FinTech ecosystem playbook

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FinTech ecosystem playbook

FinTech ecosystem playbook

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Foreword

­In­recent­years,­services­provided­by­financial­technology­(FinTech)­start-ups­have­gained­prominence,­and­are­increasingly­impacting­consumers,­financial­institutions­and­economies.­Subsequently,­ecosystems­have­emerged­around­these­FinTechs,­consisting­of­multiple­interdependent­and­interconnected­stakeholders.

A­FinTech­ecosystem­is­made­up­of­consumers,­financial­institutions,­FinTech­start-ups,­investors,­regulators­and­educational­institutions.­The­healthy­development­of­such­an­ecosystem­will­result­in­mutually­beneficial­cooperation­among­stakeholders,­and­eventually,­help­financial­services­be­delivered­at­lower­cost,­higher­speed­and­at­better­quality­to­more­consumers.­The­development­is­particularly­distinct­in­emerging­markets­where­financial­services­present­unique­opportunities­and­challenges.

In FinTech­ecosystem­playbook,­the­teams­bring­you­a­panoramic­view­of­a­FinTech­ecosystem­in­emerging­markets­in­ASEAN,­Latin­America,­Central,­Eastern­and­Southeastern­Europe­&­Central­Asia­(CESA),­the­Middle­East,­Africa,­and­Asia-Pacific.­

The­regulators­and­policymakers­in­these­emerging­markets­are­actively­seeking­to­develop­attractive­FinTech­ecosystems­through­a­range­of­policies­and­other­interventions.­This­report­highlights­some­leading­practices­and­provides­a­summary­of­what­is­going­on­at­the­regional­and­country­level.­­

The­report­will­not­be­ranking­the­hubs­as­the­objective­is­to­help­each­hub­learn­from­global­peers­and­grow­the­industry­as­a­whole.­Sharing­these­leading­practices­and­success­stories­with­the­global­FinTech­community,­the­team­believes­will­help­us­make­a­difference,­together.

EY­teams­express­our­gratitude­to­FinTech­associations­and­ecosystem­enablers,­including­Fintech­Galaxy,­FINNOVASIA­and­FinTech­Consortium­(FTC).

FinTech ecosystem playbook

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ContentsFast facts

Objective of the study

Pillars of a FinTech ecosystem

Approach and coverage

FinTech hub trends

Cluster analysis

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Key cluster takeaways

ASEAN

Latin America

CESA

The Middle East

Africa

Asia-Pacific

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FinTech­investmentsVC-backed total FinTech investment reached

US$32.6b8b in 9M18 driven by a record investment of

US$14b raised by Ant Financial in 2Q18 from domestic and international investors

$ The deal volume in 9M18 stood at

1,164 deals.North America accounted for the maximum FinTech funding of approximately

US$9.3b in 9M18

Asia accounted for approximately

US$6.1bof the global FinTech funding in 9M18, excluding the Ant Financial deal

Europe accounted for approximately

US$2.7bof the global FinTech funding in 9M18

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Scope­of­the­study

Global­FinTech­landscape

Global­regulatory­network

unicorns are present in the global FinTech industry, with the most in North America

Global Financial Innovation Network (GFIN)was created by the UK Financial Conduct Authority, in August 2018 in collaboration with 11 financial regulators and related institutions

26 hubs in emerging markets

across 6 clusters

Fast­facts

Source:­FinTech­investment­data: Global­FinTech­Report­Q3­2018,­CB­Insights

FinTech­ecosystem­playbook

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Objective­of­the­study

FinTechs­are­ventures­that­leverage­technology­to­develop­new­and­augment­existing­capabilities­for­the­discovery,­distribution,­operations­and­servicing­of­financial­products­and­services.­

A­FinTech­ecosystem­comprises­‘tech-savvy’­start-ups­and­scale-ups,­regulators,­governments,­traditional­institutions,­investors,­and­talent­institutions.­Each­FinTech­ecosystem­is­constantly­evolving,­with­players­continually­interacting­and­developing.­Regulators­are­tasked­with­the­challenge­of­evolving­with­

the­industry.­They­need­to­ensure­that­competition­and­innovation­are­not­stifled­while­maintaining­the­safety­and­soundness­of­the­financial­system.

The FinTech ecosystem playbook captures­the­journey­of­26­FinTech­hubs­in­the­emerging­markets­—­their­experiences­and­learnings­in­the­process­of­building­a­strong­financial­services­ecosystem.­The­teams­highlight­the­best­industry­practices­from­these­markets­so­that­participants­learn­from­each­other

This report will facilitate hubs to think global and act local.

Review­of­hub-level­best­practices­that­drive­the­development­of­local­FinTech­ecosystems

Local drivers

Overview­of­key­global­FinTech­trends­that­are­redefining­the­financial­services­landscape

Global trends

Study­of­six­regional­clusters,­assessing­their­macroeconomic­environment­and­regional­opportunities

Regional opportunities

FinTech­ecosystem­playbook

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FinTech ecosystem playbook

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Pillars­of­a­FinTech­ecosystem

• Strong:­Collaboration­with­incumbents;­and­presence­of­accelerators,­incubators,­community­enablers­and­co-working­spaces­(public­or­corporate)

• Scalable:­Ease­of­access­to­local­and­international­markets

• Sustainable:­Government­and­industry­support­for­sustainable­development

Enabling­environment

• Attract:­Access­to­international­talent,­ease­of­mobility­and­visa­policies

• Upskill:­Development­of­talent­pipeline­—­university­courses,­research­and­development­investment

• Retain:­Policies­and­initiatives­that­would­reduce­‘brain­drain’­and­provide­conducive­environment­to­grow­and­flourish

Talent­availability

Sustained­demand• Consumers:­Digital­readiness­in­terms­of­mobile­and­internet­penetration,­

smartphone­penetration,­banking­penetration­and­ease­of­access­to­financial­services

• Corporations:­Demand­from­enterprises,­including­small-­and­medium-sized­enterprises­(SMEs)­and­institutions

• Financial­institutions:­Demand­from­financial­institutions­for­FinTech­offerings

• Risk­capital:­Access­to­angel­funding,­high-net-worth­individuals­(HNIs)­and­government­funds;­ease­of­raising­capital­from­alternative­sources­such­as­initial­coin­offerings­(ICOs)

• Growth­capital:­Access­to­VC­and­government­funds,­financial­institutions­and­tech­companies

• Strategic­capital:­Funding­from­traditional­institutions,­tech­firms,­corporates­and­private­equity­(PE)­funds

Access­to­capital

• FinTech­laws­:­Specific­regulations­and­policies

• Overall­regulatory­environment:­Ease­of­doing­business,­credit­availability,­taxation­policies,­visa­policies­and­presence­of­regulatory­sandboxes

• Competition:­Encouragement­of­competition­through­policies

Regulatory­openness

FinTech­ecosystem­playbook

Approach­and­coverage

Africa ASEAN Latin America CESA Middle East

Nigeria

Kenya

Singapore

Philippines

Malaysia

Brazil

Mexico

Estonia

Russia

UAE

Turkey

Bahrain

Hong­Kong­SAR,­China

South­Africa Indonesia Lithuania China

South­Korea

India

Vietnam

Cambodia

Thailand Czech­Republic Saudi­Arabia Japan

Asia-Pacific

The­six­clusters­and­respective­hubs­are­presented­below:

The­following­four-step­approach­is­undertaken­to­analyze­the­FinTech­ecosystem­of­26­hubs:

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UAE­constitutes­two­hubs­—­Dubai­and­Abu­Dhabi

Identify­the­overall­drivers,­trends­and­opportunities­at­each­of­the­six­regional­clusters

Assess­the­FinTech­ecosystem­of­26­hubs­by­leveraging­EY­extensive­research­capabilities,­and­network­of­EY­financial­services­and­FinTech­professionals­across­the­globe

Understand the­macroeconomic­and­digital­factors­driving­FinTech­development­at­cluster and­hub­level

Discuss­the­success­stories­of­26­hubs­by­studying­the­FinTech­initiatives

Advancing­technologies,­rapidly­expanding­economies­and­changing­customer­expectations­are­some­of­the­factors­driving­demand­for­FinTech­products­and­services­across­countries.­Broadly,­the­demand­for­FinTechs­can­be­categorized­into:

