2019 has been a big year for us at Liquid Group as we seize the lead in spearheading the adoption of cross-border QR payments across the region. Over the past 10 years, we have seen many other mover and shakers across the FinTech arena play a significant part in shaping the unrivalled track record of digital transformation in Southeast Asia. By definition, digital transformation might mean the shift from physical to digital, but it is also about realising change in how people and businesses interact with technology.
In a dynamic market such as this, it’s hard to pinpoint the specific trends that are set to be the most promising for 2020. Instead, we look at three that excite us the most from a FinTech perspective, in terms of fueling industry efforts to improve on the delivery of a seamless customer experience.
Financial players will be agile as ever
Change is now an industry constant and at the rapid pace with which this is happening, it is impossible for either a bank or FinTech to go about it alone.
This new-found age of collaboration is where agility should kick in. When the right strategic partners are selected, there should be greater agility, a seamless integration with systems and products already in place through application programming interfaces (APIs), and an unprecedented level of synergy. It can be argued that it has occurred to many financial players that “if you can’t beat them, join them”. Partnerships are now the modus operandi for the financial services sector when it comes to FinTech.
More payment services will provide value-add services
The digitisation of retail payments in Singapore has taken off in the past 30 years, thanks to the work the Singaporean government has done in line with its Smart Nation initiative – that is, to become “a leading economy powered by digital innovation.” Such foundations have seen the country’s payment ecosystem grow larger. In fact, credit card acquiring has been a particularly attractive market and saw S$1bn in revenue in 2018.
In 2020, the priority for industry players will be to continue to think of ways of standing out and capturing a larger market share. This will come in the form of value-added services. It is relatively simple to create a platform that processes transactions and payments with ease; however, to engage the next generation connected consumer, we may need to go a step further to offer options that allow them to better manage their finances in addition to making transactions. Some are already playing out in several areas today, including:
Payment service providers also need to seek greater differentiation in value-added services to stay competitive. In turn, this translates into healthy competition for the industry to thrive. It’s customer-focused ideas like these that will equip them with the agility needed to compete.
5G will revolutionise how payments are done
5G promises three major improvements: faster network speeds, lower latency and more simultaneous connections.
5G is as much about ultra-low latency as about speed. 5G will mean next to no waiting time for banking and payment transactions – these will be done in an instant on your device. This will become more important in the short-term as the use of third-party APIs within banking grows, with third-party apps gaining access to banks' databases to make transactions. On the flip side, 5G will also accelerate security processes to protect users with multi-layered security defenses against cyber threats along with advances in regtech such as biometric identity capabilities.
At least two 5G networks will be rolled out in Singapore this year however, we might suffer from a case of “wait and see” mode for a while yet in terms of immediate benefits. The Infocomm Media Development Authority (IMDA) had called for telcos to submit deployment proposals last May with the intention to assign 5G airwaves to the two top submissions. The IMDA is pushing for all four telcos to support 5G – Singtel, StarHub, M1 and TPG Telecom – but implementation will start with smaller networks that will meet industrial needs, such as remote operation of heavy machinery. Their limited reach means that Singaporeans will be dependent on 4G connections which may result in network congestion.
Consumer expectations will continue to change. For the FinTech industry, this must be seen as the unwillingness to settle for services limited to how financial services has been traditionally done. 2020 will be the year to watch on how proactive action is taken to embrace change, take risks and disrupt business models, all in the name of setting the standard for digital transformation in payments for the next decade.