers)alternatives exist.Regulators are apt to notice that BNPLs are acting like credit cards and could be risky if not bound by the same constraints.For instance,BNPL platforms in Australia currently still enjoy a regulatory loophole in that they do not charge interest and thus do no

26、t have to follow the countrys credit or responsible lending laws.A similar gray area exists in Taiwans regulations which forbid e-payment companies from providing loans,but naturally,no e-payment platform in Taiwan will describe BNPL services as such.If the number of delinquent borrowers continues t

27、o rise,however,it is hard to imagine regulators will not feel compelled to address the problem.A potential outlier in this group of developed markets would be Japan,where deeply rooted mistrust of debt stems from cultural issues as well as rampant debt problems during the financial crisis.BNPL certa

28、inly appears to be heating up in Japan with PayPals recent acquisition of Paidy,but given the culturally conservative attitude towards debt,there is less pressure for regulators to take action.Traditional banks entering BNPLA more recent development is that of banks entering BNPL either through part

29、nership with a BNPL provider or launching their own pay-later products.Traveloka,which pioneered the PayLater product in Indonesia,partnered with Bank Negara Indonesia(BNI)to launch a PayLater Virtual Card Number which functions similar to a credit card.On the other hand,UOB Indonesia launched an eC

30、ommerce BNPL service“TMRW Pay”through partnership with local eCommerce platform Bhinneka.As the BNPL market continues to grow,we believe partnerships between fintechs,traditional banks and other financial institutions will become more common.Such collaborations would potentially also give regulators

31、 less anxiety over BNPLs,noting that the more stringent KYC,monitoring and reporting processes at traditional banks may help to uncover any hidden debt issues before they run out of control.Perhaps this is also what BNPL providers need a boost of credibility from reputable,established financial inst

32、itutions to demonstrate to regulators that BNPL providers are willing to adopt a responsible approach to lending and ultimately become a force for good.52022 Asia Pacific Fintech TrendsGreen Fintechs-the next big disruptor in the green finance landscape?While there will be increased focus on climate

33、 change there will be little in the way of real traction in terms of moving towards a green economy in 2022.Green finance,defined here as any structured financial activity that has been created to ensure a better environmental outcome,has had an increasingly important role to play throughout the las

34、t decade.As of 2019,the market value of green finance stood at US$30.7 trillion,and its growth is expected to accelerate in the coming years.While different stakeholders are still debating the impact and seriousness of climate change and global warming,investors and financial institutions,especially

35、 in Asia,seem to be very keen on investing in green assets.Asia-Pacifics race to become the global leader in green financeThough green finance comprises different asset classes,the most predominant is the green bonds market where the money raised from investors is ostensibly used exclusively to fina

36、nce projects that have a positive environmental impact which is dominated by Europe,followed by APAC and North America(see Figure 1).Within APAC,while many jurisdictions are actively striving to shift from brown to green investments,China has emerged as a forerunnernot only in Asia but even globally

37、.China is the second-largest green bonds market with a value of US$151.5bn(second only to the US at US$261.3bn).Other large markets in APAC include Japan(US$31.6bn),Australia(US$16.8bn),and India(US$16.5bn).Green finances long road to successDespite increased attention and billions of dollars invest

38、ed in green finance over the last decade,a few hurdles hinder investors from reaping its full benefits.Today,most green financial capital is concentrated in the form of green bonds,with only meager amounts allocated to green loans and other forms of green investments.Even within green bond investmen

39、ts,85%is directed towards three main sectors:Energy,Buildings,and Transport.The lack of diversification within the green finance market sends two important signals.Firstly,the market is still in its infancy,with capital being concentrated in a few asset classes and industries.Secondly,investors are

40、still skeptical about investing in green financial assets,due to the high risk involved around accountability and the lack of consensus on what constitutes green finance and what does not.This lack of consensus has led to the issue of greenwashing,i.e.,some investors/companies falsely marketing a fi

41、nancial product as green when it is not.A report by InfluenceMap found that many green 05010015020025030035020172018201920202021 H1Green bonds market value by region,US$bnAfricaAsia-PacificEuropeLatin AmericaNorth AmericaSupranational62022 Asia Pacific Fintech Trendsinvestment funds do not live up t

42、o the standards of the Paris agreement and the fear of such is impeding the growth of sustainable investments.Green fintech:The invisible hand pushing the growth of green finance The funding gap in green finance is in the trillions of dollars today.With some of the biggest banks and financial instit

43、utions still struggling to mobilize green financial flows,it would be futile for green fintechs to try and get directly involved in the mobilization of capital.Thus,to truly reap the benefits of green finance,we believe that these new digital entrants must go beyond the traditional such as green loa

44、ns and green investments and look towards increasing accountability to solve the greenwashing problems that exist today.With RegTechs and SupTechs gaining increased popularity and relevance,we expect fintechs to leverage their technologies to monitor and supervise the greenness of investments by ban

45、ks,investment houses and even governments over the coming years.For instance,Deutsche Bank has set up an ESG Centre of Excellence in Singapore,which will research how fintechs can be leveraged to address gaps in the ESG market,“including impact monitoring,data management and payments to unbanked com

46、munities.”Why is it relevant in 2022?The recent Glasgow climate conference,also known as the COP26 conference,has drawn attention to the climate change crisis and calls for urgent action from different stakeholders from governments to businesses.Having failed on their promise at the 2009 Copenhagen

47、climate talks of delivering US$100 billion a year by 2020 in climate finance for developing countries,nations reaffirmed their duty at COP26 to fulfill the pledge.With the increased focus on climate finance,the next year might see an increase in green finance investments across the world,especially

48、in Asia.We expect green fintechs in the region to exploit this trend,and partner with governments,banks and other financial institutions to solve some of the challenges hindering green finance today.The importance authorities place in green fintechs role in helping to deliver greater green financial

49、 growth for the region was recently highlighted by the Monetary Authority of Singapore whose fintech challenge and main theme for 2021 was“Sustainable Solutions”from increasing access to green capital to enhancing the monitoring of sustainability commitments.The winning fintechs have now been tasked