FinTech hub trends

Demand

• Individuals:­In­established­hubs­that­enjoy­high­banking­penetration,­demand­is­largely­driven­by­tech-savvy­consumers­looking­for­a­better­experience­and­a­wider­range­of­services.­In­emerging­markets­where­financial­inclusion­is­a­challenge,­FinTechs­are­helping­bridge­the­exclusion­gap.­Rapid­urbanization,­mobile­and­internet­penetration,­and­ease­of­use­are­driving­individual­demand­for­FinTech­services.­According­to­World­Bank’s­The Global Findex Report 2017,­69%­of­adults,­i.e.,­3.8­billion­people,­have­an­account­with­a­bank­or­a­mobile­money­provider,­which­is­an­increase­from­62%­in­2014­and­just­51%­in­2011.­The­rise­is­attributable­to­the­increasing­use­of­mobile­phones­and­the­internet.­Between­2014­and­2017,­the­percentage­of­users­sending­and­receiving­payments­digitally­increased­from­67%­to­76%­globally;­and­from­57%­to­70%­in­the­developing­world.­

• Corporations and SMEs: SMEs­present­an­attractive­opportunity­for­FinTechs.­Limited­

financial­history,­small­ticket­loans­and­high­servicing­cost­resulted­in­this­segment­being­underserved­by­traditional­institutions.­The­digitization­of­the­lending­process,­including­the­assessment­of­credit­risk,­is­providing­SMEs­with­an­alternative­way­of­funding.­Digital­identity­projects­in­hubs,­such­as­Singapore,­India,­China­and­Estonia,­are­presenting­new­opportunities­for­FinTechs­to­service­this­unmet­demand­in­an­efficient­manner.­

• Financial institutions: Banks­across­continents­are­partnering­with­and­investing­in­FinTechs­across­the­bank­value­chain­to­drive­efficiencies,­offer­new­products­and­augment­customer­experience,­resulting­in­rising­demand­for­business-to-business­(B2B)­solutions.

• Governments and regulators: Regulators­are­leveraging­FinTechs’­capabilities­to­improve­their­processes.­For­instance,­the­Monetary­Authority­of­Singapore­(MAS)­has­partnered­with­FinTech­firm­Anquan­for­blockchain-based­Project­Ubin.

Hub subsector specialization

Globally,­successful­hubs­tend­to­have­diversity­in­the­ecosystem,­with­start-ups­spanning­across­multiple­subsectors­and­growth­stages.­

FinTech­ecosystem­playbook

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FinTech­ecosystem­playbook

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At­the­same­time,­some­FinTech­hubs­have­identified­subsectors­where­they­have­certain­advantages,­and­have­managed­to­take­leadership­or­are­positioning­themselves­to­become­the­dominant­hub­for­those­subsectors.

Some­examples­include:

Switzerland for cryptocurrencySwitzerland,­where­regulators­displayed­a­clear­and­friendly­stance­in­favor­of­cryptocurrency­from­as­early­as­2014,­is­home­to­the­Crypto­Valley­in­the­city­of­Zug.

Malaysia for Islamic bankingWith­an­estimated­Muslim­population­of­61.3%,­and­an­enabling­regulatory­environment,­Malaysia­has­made­considerable­advances­in­the­Islamic­banking­sector.

Stockholm for paymentsStockholm­has­established­itself­as­a­payments­giant­by­providing­a­conducive­environment­for­payment­FinTechs,­and­is­the­home­of­FinTech­unicorns­Klarna­and­iZettle.­

Increased access to government-backed funding:

Capital

• For­FinTech­entrepreneurs,­access­to­capital­often­depends­on­a­number­of­factors­including­the­stage­of­product­maturity,­background­of­founders,­headquarter­location­of­the­company­and­target­customer­segment.­To­ease­some­of­the­capital­challenges,­governments­globally­are­supporting­start-ups­by­giving­access­to­risk­and­growth­capital.­Some­hubs­have­dedicated­funds­or­fund-of-funds­(FOF)­to­support­FinTechs­in­their­growth­phase:

• The­Dubai­International­Financial­Centre­(DIFC)­launched­a­US$100m­FinTech-focused­fund­in­November­2017­to­accelerate­the­development­of­the­FinTech­sector­by­investing­in­start-ups,­from­incubation­to­growth­stage.

• The­Government­of­India­(GoI)­introduced­the­Startup­India­initiative­in­January­2016­that­included­a­US$1.5b­FOF­for­start-ups.

• In­June­2018,­Bahrain­Development­Bank­(BDB)­

announced­that­Al­Waha­Fund­of­Funds,­its­VC­FOF,­to­support­start-ups­in­Bahrain­and­across­the­Middle­East­and­North­Africa­(MENA)­region,­had­raised­US$100m.

• In­2017,­Hong­Kong­Government­launched­the­US$256m­Innovation­and­Technology­Venture­Fund­to­invest­in­local­technology­start-ups.

• In­June­2015,­Singapore’s­MAS­committed­S$225m­over­a­five-year­period­for­the­Financial­Sector­Technology­and­Innovation­scheme.­In­December­2017,­it­announced­the­launch­of­the­S$27m­Artificial­Intelligence­and­Data­Analytics­(AIDA)­Grant­under­the­scheme.

• Policymakers­are­also­taking­initiatives­to­improve­access­to­private­capital:

• In­July­2018,­the­Estonian­Government,­through­its­EstFund­FOF,­invested­€60m­into­VC­funds­to­support­start-ups­and­SMEs.­Private­investors­will­add­€40m­to­

these­VC­funds.­

• This­year’s­FinTech Investor Summit under­the­MAS-sponsored Singapore FinTech Festival 2018­has­two­components­—­(a)­the­FinTech­Deal­Day­that­connects­FinTechs­with­potential­investors­and­(b)­Meet ASEAN’s­Talents­and­Champions­(MATCH)­that­connects­start-ups­and­enterprises­in­ASEAN­across­all­sectors­with­potential­investors.­The­380­participating­investors­who­enrolled­for­MATCH­have­indicated intentions to invest up­to­a­total­of­US$6.2b­in­ASEAN­enterprises­next­year,­and­an­additional­US$6b­earmarked­over­the­subsequent­two­years.­More­than­17,000­matches­were­generated­between­the­380­participating­investors­and­840­enterprise.

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Talent

• The­most­sought-after­technical­talent­include­data­scientists,­financial­engineers,­mobile­marketers­and­computer­programmers.

• The­Big­Tech­firms­are­giving­stiff­competition­to­FinTechs­and­financial­institutions­in­their­efforts­to­attract­strong­tech­talent.

• Some­countries,­such­as­the­UK,­France­and­the­UAE,­are­

attempting­to­import­technical­talent­from­other­countries­by­offering­special­visas.­The­UK­offers­a­visa­route­under­the­UKRI­Science,­Research­and­Academia­scheme­for­non-European­Economic­Area­(EEA)­researchers­and­plans­to­offer­start-up­visas­for­foreign­tech­entrepreneurs.­The­UAE­introduced­a­10-year­residency­visa­for­investors­and­specialists.­Meanwhile,­countries­such­as­

Estonia­and­Lithuania­have­Startup­Visa­programs.

• Nurturing­domestic­talent­is­a­sustainable­solution­to­the­talent­unavailability­challenge­faced­by­FinTechs­and­financial­institutions.­Hong­Kong­and­Singapore­are­moving­toward­this­direction­by­partnering­with­schools­to­train­students­to­develop­FinTech­knowledge­and­capabilities.­

Attracting talent considered key by FinTechs:

Making the workforce future-ready through FinTech-focused talent initiatives:

• As­competition­for­tech­talent­intensifies­globally,­hubs­are­developing­FinTech-focused­specialized­programs­and­initiatives­to­develop­the­local­talent­pool.­Some­initiatives­being­taken­by­the­hubs­include:

• FinTech-specific­courses­and­programs­including­government-led­initiatives:­

• Singapore­offers­FinTech-specific­courses­under­its­SkillsFuture­program.­The­National­Trades­Union­Congress,­Singapore­Polytechnic­(SP)­and­the­Singapore­FinTech­Association­(SFA)­have­jointly­created­the­FinTech­Talent­Programme.­

• The­Hong­Kong­Government­has­launched­two­dedicated­publicly­funded­degrees­in­FinTech,­beginning­academic­year­2017-18:­Bachelor­of­Engineering­Programme­in­Financial­Technology­at­The­Chinese­University­of­

Hong­Kong­and­Bachelor­of­Science­(Hons)­in­Financial­Technlogy­at­Hong­Kong­Polytechnic­University.

• In­India,­Bombay­Stock­Exchange­launched­an­MBA­program­in­FinTech­in­association­with­the­University­of­Mumbai­in­2017.

• Abu­Dhabi­Global­Market­(ADGM)­offers­FinTech-specific­courses­through­the­ADGM­Academy.

• FinTech­talent­incubator­and­accelerator­programs:­

• The­Hong­Kong­Monetary­Authority­(HKMA)­has­partnered­with­the­Hong­Kong­Applied­Science­and­Technology­Research­Institute­(ASTRI)­for­the­Fintech­Career­Accelerator­Scheme­(FCAS),­which­provides­internship­in­the­FinTech­industry­to­undergraduate­and­postgraduate­students.

