Crytocurrencies are here. Right now, the world is raging over the rise of different technologies in the financial sector that were unimaginable 10 years ago.
Many experts even predict that the banking business will soon be overtaken by all these technologies.
While the traditional financial industries are being shaken and disrupted by the rising changes in the sector, a big number of the global population remains left behind when it comes to access to financial products and services.
According to the Asian Development Bank, less than 27% of adults in Asia possess an account in a formal financial institution. Of all the enterprises or small businesses in Asia on the other hand, only 33% said they have a credit line or an existing loan in a financial institution.
How can we help solve this problem? Fintech startups in Asia come to the resque.
Contrary to the misconception that banks and fintech startups are competitors, we at Sagefintech believe that the key to financial inclusion in Asia is a radical collaboration between the established banking institutions and emerging fintech startups.
Here are some of the main reasons banks and fintech startups in Asia could collaborate:
1. Bolder and faster innovation
The existing systems and checks and balances of established financial institutions are not conducive for innovation.
By collaborating with startups, banks are able to adapt, implement, and offer more innovative financial products and services faster and in a way that could scale rapidly.
The current inefficiencies of the traditional banking system could be augmented by the customer-centered and user-experienced centered services that most innovative fintech companies are proud of.
2. Startups could help banks promote financial inclusion
Because of the lean nature of fintech startups, they could collaborate with banks to help solve last mile problems such as lack of access to financial services and products in the countryside.
Startups usually focus on reducing costs, improving systems and customer experiences.
Both startups and banks should strive to drive change in communities by promoting financial inclusion.
3. There is no other way to go.
Banks do not have any choice but to adapt and innovate in an increasingly changing digital world. Fintech startups, on the other hand, also need to learn from the expertise and experience of financial institutions who have been operating for decades. They also need the banks for capital, data, and guidance on regulations in the sector.
The relationship between fintech startups and banking institutions in Asia should be viewed as a huge potential for a symbiotic relationship that could produce an endless number of possibilities.
Together, banking institutions and finctech startups could accelerate financial inclusion in Asia.