50、 to implement their proposed solutions.72022 Asia Pacific Fintech TrendsThe Rise(and Fall)of Asias Digital BanksThe Asia digital bank story is shifting as companies move on from the excitement of their launch and need to build.Product differentiation will be challenging and we will see at least one

51、HK player throw in the towel and one applicant in Singapore will either pull out or change their value proposition.Without question,one of the most captivating trends in Asias financial industry over the past few years has been the rise of digital banking.From Australia to Korea,the region has seen

52、rapid growth of digital-first,or indeed digital-only,banking value propositions.Each Asia Pacific country has taken its own approach to supporting digital banks growth.Jurisdictions including Hong Kong,Malaysia,and Singapore have laid out purpose-driven regulations to support the licensing and launc

53、h of digital banks.Others,such as Australia,have been less prescriptive in their regulatory approach but no less permissive.Indeed,Australia has the longest digital banking history across the region,save for perhaps China.The prospect of digital banks to drive innovation and address the issue of fin

54、ancial inclusion is appealing.The argument goes that financial centers typically have three to five banks that control 80-90%of retail deposits.A digital-first offering could provide a much needed jolt of competition as new entrants leverage data and technology agility to create differentiated value

55、 propositions.On the financial inclusion side,the ability to quickly and rapidly understand a customers profile and proffer financial solutions can make providing financial services to the underserved much more cost-effective.Kapronasias research shows that evaluating and decisioning a loan at a tra

56、ditional bank in China averages US$250 in cost and takes on average 45 days.The same loan application review through a digital bank costs less than a dollar and is completed in minutes.This digital agility seems to be working in China.WeBank and Mybank are some of the poster-digital banks.Despite ha

57、ving some initial challenges around traction,both have become some of the most prominent digital banks globally and have provided billions of dollars worth of products and services to retail and commercial customers across China.Results in other jurisdictions have been mixed,particularly in Australi

58、a.Xinja bank shut down in December 2020 after failing to raise capital.86,400 sold to NAB to be rolled into the traditional banks digital banking platform.Others have pivoted to provide other non-banking financial products and services.Given that Australia was further along than many of the other ju

59、risdictions,the Australian market dynamics could be a harbinger of what we may see in other markets.Although the VC market is still awash in funding,there will be a point in 2022 when investors want profitability.Competition from pure-play challengers like Wise or Nium further threatens the sustaina

60、bility of Asias digital players.Alipay and WeChat Pay drew much of their initial success from their footprints in e-commerce and entertainment,respectively.We have yet to see a truly successful(i.e.,scaled,profitable,growing)pure-play digital bank.Or more succinctly,one that just started with a digi

61、tal banking value proposition rather than relying on another product or service,like social,to scale.Further,we have yet to see what the elephant in the room,Whatsapp,will manage.In places such as India,Whatsapp has proven indispensable for many e-commerce merchants.As WeChat has proven time and tim

62、e again,chat is very sticky.If Whatsapp can sort out its payments and then banking licensing,it will be a formidable player in this space.82022 Asia Pacific Fintech TrendsWhat this means for yet to launch digital banks,most notably Singapores GrabTel and Sea Group,remains to be seen.While Singapores

63、 new entrants will likely be given a bit of a grace period to find their feet,investors in both,now publicly listed,companies will want to see results quickly as launching a digital bank is an expensive undertaking.One advantage is Singapores strict financial industry regulations around banking and

64、payments that should at least insulate the new entrants somewhat from direct competition-especially as both firms are seen as home-grown heros.We have already seen many non-licensed payments and crypto players,which were hitherto operating under an exemption,shutter their Singapore operations.Ultima

65、tely,2022 will be the year that the shine comes off of the digital banking propositions.Through a combination of traditional banks upping their game,VCs running out of patience,and pure-play digital players struggling to find a business model that works,Asias digital bank landscape will start to res

66、emble Australias,insofar that we will see players fail,be acquired,or pivot to address other markets.The digital banks that survive will be those that can cater to very specific,perhaps more under served niches such as Australias Judo bank,which has made an impressive dent in the SME banking market

67、or Australias Volt that has augmented its pure-play digital banking value proposition with open banking and Banking-as-a-Service offerings.92022 Asia Pacific Fintech TrendsEmbedded payments and evolving channelsIn 2022,payments will continue to disappear into transactions as they become commoditized

68、 components in third-party ecosystems and value-chains.Moreover,embedded payment value-chains will continue to evolve in 2022 along with the introduction of 5G and IoT.An automatic,seamless serviceAt a basic level,embedded payments are an automatic and seamless service that integrates payments funct

69、ionality into any transaction scenario,rather than having to open a separate platform to complete the payment or explicitly authorize the payment.An embedded payment is typically completed without the user even realizing the payment has been done.Embedded payments are used in both B2B and B2C contex

70、ts.E-commerce,social platforms,ride hailing services and streaming services are where embedded payments are more widely used.The end goal is typically a better customer experience and transaction completion rates the thinking being that if you make it easier to make a payment,more people will make t

71、hem,and consequently,stay loyal to the platform.The most well-cited example of embedded payments is ride-hailing where you click once or twice to book a ride,but when the ride is finished,no other interaction is necessary,and the payment is automatically processed.An example in retail e-commerce is

72、Amazons patented 1-Click checkout,which is nearly as seamless as it gets.In theory,embedded payments should create a win-win for all the participants along the value chain.As everything happens in one place,service providers can analyze clients needs and upgrade their offerings according to a custom

73、ers personal preference,which can lead to better user experience based on a more personalized engagement,whether it be with a customer or a business.Options.Its really all about options For a company to integrate payments into their platform,they can choose to work with a gateway,for example a third

74、-party PSP like Stripe or a bank for processing transactions.Typically these are API-level connections and the company will likely share transaction level data and revenue,and will also rely on the PSP for the complete payment experience.For some platforms this may be acceptable,but increasingly we