• Singapore­has­launched­the­TechSkills­Accelerator­(TeSA)­FinTech­Collective­to­strengthen­Singapore’s­infocomm­and­FinTech­talent­pool.

• Online­learning­initiatives:­In­October­2017,­the­University­of­Hong­Kong­(HKU)­launched­Asia’s­first­FinTech­Massive­Open­Online­Course­(MOOC).­­

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Regulations

To­increase­competition­and­provide­an­enabling­environment­for­FinTech­firms,­countries­are­pushing­out­initiatives­in­varying­degrees­with­regards­to­Open­Banking.­It­allows­FinTechs­to­leverage­on­banks’­data­to­provide­and­extend­their­offerings­to­bank­customers.­The­teams­have­highlighted­a­few­of­the­different­approaches­undertaken­by­regulators:

Facilitation of innovation through Open Banking

Regulatory trends

Change­is­constant­in­the­FinTech­space,­with­each­idea­being­more­revolutionary­than­the­previous­one.­It­is­a­momentous­task­for­regulators­to­provide­regulatory­oversight­to­protect­consumers­while­being­mindful­of­not­inhibiting­innovation.­Regulators­have­taken­different­approaches,­but­they­have­largely­converged­into­a­few­similar­ways:

• Introduction of sandboxes: FinTechs­within­a­sandbox­are­able­to­launch­products­and­services­without­necessary­licenses.­However,­the­number­of­consumers­whom­they­can­serve­would­be­limited­to­contain­any­possible­negative­effects.­At­the­same­time,­regulators­would­be­able­to­have­constant­consultations­with­companies­within­the­sandbox­to­understand­the­subsector.­

• Economic zones:­Some­countries­have­created­special­economic­zones­where­innovative­firms­can­be­set­up.­These­zones­have­varying­benefits;­but­the­underlying­concept­is­the­same­—­to­provide­a­location­for­the­firms­to­innovate­and­offer­assistance­through­regulations­that­are­specific­to­the­zones.­These­regulations­may­include­lower­taxes,­permission­to­operate­

without­necessary­licenses­(or­with­special­licenses)­and­frequent­consultations­with­regulators.

• Consultations with industry players:­Regulators­have­been­running­consultations­with­industry­players­to­learn­where­the­industry­is­heading­to,­in­order­to­gain­an­understanding­of­the­industry­and­know­how­they­could­support­the­industry­while­protecting­the­consumers.­

• Guiding principles and frameworks rather than rules: As­the­FinTech­space­is­ever-changing,­some­regulators­have­implemented­guiding­principles­to­make­their­stance­clear,­instead­of­creating­definite­rules­that­may­inhibit­innovation.

• FinTech laws or licenses: To assist­FinTechs­within­the­local­environment­without­changing­

much­of­the­local­regulations,­some­countries­have­rolled­out­FinTech-related­laws­or­licenses­that­allow­FinTechs­to­operate­without­the­need­to­gain­a­banking­license.­

• The­UK­pioneered­Open­Banking,­launching­the­initiative­in­January­2018,­that­mandates­nine­UK­banks­to­open­up­their­data­via­a­set­of­secure­application­program­interfaces­(APIs).­

• Singapore’s­MAS­is­encouraging­financial­institutions­to­adopt­Open­API­as­a­key­foundational­layer­for­innovation­and­interoperability,­although­it­is­

not­mandated.­

• In­July­2018,­Hong­Kong’s­HKMA­launched­the­draft­Open­API­framework,­which­set­out­timelines­for­institutions­to­follow,­and­made­recommendations­on­specific­protocols­and­data­formats.­The­framework­also­laid­out­expectations­on­how­banks­should­deploy­Open­API.

• In­the­EU,­the­revised­Payment­Service­Directive­(PSD2)­requires­banks­to­share­information­of­their­customers’­accounts­with­third­parties­with­the­authorization­of­the­customers.

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Collaboration among regulators

Regulations­(continued)

A­major­concern­for­FinTechs­when­exporting­their­services­is­the­differing­local­regulations.

Regulators­are­aware­of­this­and­have­taken­steps­to­mitigate­this­challenge.­FinTech­industry­associations­and­financial­regulators­are­entering­into­partnerships­globally­to­share­leading­practices,­experiences­and­frameworks,­and­to­help­

FinTech­firms­expand­in­each­other’s­market.­Regulators­in­the­UK,­Singapore­and­Australia­have­entered­into­the­most­number­of­bilateral­agreements­with­other­regulators.

The­newest­measure­to­improve­collaboration­among­regulators­is­the­Global­Financial­Innovation­Network­(GFIN).­Twelve­financial­regulators­launched­the­GFIN­

in­August­2018.­The­purpose­is­to­provide­an­efficient­way­for­innovative­firms­to­interact­with­regulators,­helping­them­navigate­among­hubs­to­scale­new­ideas.­It­is­also­expected­to­create­a­new­framework­for­cooperation­among­financial­services­regulators­on­innovation-related­topics.­

Abu Dhabi Singapore, Australia

Canada Australia, UK, France

Mainland China UK, Australia, Hong Kong

France Canada, Singapore, Mauritius

Hong Kong UK, Dubai, Australia, Switzerland

Singapore UK, Dubai, South Korea, Australia

London US, Australia, Canada

United States UK, Singapore, Canada

Hubs Instances of bilateral agreements

Regulators are experimenting with new technologies such as DLT

Some­governments­are­aware­that­distributed­ledger­technology­(DLT)­can­improve­processes.­They­are­experimenting­with­blockchain­technology­in­areas­such­as­payments­(including­wholesale­payments,­sovereign­currency,­trade­finance­and­interbank­payments).­Some­examples­of­DLT­being­adopted­by­governments­are:

• In­July­2018,­Hong­Kong’s­HKMA,­along­with­seven­local­lenders,­announced­that­it­is­going­to­launch­a­blockchain-based­trade­finance­platform­in­September­2018.­

• The­South­African­Reserve­Bank­(SARB)­conducted­a­successful­

blockchain­experiment­for­wholesale­payments­using­the­technology.

• Hubs,­such­as­Singapore,­Canada­and­the­US,­are­experimenting­with­their­own­digital­currencies.

• Some­small­jurisdictions,­such­as­Malta,­Gibraltar­and­Bermuda,­have­taken­a­crypto-friendly­stance to attract crypto or DLT­firms­to­domicile­in­their­jurisdictions.

FinTech ecosystem playbook

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Speeding innovation through public accelerator programs

Receiving support from traditional financial institutions

Offering FinTechs global platform through branding and positioning initiatives

Environment

• Incubators,­accelerator­programs­and­innovations­labs­or­centers­are­important­levers­to­drive­the­FinTech­sector­in­an­economy.­Hubs­globally­have­recognized­the­significance­of­these­programs­aimed­at­developing­start-ups­by­providing­mentoring,­funding,­training,­networking,­and­marketing­and­public­relation­opportunities:

• Dubai’s­DIFC­has­launched­its­FinTech­Hive­accelerator­program,­which­focuses­on­FinTech­opportunities­in­the­Middle­East,­Africa­and­South­Asia­(MEASA)­region’s­financial­sector.

• ADGM­in­Abu­Dhabi­has­tied­up­with­Plug­and­Play­to­launch­its­accelerator­in­October­2017.

• K-Startup­Grand­Challenge­is­a­government-supported­start-up­accelerator­program­in­South­Korea.

• Singapore’s­MAS­runs­its­global­accelerator­program,­Global FinTech Hackcelerator, focusing­on­start-ups­across­the­globe.

• It­is­imperative­that­government-­led­initiatives­are­supported­by­industry­participants­in­order­to­ensure­a­thriving­FinTech­ecosystem.­Financial­institutions­globally­are­supporting­the­sector­through­various­initiatives:

• Banks­globally,­such­as­Citi,­

HSBC,­Santander,­BBVA,­United­Overseas­Bank­and­Bank­Mandiri,­have­dedicated­funds­to­invest­in­FinTech­ventures.­It­helps­banks­to­achieve­a­two-fold­objective:­investing­to­enjoy­the­benefits­of­rising­FinTech­valuations,­and­leveraging­

the­FinTechs’­technological­advantage­in­order­to­improve­their­own­products­and­processes.

• Banks­are­actively­engaging­with­FinTechs­through­innovation­labs,­hackathons­and­accelerator­programs.

• Several­hubs­globally,­through­FinTech­events­and­programs,­are­providing­FinTechs­with­a­platform­to­connect,­collaborate­and­network­with­investors,­tech­players,­industry­participants­and­regulators.­These­events­encompass­a­series­of­conferences,­workshops,­awards­and­exhibitions­as­well­as­networking,­among­other­activities:

• The­Singapore FinTech Festival (a­week-long­event)­is­organized­by­MAS­in­partnership­with­the­Association­of­Banks­in­Singapore­and­in­collaboration­with­SingEx­Holdings.­It­includes­the­Global FinTech Hackcelerator, FinTech­conference­and­exhibition,­the­FinTech Investor Summit and FinTech Awards.

