Investors in Fintech companies such as Singapore-based multi-family office and private equity firm, Golden Equator Capital, says they are always on the lookout for investment opportunities that centre on technological progress and companies that deliver high impact.
“Initially, these Fintech companies start off as competition for the banks as they fill gap areas that banks can’t perform efficiently and effectively. They provide solutions that are progressive and purposeful but at the same time, are also disruptive for the banks,” says Golden Equator Capital’s Managing Partner, Daren Tan.
More than $50 billion has been invested into 2,500 Fintech firms since 2010.
To capitalise on this growth wave, Golden Equator Capital has also launched a second Technology and Innovation Fund of SGD$100 million, which has a strong focus on Asean Fintech companies.
Fintech climate in Asia for 2017
On the current Fintech climate evolving in Asia for 2017, Daren explains that interest in Fintech has spiked over the past 2 years, with many financial institutions looking for Fintech solutions to service unbanked consumer demand for digital banking products and solutions.
“We see increasing cooperation between financial institutions and startups, in core areas such as payments, banking and insurance. Fintech startups have the advantage of being agile, but many consumers still place confidence in traditional financial institutions. There is a massive opportunity for Fintech startups and banks to collaborate and leverage each other’s strengths to bring financial solutions to the market at scale.”
As Fintech matures, it will be more apparent that technology is a necessary tool that helps extend into higher efficiencies and reach, maximising the same business fundamentals in areas of transactions, P2P/SME loans, insurance, wealth management and investments.
Despite still in its infancy, robo-advisory is also going to further upend the financial industry in 2017. Customers will benefit with lower fees and lower minimum commitment for top-notch investment portfolios.
Although wealth management is traditionally a relationship-driven business, the second or third generations of ultra-high net worth families, typically millennials, are increasingly adopting technology and artificial intelligence (AI) to advise on wealth and investment matters. The investment products for robo-advisors are also increasing in diversity and sophistication.