75、are seeing companies applying for payment licenses and becoming a payment facilitator(payfac)themselves.While being a facilitator requires a significant up-front investment for the licensing and gateway setup,it enables full control over platform design and interface presentation.This checkout exper

76、ience is becoming a critical tool for attracting and keeping customers.The ultimate goal is to have these payments as near native as they can get.Every extraneous click,or even worse,an app switch,will lower conversion rates.Moreis typically better Embedded payments,by themselves,already present a t

77、remendous opportunity,whether it be for B2B or B2C transfer,cross-border payment,dynamic currency exchange and even cryptocurrency.However,the real opportunity is to be able to layer additional financial products and services on top of payments.As Chinas tech-giants have shown,once you have captured

78、 payments,there is a tremendous opportunity to move up the value stack into the higher margin businesses of lending,insurance,investment,and banking.According to LightYear Capital,a venture fund,embedded finance will be worth US$230 billion in 2025,up from only US$22 billion in 2020,largely driven b

79、y needs identified and developed in payment behavior,and in response to different industry situations,various business operational models and personal requirements.102022 Asia Pacific Fintech TrendsThe real value in any payment transaction comes from the data.As data is collected across the entire p

80、ayment process when it happens,what goods are bought,how much is paid,whom they are sent to you all of a sudden have a fairly clear picture of not only the consumer and merchant,but also the upstream and downstream providers.By analyzing this data,service providers can provide incredibly personalize

81、d products and solutions.What to expect in 2022Embedded payments will undoubtablely grow in 2022 especially as internet of things(IoT),5G,and smart-devices take center stage in Asia.According to IoT Analytics,globally,there were over 11.7 billion IoT connections(smart wearables,home devices,equipmen

82、t)and 9.9 billion non-IoT connections(phones,computers)in 2020.The challenge for embedded payments in 2022,will be regulations.Although it should be clear that a payment is being made,the seamlessness of these payments often makes it difficult to know that a payment has been completed.For some users

83、,this may lead to unintended payments.Data privacy will also be a critical part of the 2022 regulatory discussion.Although few countries outside of China and Australia have pushed data privacy laws,it is inevitable that in 2022 we will see more focus on data privacy and what companies are allowed to

84、 do with all of that data.The Future For many years,the financial industry has discussed the concept of embedded finance in many forms.2022 may be the year that we no longer talk about embedded payments as they will be ubiquitous and part of nearly every consumption scenario.With the rapid adoption

85、of digital payments during the pandemic and increased sophistication of e-commerce and retail platforms,embedded finance,and more specifically embedded payments,is clearly the future.With the growth of smart-devices,this looks set to only continue.112022 Asia Pacific Fintech TrendsCross-border real-

86、time payment linkagesReal-time cross-border linkages,especially in Asia,will be the key story in cross-border payments in 2022.Increased adoption of cross-border payments and remittances,especially as Asia opens up,will be rapid and will start to capture share from traditional players(SWIFT,Wise,Vis

87、a).The cross border payments journey Cross-border trade is beneficial for the global economy as it allows countries to consume outside of their production possibility frontier.International payments have facilitated cross-border trade and investments and have been influential in shaping the payments

88、 landscape today.Banks and their respective correspondent banking networks typically facilitate these payments;however,these transactions are hindered by high costs,lack of transparency,long settlement cycles and cumbersome processes.This has led to the emergence of new entrants such as Wise,Ripple

89、Labs,Rapyd,Banking Circle,dLocal,and Payoneer that have aimed to mitigate some of these challenges.Governments too are seeking to reduce the challenges of cross-border payment flows.In particular,within ASEAN,in what was the first of its kind,the Monetary Authority of Singapore(MAS)and the Bank of T

90、hailand(BOT)collaborated to link both countries real-time funds transfer services(PayNow and PromptPay respectively)with the service launched in April 2021 part of a larger initiative under ASEAN Payment Connectivity that closely aligns with efforts by the G20,Financial Stability Board,and other int

91、ernational standard-setting bodies to facilitate faster,cheaper,more inclusive and more transparent cross-border payment arrangements.A slew of cross-border linkage announcements between countries within SEA have since followed involving Singapore,India,Philippines,Thailand to name a few.With the gr

92、owth of e-commerce and advancements in technology certain to increase cross-border payment flows,we explore what the landscape could look like in 2022.Real-time payments connectivity to continue across SEA SEA as a region will continue to build connectivity between countries payment networks driven

93、by the success of initial projects such as the one between MAS and BOT.Singapore,for example,plans to link its real-time payments system with equivalents in Malaysia,Philippines,and India.Thailand,for its part has announced similar initiatives with Malaysia,Indonesia,Philippines and Cambodia.Outside

94、 of ASEAN,there are plans for a connection with Europe.The drive to link payment networks has been particularly rapid in ASEAN due to the regions increasingly digitally literate population.In the 2019 Citi and Imperial Colleges Digital Money Index,which tracks digital money readiness of 84 countries

95、,122022 Asia Pacific Fintech Trendsfive out of the six ASEAN countries included in the index moved up the rankings over a period of five years.A driving force has been Southeast Asias Internet economy,which has more than tripled in size over the last four years.Scaling to newer heightsWhile these cr

96、oss-border linkages serve to alleviate many of the pain points individuals and entities face while making international payments and transfers,they currently come with certain limitations such as low daily transfer thresholds,only peer-to-peer(C2C)transactions and high currency conversion rates.If t

97、hese linkages are going to scale and obtain critical mass,there needs to be consideration to extend services to B2B payments,provide more competitive FX rates and increase daily limits.Considering that cross-border transactions will remain concentrated within the B2B segment,we see a future for trad

98、itional player collaboration with fintechs that can provide B2B payments,larger transaction amounts and better currency conversion rates.With such collaboration,it seems that legacy players such as SWIFT will be massively disrupted.Crypto,CBDCs and stablecoinsCryptocurrencies were all the rage for t