• Hong Kong FinTech Week 2018, hosted­by­Invest­Hong­Kong­

(InvestHK),­offers­a­window­into­Hong­Kong’s­position­as­Asia’s­financial­hub,­and­as­an­entry­point­to­People’s­Republic­of­China­and­the­Greater­Bay­Area.­The­third­annual­Hong Kong FinTech Week,­held­from­29­October­2018­to­2­November­2018,­is­the­first­cross-border­FinTech­event,­expanding­from­Hong­Kong­to­Shenzhen.­

Cluster analysis

Cluster: Key takeaways

ASEAN Fast-growing­economies­with­large­populations make­a­unique­playground

Drivers The­kind­of­demand­and­supply­that­have­been­driving­the­development­of­the­ecosystem­so­far

SpotlightNotable­players­and­trends­that­have­emerged­in­the­local­and­regional­ecosystem

OpportunityAreas­that­present­significant­room­for­growth­in­the­near­future

Drivers ASEAN­is­the­connecting­bridge­between­China­and­India,­making­it­a­perfect­place­for­large­local­and­global­players­to­collaborate­and­compete.­Regulators­are­supporting­innovation,­but­at­the­same­time,­are­cautious­in­order­to­ensure­that­the­financial­system­is­prepared­to­handle­the­stress­of­a­global­financial­crisis.

SpotlightE-commerce,­and­social­and­mobility­players­are­expanding­into­the­financial­services­field,­leveraging­on­their­large­user­base.

FinTech­ecosystem­playbook

14

FinTech ecosystem playbook

15

OpportunityThe­region­has­some­of­the­fastest-growing­economies­with­the­largest­population­bases,­and­a­strong­historical­and­cultural­heritage.­As­these­economies­continue­to­grow,­there­will­be­more­demand­for­better­quality­services.

Drivers Several­governments­are­considering­FinTech­development­as­one­of­the­pillars­to­increase­financial­inclusion.­The­development­of­FinTech­has­been­driven­by­start-ups­seeking­to­serve­segments­previously­inadequately­addressed­by­the­financial­system.­Financial­inclusion­will­drive­sustainable­economic­development.

SpotlightPrivate­corporations­and­international­investors­are­building­ventures­to­complement­existing­financial­services­providers.­

OpportunityCollaboration­in­the­region­is­becoming­more­frequent­and­the­development­of­the­FinTech­industry­will­allow­the­expansion­in­quantity­and­quality­of­synergies­among­different­actors­in­the­ecosystem.

Latin America Opportunities­in­underserved­market

FinTech ecosystem playbook

Drivers At­the­turn­of­the­century,­these­economies­opened­up,­and­since­then­have­become­an­attractive­investment­destination­due­to­consumer­spending­growth,­competitive­wage­rates­and­skilled­workforce.­The­region­has­strong­infrastructure­and­talent­that­are­being­leveraged­upon.­

SpotlightThe­region­is­developing­home­grown­companies­and­attracting­international­companies­to­set­up­headquarters­to­service­the­EU­market.

OpportunityBy­being­part­of­the­EU,­countries­have­access­to­a­large­unified­market.­The­region­is­placed­strategically­between­Asia,­the­Middle­East­and­Europe,­and­can­be­a­bridge­for­companies­expanding­geographically­in­these­areas.

CESA Leveraging­strong­talent­base­

The Middle East Government­support­and­capital­driving­FinTech­growth­

Drivers Capital­has­been­one­of­the­key­strengths­of­the­region­due­to­the­presence­of­large­sovereign­and­private­funds­that­have­a­long­history­of­global­investments.­Several­states­view­FinTech­as­a­major­alley­to­diversify­their­economies­from­natural­resources­and­have­specific­initiatives­to­drive­financial­services.­

16

FinTech­ecosystem­playbook

FinTech ecosystem playbook

17

Drivers The­region­has­one­of­the­largest­concentration­of­the­unbanked­and­underbanked­population,­which­provides­an­opportunity­for­leapfrogging­several­generations­of­technology­and­infrastructure­to­provide­a­cutting­edge­solution.­For­example,­the­region­has­skipped­landlines­and­2G­to­go­directly­to­3G­and­4G.­

SpotlightSeveral­wallets­backed­by­telecommunication­companies­have­become­global­case­studies­of­financial­inclusion.­Most­of­the­innovation­is­driven­by­telecom­players,­which­is­unique­to­the­region.­

OpportunityLarge­penetration­of­mobile­money­accounts­present­opportunities­to­FinTechs­to­explore­expansion­in­other­areas­including­alternative­lending,­cross-border­transfers,­personal­finance­and­remittances.­Collaboration­with­local­financial­players­can­help­FinTechs­navigate­this­market.

Africa Leapfrog­innovations­

SpotlightSome­of­the­hubs­have­regulatory­technology­(RegTech)­as­primary­focus.­Others­have­positioned­themselves­as­launchpads­to­service­the­whole­Middle­East­market.

OpportunityThe­region­offers­unique­opportunity­to­FinTech­products­and­services­that­are­focused­on­Islamic­banking.­FinTechs­can­also­help­solve­the­challenge­of­fragmented­access­to­financial­services­in­the­region.

Mainland­China­and­Hong­Kong:

Drivers In­Mainland­China,­confluence­of­factors,­including­relaxed­regulations,­vast­market­of­unaddressed­financial­needs­and­the­growth­in­digital­penetration,­revolutionized­financial­services­and­made­FinTech­‘a­way­of­life’.­Proximity­to­Mainland­China­and­supportive­regulations­are­the­key­drivers­for­FinTech­in­Hong­Kong.

SpotlightMainland­China­has­independent­finance­and­lifestyle­(FinLife)­ecosystems­that­started­out­as­e-commerce­and­chat­platforms­before­developing­into­full-scale­financial­services­providers­going­on­to­earn­bank­licenses.

OpportunityFor­China-based­companies,­levering­data­and­tech­to­expand­outside­core­areas­as­well­as­in­global­markets­is­key­to­growth.

India:

Drivers Government-led­digital­infrastructure,­and­rapid­urbanization­and­mobile­penetration­is­driving­the­development­of­FinTech­sector,­particularly­in­payments.

SpotlightIndian­FinTech­players­are­raising­large­funding­from­foreign­investors­looking­to­expand­overseas.­India­is­now­home­to­two­FinTech­unicorns.

Asia Rise­of­independent­FinLife­ecosystem­platforms­in­Greater­China;­and­India­bringing­the­best­from­East­and­West.

18

FinTech­ecosystem­playbook

FinTech ecosystem playbook

19

OpportunityIn­India,­global­investors,­such­as­Chinese­internet­finance­players­and­American­e-commerce­players,­have­set­up­greenfield­ventures­as­well­as­invested­significantly­in­local­ventures,­creating­an­interesting­stage­for­a­FinTech­ecosystem­to­be­built.­B2B­business­models­are­gaining­prominence­given­the­backdrop­of­government­initiatives.

ASEAN

Key­highlights

The­International­Financial­Corporation,­along­with­regional­stakeholders,­established­the­ASEAN­Financial­Innovation­Network­(AFIN)­in­2017­to­facilitate­collaboration­among­financial­institutions­with­the­primary­objective­of­financial­inclusion.

The­region­has­an­estimated­population­of­646­million,­with­a­median­age­of­28.8­years.­It­has­a­58%­internet penetration rate­with­390.8­million­mobile­users.­FinTech­investment­was­US$366m­in­2017.

ASEAN­Fintech­Network­(AFN)­was­launched­in­November­2017­to­enable­collaboration­and­cooperation­on­FinTech­ecosystems­among­six­participating­nations.

Malaysia

Thailand

Indonesia

Philippines

Singapore

Cambodia

Vietnam

FinTech­ecosystem­playbook

20

FinTech ecosystem playbook

21

Key­highlights

Thailand

GDP: US$455.8b | 2017

GDP­growth­(y-o-y):­3.9%GDP­per­capita:­US$6,601

Population:­69 million

Inflation:­0.7%FDI­inflow­(%­of­GDP):­2%Regulatory­sandbox:­Yes

Indonesia

GDP: US$1.0t | 2017

GDP­growth­(y-o-y):­5.1%GDP­per­capita:­US$3,842

Population:­264.3 million

Inflation:­3.8%FDI­inflow­(%­of­GDP):­2.2%Regulatory­sandbox:­Yes

Vietnam

GDP: US$220.6b | 2017

GDP­growth­(y-o-y):­6.8%GDP­per­capita:­US$2,310

Population:­95.5 million

Inflation:­3.5%FDI­inflow­(%­of­GDP):­6.3%Regulatory­sandbox:­No

Philippines

GDP: US$313.5b | 2017

GDP­growth­(y-o-y):­6.7%GDP­per­capita: US$2,982

Population: 105 million

Inflation:­2.9%FDI­inflow­(%­of­GDP):­3.2%Regulatory­sandbox:­Yes

Cambodia

GDP: US$22.2b | 2017

GDP­growth­(y-o-y):­6.9%GDP­per­capita:­US$1,387

Population:­16 million

Inflation:­2.9%FDI­inflow­(%­of­GDP):­11.4%*Regulatory­sandbox:­No

Malaysia

GDP: US$315.2b | 2017

GDP­growth­(y-o-y):­5.9%GDP­per­capita:­US$9,949

Population:­32 million

Inflation: 3.8%FDI­inflow (%­of­GDP):­3%Regulatory­sandbox:­Yes

Singapore

GDP: US$324.1b | 2017

GDP­growth­(y-o-y):­3.6%GDP­per­capita:­US$57,749

Population:­5.6 million

Inflation:­0.6%FDI­inflow­(%­of­GDP):­19.6%Regulatory­sandbox:­Yes

FinTech ecosystem playbook

22

Digital­readinessInternet bandwidth (kb/s/user)

982.923.6

49.2

24.9

91.3

42.6

43.4

Mobile subscriptions (per 100 people)

110

134

126

174

176

117 148

Cambodia

Indonesia Malaysia Singapore

Thailand Vietnam Philippines

Cambodia Indonesia Malaysia

Singapore Thailand Vietnam Philippines

Financial­parameters

Banking penetration (%) Debit card ownership (%)

7 92

60 27

31 74

21

Credit card ownership (%)0.6 2.4 21.3

1.94.19.8

48.9

Made or received digital payments in the past year (% age 15+ years of population)

16 35 70

25

90

62 23

Sources: 1.­ ASEAN­stats:­EY­ASEAN­FinTech­Census­2018­Report,­February­2018

2.­ Gross­Domestic­Product­(GDP)­and­population,­inflation:­Oxford­Economics­

3.­ FDI­inflow­and­Mobile­Subscriptions:­World­Bank­Open­Data

4.­ Internet­users­and­internet­bandwidth:­The­Global­Competitiveness­Report­2017–2018,­World­Economic­Forum

5.­ Financial­Parameters:­The­Global­Findex­Database,­World­Bank

*­FDI­inflow­Cambodia­-­Considered­2016­figures­instead

46.5%55.5%

47.5%81.0%78.8%25.4%25.6%

Internet users (%)

68.9%30.8%81.6%97.9%85.3%48.9%21.7%

FinTech ecosystem playbook

23

Success stories

Singapore• MAS­set­up­the­Financial­

Technology­and­Innovation­Group­(FTIG)­within­its­organizational­structure­in­2015.­The­formation­of­FTIG­­is­a­commitment­by­MAS­toward­the­vision­of­a­smart­financial­center.­In­2016,­MAS­set­up­FinTech­Office­to­serve­as­a­one-stop­virtual­entity­for­all­FinTech­matters.

• Other­initiatives­of­the­Singapore­Government­include­the­FinTech­Regulatory­Sandbox,­RegTech­initiatives­and­the­introduction­of­blockchain­for­interbank­payments.­In­2015,­MAS­announced­that­it­would­commit­S$225m­over­the­following­five­years­for­FinTech­projects.­MAS­has­also­issued­guidance­on­ICOs­and­plans­to­issue­guidelines­for­the­use­of­artificial­intelligence­(AI)­in­the­industry.

• The­annual­Singapore FinTech Festival­sees­the­participation­of­thousands­of­start-ups­and­investors.­Over­30,000­people­from­109­countries­representing­more­than­5,000­companies­took­part­in­the­festival­in­2017.­

• The­Intellectual­Property­Office­of­Singapore­launched­the­FinTech­Fast­Track­initiative,­which­provides­expedited­patent­application-to-grant­process­for­FinTech­inventions.

• Singapore­FinTech­Association­(SFA)­is­a­cross-industry­initiative­that­has­over­300­members.

Malaysia• Malaysia­was­the­first­country­

in­ASEAN­to­introduce­a­regulatory­framework­for­equity­crowdfunding­(ECF)­and­peer-to-peer­(P2P)­financing.­Bank­Negara­Malaysia­(BNM)­has­established­cross-functional­Financial­Technology­Enabler­Group­(FTEG)­within­the­bank.­FTEG­is­responsible­for­formulating­and­enhancing­regulatory­policies­to­facilitate­the­adoption­of­technological­innovations­in­the­Malaysian­financial­services­industry.­BNM­also­launched­an­Open­API­working­group­in­September­2018.

• Malaysia­aspires­to­become­an­Islamic­FinTech­hub,­as­evidenced­by­strong­support­from­regulators.

• BNM­released­guidelines­on­e-KYC­in­2017.­The­guidelines­set­out­minimum­requirements­and­standards­that­an­approved­remittance­service­provider­must­observe­in­implementing­e-KYC.

Indonesia• FinTech­growth­in­Indonesia­is­in­

digital­payments,­underpinned­by­huge­e-commerce­boom­in­the­country.­Of­late,­the­country­

witnessed­an­active­payments­M&A­market,­with­regional­players­trying­to­expand­their­presence.

• Indonesia’s­financial­services­authority,­Otoritas­Jasa­Keuangan­(OJK),­formed­the­FinTech­Advisory­Forum­in­2017­to­ensure­constructive­coordination­among­agencies,­ministries,­FinTech­start-ups­and­other­relevant­parties.­

FinTech­distribution­in­ASEAN

15%

43%

6%4%

5%

8%

8%

11%

Payment and mobile wallets

Financial comparison

Retail investment

Blockchain

Financial lending

Financial and business tools

Account software

Others

Source: UOB­State­of­FinTech­in­ASEAN(Published:­November­2017)

24

Success stories

FinTech­ecosystem­playbook

FinTech ecosystem playbook

25

Thailand• The­Bank­of­Thailand­(BOT)­has­

launched­a­sandbox,­and­formed­forums­to­promote­sharing,­discussions­and­consultations­with­academicians,­incumbents­and­regulators.

• Major­Thai­banks­have­set­up­their­corporate­venture­arms­to­invest­in­FinTechs.

• In­June­2018,­the­Securities­and­Exchange­Commission­of­Thailand­announced­a­regulatory­framework­for­ICOs­and­ICO­portals.­The­framework­became­effective­in­July­2018.­

Vietnam• In­January­2017,­the­Vietnamese­

Government­signed­a­policy­decision­aimed­to­significantly­reduce­cash­transactions­and­improve­electronic­payment­methods­by­2020.­Under­the­plan,­total­cash­transactions­would­be­less­than­10%­of­total­market­transactions.

• The­Fintech­Steering­Committee­was­established­by­the­State­Bank­of­Vietnam­(SBV),­the­country’s­central­bank­in­March­2017.­Its­aim­is­to­advise­the­government­on­FinTech­ecosystem­development,­which­includes­helping­the­government­in­the­development­of­a­regulatory­framework,­to­ensure­growth­in­the­industry­and­support­FinTech­innovation.

• In­May­2018,­SBV,­Asian­Development­Bank­(ADB),­the­Australian­Government­and­Mekong­Business­Initiative­launched­the­FinTech Challenge Vietnam­event,­seeking­solutions­

from­start-ups­to­address­some­challenges­of­financial­inclusion­in­Vietnam.­The­event­saw­the­participation­of­141­FinTech­companies,­45­of­which­were­Vietnamese.

Philippines• In­December­2015,­the­Bangko­

Sentral­ng­Pilipinas­(BSP)­launched­the­National­Retail­Payment­System­(NRPS),­which­aims­to­enable­any­user­with­a­bank­or­electronic­money­account­to­do­electronic­fund­transfer­(EFT)­from­one­account­to­another­account­in­any­participating­financial­institution.­

• As­of­April­2018,­the­BSP­is­also­piloting­RegTech­solutions­to­strengthen­its­risk-based­regulatory­and­supervisory­activities.­The­BSP­had­partnered­with­the­RegTech­for­Regulators­Accelerator­(R2A),­a­project­that­provides­technical­assistance­for­financial­sector­regulators­to­develop­and­test­digital­supervision­tools­and­techniques.

Cambodia• As­of­July­2017,­the­National­

Bank­of­Cambodia­(NBC)­was­developing­a­national­financial­inclusion­strategy,­with­the­private­sector­playing­a­pivotal­role,­to­bank­significant­number­of­adult­Cambodians­and­provide­formal­financial­services.