99、he large part of 2021.These range from mainstay cryptos like Bitcoin and Ethereum to other less well known ones such as Dogecoin and Shiba-Inu,whose prices can either skyrocket or plunge with a single Elon Musk tweet.Depending on who you talk to,these cryptocurrencies either promise to spearhead the

100、 future of decentralized banking or set off the next major market collapse.In the former scenario,they act as a medium to allow for instantaneous transfer of value,for example between exchanges and digital wallets,with the underlying intention to provide an alternative payment system that is decentr

101、alized.These alternative mediums of exchange and platforms that underly them(blockchains)although still in their infancy,have the potential to disrupt legacy players like SWIFT.That being said,it is too early to confidently forecast the trajectory and endgame for CBDCs and stablecoins,given the mult

102、itude of unresolved design factors still in play.However,the time for disruption is ripe.Increased linkages mean increased risksUniformity of standards is an essential prerequisite in global transaction banking and is part of the core mission of organizations like CLS and SWIFT.However,as the nature

103、 of global interoperability evolves and connections between countries become more complicated,differences will arise,driven by diverging customer requirements,convoluted trade rules and a multitude of technology platforms.As more jurisdictions connect payment networks,there needs to be a way to stan

104、dardize the management of compliance.As a survey by the Financial Task Force(FATF)indicates,inconsistent national approaches create impediments for entities to carry out customer identification related tasks thus implying a greater risk of money laundering activity.We see regulatory challenges in th

105、is more integrated environment both at the organizational and institutional level.In between,we foresee an uptick of money laundering activity and related crimes.ConclusionThe aims of cross-border linkages are to facilitate remittances between countries considering corporates alone move nearly US$23

106、.5 trillion annually across borders,alleviate existing cross-border payment challenges,and drive financial inclusion.As the worlds population becomes increasingly digitized and connected making it easier to make these transactions,traditional methods of cross-border money transfer will no longer hav

107、e a stranglehold.Improvements in technology are also creating possibilities.Thus,while it is important to map out what the future may look like,it is also equally important to keep in mind the exponential rate of change.Incumbents like SWIFT,Visa,Mastercard and others should take note.132022 Asia Pa

108、cific Fintech TrendsRegulators in Asia turn the spotlight on digital assetsThe US and Europe will fall behind as Asia takes the lead in digital assets and crypto,but it wont be as fast as expected as regulators like Singapores MAS tap the brakes on crypto development.Cryptocurrencies,Decentralized F

109、inance(DeFi),and Web 3.0 exploded in 2021.Total crypto market capitalization nearly quadrupled in the year,peaking near USD$2.95 trillion,while DeFi erupted from a“mere”USD$21 billion in Total Value Locked to a peak of nearly USD$276 billion over the same period.,Host to many disruptive technologies

110、 still in their infancies,these markets have matured such that traditional financial institutions,and regulators,must now engage.Long an attractive hotspot for global crypto and DeFi teams,we look for Asia to take the lead in developing regulatory frameworks as more financial institutions jump into

111、the space,seeking guidance.Opportunities will develop as countries roll out governance frameworks based on local attitudes,creating headwinds and tailwinds for growth.Below we expand our forecast for digital asset and DeFi regulation across Asia in 2022,ranking countries as“Progressive/Open”,“Middle

112、 Ground”,and“Strict/Hostile.”ProgressiveSingaporeWith an innovation-friendly bespoke regulatory framework,Singapore is arguably the top jurisdiction in Asia for cryptocurrency businesses.Excitement was high throughout most of 2021 as Singapores regulatory regime opened applications for the novel“Dig

113、ital Payment Token Services”licensing by the Monetary Authority of Singapore(MAS).The euphoria tempered by December as only 4 out of the 176 applicants that applied had been officially granted a license.Disappointing perhaps,but its Singapores“quality over quantity”approach that will support the ind

114、ustry long term.Under the guidance of MAS,and with an explicit goal of growth,Singapores position as a crypto hub will improve in 2022,and the country will continue to attract top-tier talent,investors and business.JapanJapan should continue to be among the most progressive Asian nations in cryptocu

115、rrency regulation in 2022,but we expect updates as they look to address DeFi and NFTs.In 2021,Japans Financial Services Agency(FSA)made serious efforts to address the regulatory implications around emerging technologies,launching a study group to craft policy recommendations.An April 2021 report fro

116、m the Bank of Japans Payment and Settlement Systems Department assessed the applications of DeFi,142022 Asia Pacific Fintech Trendsforeseeing benefits from increased competition and accessibility,yet also raising concerns over a lack of user protection.Expect Japan to unveil DeFi regulation in 2022

117、with a focus on user protection and Anti-money Laundering and Counter-terrorism Financing(AML/CTF),while continuing to be a progressive supporter of innovation.IndonesiaBucketing Indonesia under the“progressive”umbrella may surprise some,but the regulatory picture is friendly enough that major crypt

118、o exchange Binance decided to make the country their home at the end of 2021.Indonesia has explicitly legalized crypto trading and ownership,viewing the market akin to commodities.Short of new(and supportive)regulations,this is generally the next best set up for crypto businesses.The future looks br

119、ight as Indonesian regulators have expressed intentions to be accommodating to the crypto industry and are assessing how to craft new and supportive regulations.2022 should be a solid bellwether for cryptos future in Indonesia with the Binance move and any new regulation and/or government backed blo

120、ckchain projects.Middle GroundTaiwanDespite being thought of as a hotspot for crypto and DeFi since 2018,Taiwans conservatism in finance still holds true.Initial popularity was driven by a lack of regulation,rather than proactive support,and that period is coming to a close.Basic initial coin offeri

121、ng(ICO)and security token offering(STO)regulatory frameworks stood as the solitary frameworks since 2018,until AML requirements were added in 2021.Taiwans Ministry of Economic Affairs(MOEA)recently changed cryptos legal classification from software design services to virtual currency platforms and t