Success stories

ASEAN­FinTech­Network­(AFN)­was­launched­in­November­2017­to­enable­collaboration­and­cooperation­on­FinTech­ecosystem­between­six­participating­nations

According­to­World­Bank’s­Global Findex Database 2017, the­mobile­internet­penetration­in­Latin­America­and­Caribbean­region­is­55%,­which­is­15%­more­than­the­developing­world­average.

The­region­has­an­estimated­population­of­553­million­with­80%­of­people­living­in­urban­areas.

There­are­about­1,034­FinTech­start-ups­in­Latin­America,­of­which­41%­service­underserved­or­excluded­customers­and­the­SME­market.

Latin America

Mexico

Brazil

Key­highlights

26

FinTech­ecosystem­playbook

FinTech ecosystem playbook

27

Mexico

GDP: US$1.2t | 2017

GDP­growth­(y-o-y):­2.3%GDP­per­capita:­US$8,935

Population:­129.4 million

Inflation:­6.0%FDI­inflow­(%­of­GDP):­2.8%Regulatory­sandbox:­Yes

Brazil

GDP: US$2.1t | 2017

Real­GDP­growth­(y-o-y):­1.0%GDP­per­capita: US$9,810

Population: 209.5 million

Inflation:­3.5%FDI­inflow­(%­of­GDP):­3.4%Regulatory­sandbox:­No

Digital­readiness

Internet bandwidth (kb/s/user)

66.2 24.9

Mobile subscriptions (per 100 people)

113.0 88.5Brazil

Mexico

Internet users (%)

59.559.7

Key­highlights

28

Success stories

Financial­parameters

Debit card ownership (%)

59 25

Credit card ownership (%)

27 10

Banking penetration (%)

36.970.0

Made or received digital payments in the past year (% age 15+ years of population)

Sources: 1.­ Finnovista

2.­ Wearesocial­Digital­in­2018­report

3.­ Urbanisation­in­Latin­America,­BBVA­Research,­July­2017

4.­ Gross­Domestic­Product­(GDP),­GDP­per­capita,­population­and­inflation:­Oxford­Economics­

5.­ FDI­inflow­and­Mobile­Subscriptions:­World­Bank­Open­Data

6.­ Internet­users­and­internet­bandwidth:­The­Global­Competitiveness­Report­2017–2018,­World­Economic­Forum

7.­ Financial­Parameters:­The­Global­Findex­Database,­World­Bank

Brazil• In­April­2018,­the­Central­Bank­

of­Brazil­issued­a­regulation­that­grants­autonomy­to­electronic­lending­platforms­to­carry­out­loan­transactions­directly­between­borrowers­and­lenders­by­introducing­two­new­categories­of­financial­institutions­—­P2P­companies­and­direct­credit­companies.­

• Banks­in­Brazil­have­been­connecting­with­FinTechs­through­funding­and­incubation.

• The­Securities­and­Exchange­Commission­of­Brazil­runs­its­FinTech­Hub,­which­aims­to­analyze­the­development­and­application­of­FinTech­in­capital­markets.

Mexico• Mexico­Financial­Technology­

Institutions­Law­became­effective­in­March­2018.­It­provides­regulatory­certainty­on­issues­including­crowdfunding,­payment­methods­and­cryptocurrencies.­Mexico­became­one­of­the­few­countries­globally­to­regulate­the­sector.

• A­regulatory­sandbox­was­introduced­to­allow­companies­to­obtain­a­temporary­authorization­for­a­maximum­of­two­years.

58 32Brazil Mexico

FinTech­ecosystem­playbook

FinTech ecosystem playbook

29

FinTech­landscape­in­Latin­America­—­2017­­­­­­-18

Source:­FinTech­ecosystem­in­Latin­America,­Finnovista

Mexico

Brazil

Colombia

Argentina

Chile

Peru

Ecuador

Uruguay

Other

26%

17%

16%

8%

9%

6%

5%

13%

Lending

Payments & remittances

Enterprise financial management

Crowdfunding

Personal financial management

Insurance

Wealth management

Others

35%

3%1%3%5%

7%

12%

23%

11%

Key­highlights1

ASEAN­FinTech­Network­(AFN)­was­launched­in­November­2017­to­enable­collaboration­and­cooperation­on­FinTech­ecosystem­between­six­participating­nations

Key­highlights

The­region­has­a­higher­mobile­penetration­rate,­with­countries­having­mobile­penetration­rates­above­the­global­average­of­112%.

The­region­has­an­estimated­population­of­406­million­with­nearly­74%­internet­penetration­rate­in­2017.­

Economies­in­Central­and­Eastern­Europe­witnessed­a­buoyant­economic­growth­last­year, driven by a rise in­consumer­demand­and­investment,­which­eventually­lowered­the­unemployment­rates­in­the­region.

CESA

Czech Republic

Russia

Estonia

Lithuania

30

FinTech­ecosystem­playbook

FinTech ecosystem playbook

31

Key­highlights1Key­highlights

Estonia

GDP: US$26.0b | 2017

GDP­growth­(y-o-y):­4.9%GDP­per­capita: US$19,744

Population: 1.3 million

Inflation:­3.7%FDI­inflow­(%­of­GDP):­3.3%Regulatory­sandbox:­No

Czech Republic

GDP: US$217.2b | 2017

GDP­growth­(y-o-y):­4.5%GDP­per­capita:­US$20,504.5

Population:­10.6 million

Inflation:­2.4%FDI­inflow­(%­of­GDP):­4.3%Regulatory­sandbox:­No

Lithuania

GDP: US$47.3b | 2017

GDP­growth­(y-o-y):­3.9%GDP­per­capita:­US$16,992

Population:­2.8 million

Inflation:­3.7%FDI­inflow­(%­of­GDP):­2.3%Regulatory­sandbox:­Yes

Russia

GDP: US$1.6t | 2017

GDP­growth­(y-o-y):­1.5%GDP­per­capita: US$10,951

Population:­144 million

Inflation:­3.7%FDI­inflow­(%­of­GDP):­1.8%Regulatory­sandbox:­Yes

FinTech ecosystem playbook

32

Digital­readiness

Internet users (%) Internet bandwidth (kb/s/user)

Mobile subscriptions (per 100 people)

180.7

210.8

51.9

198.6

145.4 150.9

119.0 157.9Estonia Lithuania

Czech Republic Russia

76.4%76.5%74.4%87.2%

Financial­parameters

Banking penetration (%)

Made or received digital payments in the past year (% age 15+ years of population)

Debit card ownership (%)

92%

75% 57%

56%

Credit card ownership (%)

29% 16%

20%25%

76%81%83%98%

97% 78% 80% 71%

Estonia Lithuania

Czech Republic Russia

Sources: 1.­ Digital­in­2018­report,­Hootsuite,­January­

2018

2.­ Gross­Domestic­Product­(GDP),­GDP­per­capita,­population­and­inflation:­Oxford­

Economics­

3.­ FDI­inflow­and­Mobile­Subscriptions:­World­Bank­Open­Data

4.­ Internet­users­and­internet­bandwidth:­The­

Global­Competitiveness­Report­2017–2018,­World­Economic­Forum

5.­ Financial­Parameters:­The­Global­Findex­Database,­World­Bank

33

FinTech­ecosystem­playbook

Estonia• Estonia­has­a­strong­reputation­

for­being­a­digital­economy.­The­country­boasts­of­much-lauded­e-residency­program­that­includes­the­e-identity­program­and­e-Estonia­state­portal:

• Under­the­program,­the­Government­issues­a­digital­identity­that­allows­entrepreneurs­to­set­up­and­run­a­location­independent­business.­Businesses­can­quickly­set­up­their­presence­in­the­country­(in­15­minutes).­

• E-residents­can­start­a­company­online,­access­banking­and­online­payment­service­providers­(PSPs),­manage­company­remotely.­

• Estonia­launched­the­e-Residency­program­in­2015,­and­its­e-residents­have­since­grown­to­approximately­40,000­people­from­150­countries­as­of­June­2018.­

• Estonia­has­developed­one­of­the­most­liberal­tax­systems­with­a­0%­corporate­income­tax­on­companies­without­dividends.

• In­2015,­the­Estonian­government­established­‘Startup­Estonia’­to­strengthen­the­Estonian­startup­ecosystem,­carry­out­training­programs­for­startups,­educate­local­investors­whilst­attract­

foreign­investors,­and­eliminate­regulative­issues­and­barriers.