122、rading businesses,falling under the jurisdiction of the Financial Services Commission(FSC).Moving forward into 2022,it will be FSCs responsibility to craft a new regulatory framework and we expect more stringent rules for crypto to be forthcoming.Hong KongHistorically known as both a traditional and

123、 crypto financial hub,original home of major exchanges such as BitMEX and FTX,the regulatory picture has changed in the last year.Like Taiwan,Hong Kong had largely avoided direct regulation of the digital asset space but is now considering new regulation that would make licensing compulsory for all

124、exchanges.Also under consideration are restrictions on retail trading,limiting exchanges to accredited investors.The uncertainty created by these as yet undetermined regulations has hurt crypto businesses in Hong Kong.In 2022,expect Hong Kong to continue to lose crypto businesses to more flexible ju

125、risdictions with clearly defined digital asset frameworks.Strict/HostileChinaWhile Chinas crypto regulations have always made headlines,the crackdown on mining and statements made by the PBOC in 2021 were decidedly more substantive than in the past.Bitcoin mining came to an abrupt end last spring,wi

126、th the Central Bank declaring all cryptocurrency transactions illegal a few months later.Since then,all major exchanges have shut down their Chinese operations,OTC desks,and have banned Chinese nationals from their platforms.While the future looks grim for crypto and DeFI in the country,China has se

127、eded some hints to the contrary.The PBOCs digital currency research institute filed a patent for a crypto-trading system and the city of Shanghai has officially backed a blockchain and DeFi project.Ultimately,China is not anti-blockchain it just wants to execute on its own terms.Although 152022 Asia

128、 Pacific Fintech Trendsspeculative,some believe the current crackdown is temporary as China looks for an acceptable utilization of blockchain,and perhaps an integration of e-CNY.South KoreaSouth Korea underwent serious regulatory tightening in 2021 that lands it decidedly in our“Strict”category.All

129、virtual asset management providers,including exchanges,are required to register with the Korea Financial Intelligence Unit and to partner with banks to ensure accounts are held by real people.Only four exchanges Upbit,Bithumb,Coinone,and Korbit out of over 60 were able to secure the necessary partne

130、rships.All other exchanges must close,or at a minimum cease offering fiat services.Further,Seoul is looking to impose a 20%capital gains tax on investors digital asset transactions in 2022.Looking ahead,guided by the actions of 2021 and statements from Koreas Financial Intelligence Unit,we can only

131、expect an increasingly strict regulatory picture in South Korea.IndiaIndia boasts a highly developed crypto market and the largest userbase in the world at over 100 million users yet was threatening in 2021 to issue a blanket ban on cryptocurrency and related businesses.While the ban technically fel

132、l through,the framework that did emerge is not crypto friendly.The upside for the industry rests on the potential for liberal interpretations of allowable exceptions to promote the underlying technology of cryptocurrency and its uses.ConclusionPre-Covid,Asia generally,and Singapore/Hong Kong specifi

133、cally,benefited from a brain drain of crypto businesses leaving the West.Pending the re-opening of international travel,we anticipate this trend to resume and accelerate but no longer can Asia be viewed seductively as the wild west of the digital asset market.Benefiting from highly developed and div

134、erse country-specific regulatory frameworks,Asia has built substantial regulatory clarity,something severely lacking in the US.162022 Asia Pacific Fintech TrendsThe Platformification of APAC BankingIncumbents across APAC will be under increased pressure to adopt a platform strategy and must categori

135、ze themselves according to how they want to compete and collaborate in the marketplace.Drivers behind platformificationThis year will see further pressure on incumbent banks across developed APAC to adopt a“platformification”model,defined here as“a plug-and-play business model that allows multiple p

136、articipants(producers and consumers)to connect to it,interact with each other,and create and exchange value.”There are a number of drivers behind the trend.Banks in the region are facing fierce competition from new digital-first players with innovative products and services,fickle customers demandin

137、g seamless,friction-free,personalized services,and Covid,which led to a wave of branch closures.Incumbents,in a low interest world,struggling with legacy systems,and the need to cut costs are under pressure to come up with their own suite of digital products and services or risk losing market share

138、and erosion of profitability.The traditional integrated banking model,based on operational scale and a broad deployment of one-size-fits-all products developed in-house is fading fast.The name of the game now is agility and personalization how to respond quickly to changing expectations and evolve o

139、fferings to continue to make them relevant?To do that effectively banks have realized that they cannot do this alone.They are going to have to work with partners and belong to ecosystems to effectively serve that segment of one.Options for banksBaaSIncumbents have two main options for working with p

140、artners.One is to adopt a Banking-as-a-Service(BaaS)model,where a bank leases its infrastructure over the internet,on-demand to fintechs,challenger banks and other third parties.These connect with the banks systems directly via Application Programming Interfaces(APIs)and build banking offerings on t

141、op of the incumbents regulated infrastructure.Services can also be embedded in non-financial players applications and will form part of the end-to-end customer journey consisting of a composition of modules built by others.Example use cases for BaaS might include digital banks or super apps wanting

142、to build out a suite of financial products,a fintech wanting to offer wallet-to-wallet payments,a ride hailing company or an ecommerce marketplace needing a payments component to complete the user journey,or accounting software offering payroll services.For banks,the benefits of becoming an infrastr

143、ucture bank(distributor)and pursuing a BaaS model are that it enables:diversification into new business verticals and products;access to a larger customer base via partners;reduced cost of distribution of their core 172022 Asia Pacific Fintech Trendsproducts and services;and access to new revenue po

144、ols and monetization opportunities.The downside is that banks risk becoming just“dumb pipes”and losing control over the customer relationship.BaaPThe alternative is for incumbents is to adopt a Banking-as-a-Product(BaaP)model.Here banks effectively have two options.They can either become a marketpla

145、ce bank(aggregator),curating a selection of specialized third-party providers and integrating them with their core systems.This could be to expand their product suite and/or to host non-financial marketplaces such as for autos or property,whereby the bank then has its products embedded to complete t

146、he customer journey.The benefits of the aggregator option are that the bank maintains control over the customer interface and the branding.As an example,in 2018,DBS launched Southeast Asias largest bank-led property marketplace,DBS Property Marketplace,following the banks successes in car and electr

147、icity marketplaces.The alternative is to become a platform bank(orchestrator),allowing third parties(e.g.,competitors,developer communities)to connect,develop and assume control of customer interfaces,interact and exchange value on the platform.A downside of this option is the bank loses control ove

148、r the customer and the branding and risks having its own products and services cannibalized by its competitors.What banks need to do today and tomorrowThe banking industry is at inflection point.Facing significant challenges from a competitive perspective in terms of new players,legacy infrastructur

149、e,changing customer demand,and squeezed margins,to survive APACs banks must decide what they want to be.Do they want to be an infrastructure bank where they license their banking license to other providers?Do they want to be a marketplace bank where they have their own platform and experience but br

150、oker or aggregate products and services from other banks and third parties?Or do they want to be a platform bank?APACs incumbents are going to be under increasing pressure in 2022 to choose a strategy and a vision of how they want to execute it.They will then need to decide from an IT perspective ho

151、w they want to have their business layer,their data layer,and their infrastructure layer that are consistent with that vision and strategy that they have set.Once committed,this is not something that incumbents can review on an annual basis.It is a long-term commitment involving long-term decisions

152、over the next three to five years.APAC banks are going to have to stay the course.182022 Asia Pacific Fintech TrendseCommerce marketplaces building inhouse payment armsAs e-commerce platform offerings become commoditized,platforms without a payment strategy will lose share as a native payments exper

153、ience draw users to a more user-friendly experience on platforms with embedded payments.Growth in eCommerce is well underway in Asia,driven in large part by the pandemic as well as greater digitalization of local economies.Under these circumstances,eCommerce marketplaces have started to take a deepe

154、r look at opportunities to promote a closely related product payments.Lazada,an eCommerce arm of the Alibaba Group in Southeast Asia,made headlines last year when it created a new role for head of payments and tapped a former Alipay executive for the position.Kapronasias conversations with eCommerce

155、 industry experts have also revealed greater enthusiasm among eCommerce marketplaces for developing inhouse payment processing capabilities and launching payment products such as digital wallets.Moreover,this move by Lazada is likely also a response to Shopees increasing dominance in the region and

156、growing user adoption of Shopee Pay.But this naturally begs the question,what is attracting eCommerce players to enter the payment industry?Whats attracting eCommerce marketplaces to payments?Most major eCommerce marketplaces state on their website that merchants are charged a flat fee per transacti

157、on of 2.0%applied on the price of the item.But this does not reflect the reality of the situation.From our research,we have seen that on average the actual transaction fee is usually negotiated much lower to around 1.0%,or even 0.5%for the largest merchants.This stems from the fact that large mercha

158、nts on eCommerce marketplaces that are able to command significant sales volumes use their bargaining power to drive down transaction fees.The threat of marquee merchants taking their business to other marketplaces is usually more than enough to persuade marketplaces to greatly lower their transacti

159、on fees.In return,the merchant may offer certain products exclusively on the marketplace or provide discounts that attract more consumers.This dynamic of a“race to zero”for eCommerce payment transaction fees is in many ways a reflection of the payment industry in general as the merchant discount rat

160、e or MDR along with card scheme interchange fees are being driven down by increased competition and government intervention in certain jurisdictions.So,if payments do not provide a compelling revenue generating opportunity,what could be the strategic rationale for eCommerce marketplaces such as Laza

161、da?We believe the motivation for entering payments can be attributed to three benefits of an inhouse payment solution which in the long run,will justify the initial investment.These benefits are as follows:having a closed loop payment system that reduces costs and anti-money laundernig(AML)risks,imp

162、roved ability to adapt to local payment methods and the potential to build an ecosystem of products and services akin to a super-app.Closed-loop digital wallet helps manage costs and reduce security risks A closed-loop digital wallet,such as Shopee Pay,functions such that all transfer of funds happe

163、ns within the eCommerce marketplaces payment system.Wallet transactions thus eliminate the need for an external payment service provider which would typically be required to facilitate payment processing and settlement with merchants.Furthermore,since all transactions,including refunds,happen within

164、 a closed system(walled garden),the risk of violating AML policies is drastically reduced.Refunds are 192022 Asia Pacific Fintech Trendssimply transferred back to the customers wallet that was used for the initial purchase,rather than to an external bank account.Thus,over the long run,a closed-loop

165、payment setup helps the eCommerce marketplace reduce costs related to third-party payment processors and improve AML compliance while reducing security risks that may arise when transferring funds in an open-loop system.Adapting to local payment methodsHaving an inhouse payment solution also provide

166、s the eCommerce marketplace with greater flexibility in adapting to the local payment methods of each market.This is especially relevant in the case of Southeast Asia,as card penetration is very low in many markets and the preferred payment methods apart from cash are digital wallets and online bank

167、ing.With payments managed inhouse,the marketplace will be in a better position to decide which local payment methods it wants to accept and approach the relevant gateways or wallet providers to integrate with them.Overall,this will give the marketplace greater control and increased speed-to-market w

168、hen it comes to launching in a new country with unique local payment methods.Building an ecosystem of products and servicesFollowing a similar script to that of Alipay or Grab Pay,it is likely that underlying the entry into payments is the ambition of these eCommerce marketplaces to eventually becom

169、e an ecosystem of services that are deeply interwoven with the consumers everyday life in other words,a super-app.Having access to consumers payment data through inhouse payment processing enables the eCommerce marketplace to build new features and products on top of it,such as insurance,credit prod

170、ucts(eg.buy-now-pay-later),and wealth management.To further expand their reach,eCommerce players such as Shopee have started to venture into the offline space by enabling their digital wallet to be accepted at brick-and-mortar merchants.Consumers receive rewards and loyalty points for each transacti