• The­country­has­a­Start-up­Visa­program­that­enables­non-­EU­residents­to­work­for­Estonia’s­start-ups.­

Lithuania• Lithuania­positions­itself­as­the­

entry­point­for­FinTech­companies­to­the­EU.­The­country­has­taken­measures­to­create­a­conducive­environment­for­the­development­of­its­FinTech­industry.­A­fast­digital­payment­or­e-money­license­(in­about­3­to­4­months),­easy­licensing­for­P2P­lending­platforms­and­crowdfunding­laws­are­some­of­the­key­initiatives­by­the­Government.

• In­July­2018,­the­Bank­of­Lithuania­introduced­a­procedure­that­allows­companies­to­apply­remotely­and­online­for­FinTech­licenses.

• Lithuania­offers­a­specialized­banking­license­that­allows­to­establish­a­bank­with­a­registered­capital­of­only­€1m.

• In­January­2018,­the­Bank­of­Lithuania­announced­that­it­will­be­launching­a­blockchain­sandbox­platform­for­domestic­and­foreign­companies.­The­platform,­called­LBChain,­will­allow­FinTechs­to­develop­and­test­out­blockchain-based­solutions.­

Success storiesSuccess stories

• For­FinTechs,­special­support­and­advice­systems­are­provided­for­their­first­year­of­operations.­Non-banking­institutions­are­given­access­to­CENTROlink,­the­payment­system­operated­by­the­Central­Bank­of­Lithuania,­and­thus­can­execute­payments­in­the­EU’s­Single­Euro­Payment­Area.­

Czech Republic

• Government­agency­Czech­ICT­Alliance­set­up­the­Prague­Startup­Centre­in­2016­to­help­early-stage­start-ups­connect­with­investors­and­partners.­Services­include­an­incubation­program­for­university­students­and­early-stage­start-ups,­offices­in­Prague­downtown,­various­trainings­and­workshops­for­start-ups,­and­networking­events.

• In­January­2017,­Czech­Republic­starting­January­1,­2017,­introduced­the­law­against­money­laundering.­The­law­prepared­by­the­Ministry­of­Finance­of­the­Czech­Republic­requires­virtual­currency­exchanges­to­determine­the­identity­of­customers.

Russia• In­April­2016,­The­Central­

Bank­of­the­Russian­Federation­created­a­dedicated­department­—­Department­Of­Financial­Technologies,­Projects­and­Process­Organization­—­to­monitor,­analyze­and­evaluate­the­scope­of­the­emerging­FinTech­sector.­

• In­early­2018,­the­central­bank­published­a­document­setting­guidelines­for­the­development­of­financial­technologies­from­2018­to­2020.­

• In­April­2018,­the­central­bank­introduced­a­regulatory­sandbox­to­serve­as­a­platform­for­modeling­the­processes­of­the­use­and­application­of­innovative­financial­services.­

• The­government-funded­Internet­Initiatives­Development­Fund­(IIDF)­has­$100M­(6bn­RUB)­under­its­management­as­of­August­2018.­

• From­2013­to­August­2018,­IIDF­had­closed­370­deals­with­values­ranging­from­$20k­to­$5.5M

34

FinTech­ecosystem­playbook

Key­highlights

Gulf­Cooperation­Council­(GCC)­economies­in­the­region­are­undertaking­reforms­to­promote­growth­in­the­non-oil­sector­and­investing­in­infrastructure­development­to­push­economic­growth­in­the­region.

The­region­has­an­estimated­population­of­253­million­in­2018­with­overall­internet­penetration­of­65%­in­2017.­The­region­has­mobile­penetration­rate­of­128%­.­However,­internet­penetration­rate­is­fragmented­across­the­region.­

The Middle East

Bahrain

GDP: US$36.7b | 2017

GDP­growth­(y-o-y):­4.0%GDP­per­capita:­US$26,820

Population: 1.4 million

Inflation: 1.4%FDI­inflow­(%­of­GDP):­1.5%Regulatory­sandbox:­Yes

Bahrain

Saudi Arabia UAE

Turkey

35

FinTech­ecosystem­playbook

FinTech ecosystem playbook

36

Turkey

GDP: US$851.3b | 2017

GDP­growth­(y-o-y):­7.3%GDP­per­capita:­US$10,527

Population:­80.8 million

Inflation:­11.1%FDI­inflow­(%­of­GDP):­1.3%Regulatory­sandbox:­No

Saudi Arabia

GDP:(1) US$686.7b | 2017

GDP­growth­(y-o-y):­-0.9%GDP­per­capita:­US$20,926

Population:­32.8 million

Inflation:­-0.9%FDI­inflow­(%­of­GDP):­1.2%*Regulatory­sandbox:­Yes (capital markets)

UAE

GDP: US$382.6b | 2017

GDP­growth­(y-o-y):­0.8%GDP­per­capita: US$40,622

Population: 9.4 million

Inflation:­2.0%FDI­inflow­(%­of­GDP):­2.5%*Regulatory­sandbox:­Yes (Dubai and Abu Dhabi)

FinTech ecosystem playbook

37

Sources:

1.­ Digital­in­2018­report,­Hootsuite,­January­2018

2.­ Gross­Domestic­Product­(GDP),­GDP­per­capita,­population­and­inflation:­Oxford­Economics­

3.­ FDI­inflow­and­Mobile­Subscriptions:­World­Bank­Open­Data

4.­ Internet­users­and­internet­bandwidth:­The­Global­

Competitiveness­Report­2017–2018,­World­Economic­Forum

5.­ Financial­Parameters:­The­Global­Findex­Database,­World­Bank

Note: * 2017 FDI inflow figures not available. Considered 2016 figures instead.

Financial­parameters

Bahrain Saudi Arabia

Turkey UAE

Banking penetration (%) Debit card ownership (%)

80

63 83

67

Credit card ownership (%)

30 16

4542

Made or received digital payments in the past year (% age 15+ years of population)

77 61 64 84

88.2%68.6%71.7%98.6%

Digital­readiness

Internet users (%)

Bahrain Saudi Arabia

Turkey UAE

90.6%58.3%73.8%98.0%

Mobile subscriptions (per 100 people)

158.4 122.1

210.996.4

Internet bandwidth (kb/s/user)

68.1 133.7

112.8 78.2

United Arab Emirates

Dubai• Established­in­2004,­DIFC­is­a­

major­financial­hub­in­the­MEASA­region.­It­has­an­independent­regulator­and­judicial­system,­and­a­global­financial­exchange.­The­financial­district­has­2,003­active­registered­companies­operating­with­a­combined­workforce­of­22,768.

• DIFC­established­FinTech­Hive,­an­accelerator­that­aims­to­bring­financial­and­technology­firms­together.­It­offers­licensing­solutions­for­FinTechs­and­supportive­regulation­through­its­Innovation­Testing­Licence.­It­also­offers­dedicated­commercial­license,­specifically­developed­for­FinTech,­RegTech­and­InsurTech­firms­to­operate­within­the­center.

• DIFC­launched­a­US$100m­FinTech-focused­fund­to­accelerate­the­development­in­financial­technology­by­investing­in­start-ups,­from­incubation­to­growth­stage.

• It­launched­The­Academy,­an­executive­education­center,­in­2017.­Formed­in­partnership­with­leading­business­schools,­The­Academy­provides­access­to­financial­services­courses.

• In­August­2017,­the­Dubai­Financial­Services­Authority­(DFSA),­launched­its­regulatory­

framework­for­loan-­and­investment-based­crowdfunding­platforms.

Abu­Dhabi• ADGM­was­founded­in­2013.­

It­comprises­three­independent­authorities:­ADGM­Courts,­the­Financial­Services­Regulatory­Authority­and­the­Registration­Authority.

• ADGM­has­introduced­several­initiatives­and­programs­to­support­the­country’s­FinTech­ecosystem.­It­has­a­regulatory­sandbox­program­and­is­part­of­GFIN.

• In­October­2017,­ADGM­launched­the­FinTech­Innovation­Centre,­a­co-working­space­for­FinTechs,­and­entered­into­partnership­with­Plug­and­Play,­a­global­accelerator­program­to­support­financial­innovation.

• In­September­2018,­ADGM­launched­a­regulatory­framework­for­private­financing­platforms­that­enable­enterprises­to­seek­financing­from­private­and­institutional­investors­to­launch­and­grow­their­businesses.

• FinTech-specific­courses­were­launched­by­ADGM­Academy­in­May­2018.­The­academy­is­partnering­with­educational­institutions­for­a­range­of­programs­on­banking­and­finance,­personal­and­professional­development,­entrepreneurship,­and­national­development.

Success storiesSuccess stories

38

FinTech­ecosystem­playbook

FinTech ecosystem playbook

39

Bahrain• Bahrain­FinTech­Bay­was­launched­

in­November­2017­with­the­collaboration­of­Bahrain­Economic­Development­Board­(EDB)­and­FTC.