171、on and are incentivized to keep shopping and spending within the ecosystem.Is it too late for eCommerce marketplaces that were slow to enter payments or have yet to do so?Compared to more developed APAC markets such as Japan or Korea,eCommerce is still a relatively nascent phenomenon in Southeast As

172、ia and has only started to gain traction over the last one to two years.As consumers become more accustomed to the concept of shopping and paying for items online,we expect to see an even greater spike in eCommerce transaction volumes in the coming years.It stands to reason that this is an opportune

173、 time for eCommerce marketplaces to double down on building inhouse payment capabilities.No doubt,this is a goal that is more suited for eCommerce players with the necessary funding and resources as it is no easy feat to bring payments operations inhouse.Yet,as shopping online rapidly becomes the ne

174、w normal in Southeast Asia,and consumers look for convenient and reliable payment methods,having greater control over payments no longer seems like just an interesting opportunity for eCommerce marketplaces.Rather,inhouse payment capability has,in many cases,become imperative for eCommerce marketpla

175、ces to maintain their strategic position in an increasingly competitive market.202022 Asia Pacific Fintech TrendsCentral Bank Digital CurrenciesChinas e-CNY will have a muted launch at the 2022 Winter Olympics and user adoption will remain a challenge.Other countries will continue to navel gaze,but

176、not much progress will be made.M-bridge will be stymied by politics.About a decade ago,a few years after Satoshi Nakamotos Bitcoin whitepaper was published,the financial industry started teasing apart Bitcoin,the digital asset,from the blockchain technology that supported it.For the next few years,t

177、he industry was in a fervor over the possibility of blockchain technology changing anything and everything from the way that securities firms settled trades to how money moved through the global financial system.If the emergence of blockchain technology prompted the financial industry to fantasize a

178、bout a new future,the emergence of Central Bank Digital Currencies(CBDCs)has provided a similar navel-gazing opportunity for central banks and governments around the world.CBDCs,what are they good for?The motivations for launching a CBDC are varied depending on the government.Some governments are lo

179、oking for better visibility into money flows,which is something that is notoriously difficult with traditional money both digital and even more so for physical.Others are interested in the programmability that a CBDC would allow.For countries like China,the decision to pursue a CBDC seemed very clea

180、r-cut.In a technocratic country with a capital-controlled currency worried about internal fiscal and monetary policy as well as capital inflows and outflows,the decision was not so much if,but when.That is not to say that the decision is at all trivial.In many non digital-first countries,such as per

181、haps the United States,the idea of a wholesale shift to a different form of payment likely would fall into the same bucket as shifting to the metric system.Nevertheless,we believe that if central governments could flip a switch and instantly have the whole country on a CBDC,they would.What governmen

182、t would not want to have full visibility(and control)over their currency?Even in privacy sensitive regions such as the European Union or freedom-sensitive countries like the US.And indeed,the world is going digital.Within ten years,we believe that physical money will be an afterthought for 95%of the

183、 population.Chinas CBDC is clearly a leader in this.Bills or 1s and 0s?China already had a strong lead.Through the Alipay and WeChat Pay platforms,in 2021,nearly 25%of retail payments were digital and nearly all of those went through the two tech giants platforms.For this reason,Chinas transition to

184、 a CBDC should be easier,but in reality,it is anything but.When Alipay and WeChat Pay launched QR code payments,they pushed incredible subsidies and rewards to both consumers and merchants to incentivize usage.As an example,at one point,a consumer in Shanghai could convince their local merchant to s

185、ign-up to accept Alipay and receive up to 300 RMB(US$50)as a reward if the merchant signed-up.Effectively this turned their entire consumer base into a remote sales force.Similarly for merchants themselves,for the first few months of usage,for many of the merchants,the merchant discount rate,or fee

186、charged for accepting payments,was 0%.Incentivizing payments and usage is pretty par for the course and we see this not just in payments,but with robo-advisors and trading platforms,etc.as well.Typically,though,what all these subsidies have in common is that they are backed by a commercial entity wh

187、ich is doing the incentivizing.However,this 212022 Asia Pacific Fintech Trendsof course is not the case for Chinas CBDC as it is the PBOC(the central bank)that is trying to incentivize usage.And usage has been one of the biggest challenges for the e-CNY.As of the end of 2021,nearly US$8 billion had

188、been transacted across the e-CNY platform,which sounds like an impressive number until you consider the fact that Chinas tech giants would have processed about US$80 trillion in payments over the same period.The challenge for the PBOC is how to make using the e-CNY more compelling as a central bank.

189、Although they did provide some rewards for early users and most B2C transactions are currently free,there will need to be fees incorporated.Merchant discount fees incorporate not just the cost of making the payment,which is typically peanuts,but also fraud protection,customer loyalty programs,and al

190、l the other value-added services that acquirers typically provide.The other challenge is usability.Alipay and WeChat Pays dominance is largely down to their usability.The customer experience on both platforms is relatively seamless and pleasant,especially when compared with the typical experience on

191、 a Chinese banks website or app.Even when Chinas first fully digital banks launched,when a consumer was asked why she was not trying out the bank,she responded,“why would I when Alipay does everything I need?”Chinas challenge is further exacerbated by COVID.The Beijing Winter Olympics in February 20

192、22 were meant to be the coming out party for the e-CNY with foreigners,locals,and everyone in-between enjoying contactless e-CNY enabled payments.Now,there will be a few thousand athletes and journalists using the platform within an Olympic COVID bubble,which is far from Beijings original goal.This

193、challenge is not unique to China and will be something that many other countries and regulators around the world will be grappling with.For this reason,many jurisdictions are looking at stablecoins as a more user-friendly alternative to CBDCs.Crossing borders and boundariesThe additional challenge f

194、or the growth of CBDCs in 2022 will be interoperability.Despite a significant amount of cross-border interoperability ink spilled and POCs run,especially by the Bank of International Settlements(BIS),fundamentally the challenge is not the technical aspects of interoperability,but rather the politica

195、l will.Much like the challenges around an ASEAN payments network,where multiple governments need to agree on ownership and settlement currency,we feel that 2022 will not show much progress in the development of interoperability due to these challenges.The FutureSo with all of this in mind,what can w

196、e really expect from CBDCs in 2022?Maybe it is too early to expect the world to adopt them wholeheartedly.With the rapid development and expansion of crypto,we have shifted into an environment where we expect constant and fast innovation.In reality,the promise of CBDCs and stablecoins are there and

197、the benefits for governments,businesses,and consumers are clear,but outside of China,the launch of national CBDCs will be limited.And even in the case of China,the regulators will struggle to drive adoption until the platform is fully integrated into the super-apps.Even then,it is more realistic to

198、see the Chinese government take a stick approach rather than a carrot approach.Without mandating the use of the e-CNY,usage will languish.222022 Asia Pacific Fintech TrendsThe Rise of Infrastructure-as-a-ServiceMoving fully to the cloud is a bad strategy.Instead,FIs in the region should consider ado

199、pting a hybrid solution.What is IaaSCustomer spending on Infrastructure-as-a-Service(IaaS)is projected to increase at a compound annual growth rate of 11.2%until 2024 across Asia-Pacific,becoming the fastest-growing cloud market segment during the next five years.Specifically,China,Japan,India,Austr

200、alia,and South Korea are set to become the five largest IaaS markets within the region,together accounting for more than 80%of the overall market share by 2024.Source:GlobalDataBut what is IaaS and why is it becoming increasingly important?Starting with a definition,IaaS is a form of cloud computing

201、 that provides virtualized computing resources over the internet.IaaS is one of the three main categories of cloud computing services,alongside Software-as-a-Service(SaaS)and Platform-as-a-Service(PaaS).In an IaaS service model,a cloud provider hosts the infrastructure components that are traditiona

202、lly present in an on-premises data center.Drivers in APACIn terms of what is driving IaaS adoption across the region,put simply,financial institutions(FIs)can no longer afford to be in the business of managing their own data centers.Fierce competition from cloud-native new players,customer expectati

203、ons for anywhere,anytime digital services,the rise of open banking,the increasing importance of ecosystems,and tighter regulatory oversight is putting relentless pressure on FIs to become more agile and adapt quickly to their rapidly changing business and operating environment,while at the same time

204、 reduce costs and enhance productivity.Benefits of IaaSIaaS helps to alleviate these pressures by providing flexible,scalable,adaptable infrastructure.First,it offers FIs flexibility when it comes to different test and development environments.These can easily be scaled up or down according to requi

205、rements.Second,IaaS helps FIs to manage data when demand is unpredictable or might steadily increase.Third,it provides the necessary storage resources,servers,and networking for hosting applications.Deployments can be made quickly,and the cloud infrastructure can be easily scaled up or down accordin

206、g to the applications demand.Lastly,IaaS can provide the necessary compute and processing power to comb through big data sets.Put together,IaaS makes it easier for FIs to roll out new innovative services faster and more cost-efficiently and then to scale these up and down according to demand.That th

207、en helps the FI to become more agile by responding quicker to changing customer expectations while at the same time cutting costs and becoming more competitive.Furthermore,the tools available to comb through big data sets also help FIs gain real-time business insights to deliver more personalized se

208、rvices and become more customer centric.Hybrid as an optimal solution?While IaaS offers attractive benefits to FIs,rather than moving infrastructure fully to the cloud,FIs in the region might want to consider adopting a hybrid solution as an alternative that is hosting their infrastructure in both a

209、 third-party data center and the cloud.While cloud offers FIs that 16.3%12.1%11.9%11.8%11.8%11.6%10.9%10.9%10.4%8.7%IndonesiaJapanSouth KoreaSingaporeAustraliaNew ZealandMalaysiaRest of APACChinaIndiaIaaS Market Growth Rate(CAGR)in APAC2019-2024232022 Asia Pacific Fintech Trendssought-after agility

210、and flexibility,being in a heavily regulated industry,FIs must also consider security and compliance.Several jurisdictions across the APAC region have strict data privacy and localization requirements,as well as rigorous uptime stipulations.Indonesia,for example,allows banks to put data in the publi

211、c cloud,but FIs are fully responsible for it.Unfortunately,public cloud is neither dedicated,nor guarantees 100%uptime.A hybrid solution potentially offers the best of both worlds.Customer data can be stored on secure,dedicated bare-metal servers in cloud-adjacent data centers while workloads can be

212、 moved to the cloud to benefit from the agility that cloud provides and to be closer to the FIs customers.These servers rarely,if ever,go down,unlike the cloud,and the regulator knows at all times where the customers data is,ensuring that the FI adheres to regulatory guidelines.Two other benefits of

213、 a hybrid solution are that it provides a medium for FIs to move compute and data from one cloud provider to another and it mitigates against the risk of putting a security solution in the same cloud system that the FI is trying to protect.The futureIf FIs across the region want to fully benefit fro

214、m IaaS by adopting a hybrid infrastructure strategy,data centers will have an important role to play beyond simply providing space,power and cooling.These must become integrators of technical services,being the core in the middle that acts as the first(physical)layer of an FIs stack enabling multipl

215、e cloud connections.In order to do that effectively,data centers for their part must step up.The key question going into 2022 and beyond will be how will data centers modularize themselves,not just from a physical premise perspective,but also from a contractual and a consumption premise,in order to

216、meet FIs demands to have that flexibility to scale up and down.In short,the call to action is for data centers themselves to achieve that same principle of agility that FIs are also looking for from IaaS.242022 Asia Pacific Fintech TrendsKapronasia is a leading provider of market research covering f

217、intech,banking,payments,and capital markets.From our offices and representation in Shanghai,Hong Kong,Taipei,Seoul,and Singapore,we provide clients across the region the insight they need to understand and take advantage of their highest-value opportunities in Asia and help them to achieve and sustain a competitive advantage in the market.Please visit https:/ 2022 Kapronasia Singapore Pte.Ltd.All rights