• In­Bahrain,­FinTech­development­is­inspiring­Islamic­finance­institutions­to­adopt­digital.­In­December­2017,­Al­Baraka­Banking­Group,­Kuwait­Finance­House­and­Bahrain­Development­Bank­(BDB)­launched­the­first­global­Islamic­FinTech­consortium,­ALGO­Bahrain.­The­consortium,­which­aims­to­increase­the­adoption­in­FinTech­in­Islamic­banking,­plans­to­launch­15­banking­platforms­by­2022.

• The­Central­Bank­of­Bahrain­has­a­dedicated­FinTech­&­Innovation­Unit­that­aims­to­create­a­supportive­regulatory­environment­to­encourage­investment­in­FinTech.­Developments­include­a­dedicated­license­category­for­conventional­and­Shari’a-compliant­crowdfunding­and­a­regulatory­sandbox.

• In­June­2018,­BDB’s­Al­Waha­Fund­of­Funds­closed­its­US$100m­fundraising­round.­The­fund­will­support­start-ups­in­Bahrain­and­across­MENA­region.

Saudi Arabia• As­part­of­Saudi­Vision­2030,­the­

Saudi­Arabia­Government­has­launched­the­Financial­Sector­Development­program.­Under­the­program,­the­Saudi­Arabian­Monetary­Authority­(SAMA)­shall­

establish­a­central­payment­unit­to­regulate­the­payments­industry.­It­also­plans­to­develop­financial­services­payment­laws­and­regulations­together­with­creating­new­licenses­for­innovative­nonbanking­players.­Additionally,­SAMA­has­laid­out­framework­for­cybersecurity­compliance.­In­May­2018,­SAMA­launched­the­FintechSaudi­initiative­to­support­the­FinTech­development.­

• Capital­Market­Authority­(CMA)­laid­out­the­regulatory­framework­for­the­innovation­of­FinTech­in­capital­market­within­Saudi­Arabia.­FinTechs­also­require­a­permit­that­would­enable­them­to­first­test­their­offerings­in­the­FinTech­Lab.­In­July­2018,­CMA­approved­the­first­two­licenses­for­FinTechs.

Turkey• In­July­2018,­the­Turkish­

Government­set­up­FinTech­Task­Force­with­the­aim­to­improve­the­FinTech­ecosystem­in­the­country­Consisting­of­executives­from­the­Central­Bank­of­the­Republic­of­Turkey,­the­Banking­Regulation­and­Supervision­Agency,­the­Undersecretariat­of­Treasury,­the­Capital­Markets­Board­Turkey,­and­the­Savings­Deposit­Insurance­Fund,­the­task­force­is­setting­a­national­vision­and­goal,­determining­a­strategy­and­a­road­map­for­the­industry.

• In­December­2017,­Turkey­amended­its­Capital­Markets­Act­to­make­crowdfunding­that­offers­a­return­on­investment­(e.g.,­through­shares)­available­in­the­country.­

• The­Interbank­Card­Center,­BKM,­has­also­been­playing­an­active­role­in­supporting­FinTech­in­Turkey.­In­2016,­BKM­introduced­Turkey’s­Payment­Method­(Troy),­an­electronic­card­payment­

system,­in­line­with­its­vision­of­creating­a­cashless­society­by­2023.

Key­highlights

According­to­the­World­Bank,­in­sub-Saharan­Africa,­21%­of­the­adult­population­have­a­mobile­money­account,­which­is­the­highest­in­any­region­in­the­world.­While­mobile­money­has­been­centered­in­East­Africa,­it­has­expanded­to­West­Africa­and­beyond.­

The­region­has­an­estimated­population­of­about­a­billion­in­2018­with­34%­internet­penetration­rate­and­82%­mobile­penetration­rate.­

Global­FinTech­hub­playbook­2018

South Africa

KenyaNigeria

Africa

40

FinTech­ecosystem­playbook

FinTech ecosystem playbook

41

Key­highlights

South Africa

GDP: US$349.3b | 2017

GDP­growth­(y-o-y):­1.3%GDP­per­capita:­US$6,150.6

Population:­56.8 million

Inflation:­5.3%FDI­inflow­(%­of­GDP):­0.4%Regulatory­sandbox:­No

Kenya

GDP: US$74.9b | 2017

GDP­growth­(y-o-y):­4.9%GDP­per­capita:­US$1,506.7

Population:­49.7 million

Inflation:­8.0%FDI­inflow­(%­of­GDP):­0.9%Regulatory­sandbox:­No

Nigeria

GDP: US$355.5b | 2017

GDP­growth­(y-o-y):­0.8%GDP­per­capita: US$1,860

Population: 191.2 million

Inflation:­16.5%FDI­inflow­(%­of­GDP):­0.9%Regulatory­sandbox:­Yes

Digital­readiness

Internet users (%)

Mobile subscriptions (per 100 people)

86.1 75.9 162.0

Internet bandwidth (kb/s/user)

69 11.3 26354.0%25.7%26.0%

Kenya Nigeria South Africa

Financial­parame

Debit card ownership (%)

38 3432

Credit card ownership (%)

6 3 9

Banking penetration (%)

69.2%39.6%81.6%

Financial­parameters

Sources:

1.­ Digital­in­2018­report,­Hootsuite,­January­2018

2.­ Gross­Domestic­Product­(GDP),­GDP­per­capita,­population­and­inflation:­Oxford­Economics­

3.­ FDI­inflow­and­Mobile­Subscriptions:­World­Bank­Open­Data

4.­ Internet­users­and­internet­bandwidth:­The­Global­Competitiveness­Report­2017–2018,­World­Economic­Forum

5.­ Financial­Parameters:­The­Global­Findex­Database,­World­Bank

Made or received digital payments in the past year (% age 15+ years of population)

79 30 60

Kenya Nigeria South Africa

Nigeria• The­Payments­System­Vision­2020­

of­the­Central­Bank­of­Nigeria­(CBN)­identifies­ways­to­increase­the­resilience­of­the­payments­system­infrastructure.­The­sector­is­using­innovations,­such­as­Unstructured­Supplementary­Service­Data­service­(USSD),­for­payments.

• In­March­2018,­CBN,­along­with­Nigeria­Inter-Bank­Settlement­System,­introduced­a­regulatory­sandbox­with­the­aim­to­facilitate­digital­innovation­by­FinTech­companies.­­

Kenya• M-Pesa­is­a­key­driver­behind­

success­of­mobile­banking­in­Kenya,­which­has­helped­alleviate­financial­exclusion.­According­to­the­Global­Findex­Database­2017,­73%­of­adults­in­Kenya­have­a­mobile­money­account.

• The­Central­Bank­of­Kenya­(CBK)­is­the­financial­regulatory­body­in­the­country­and­is­receptive­of­the­FinTech­innovations,­which­is­evident­from­the­measures­it­has­taken.­In­2007,­the­CBK­took­the­pivotal­step­of­allowing­mobile­operator,­Safaricom,­to­launch­M-Pesa­when­there­was­no­regulatory­framework­set­up.­­

South Africa• In­February­2018,­SARB­

established­a­FinTech­program­that­aims­to­strategically­assess­the­emergence­of­FinTech­and­consider­its­regulatory­implications.­It­has­three­primary­objectives:­evaluating­private­cryptocurrencies,­investigating­innovation­facilitators­(sandboxes,­incubators­and­accelerators)­and­launching­a­DLT­experiment­(Project­Khoka).

• In­June­2018,­SARB­released­a­report­on­the­Project­Khoka,­a­PoC­designed­to­simulate­a­real-world­trial­of­a­DLT-based­wholesale­payment­system.

Success storiesSuccess stories

42

FinTech­ecosystem­playbook

FinTech ecosystem playbook

43

FinTech­landscape­in­sub-Saharan­Africa

Breakup of total FinTech funding for 2016-17: US$100m

Distribution of FinTechs

34%

34%

32%94

74

56

76

Source: Finnovating for Africa: Exploring the African Fintech Startup Ecosystem Report 2017, Disrupt Africa

South Africa Nigeria

Kenya Rest of Africa

South Korea

GDP: US$1.5t | 2017

GDP­growth­(y-o-y):­3.1%GDP­per­capita:­US$30,008

Population: 51.0 million

Inflation: 1.9%FDI­inflow­(%­of­GDP):­1.1%Regulatory­sandbox:­Yes

Most­of­the­hubs­are­encouraging­digital­payment­initiatives­and­working­toward­financial­inclusion.­

The­region­has­an­estimated­population­of­about­3.6­billion­in­2018.­Asia-Pacific­has­about­2­billion­internet­users,­which­is­about­51%­of­the­total­world­internet­users.­The­region­has­a­48%­internet­penetration­rate,­and­102%­mobile­penetration­rate.

Key­highlights

Asia-Pacific

44

Hong Kong

India

Japan

South KoreaChina

FinTech­ecosystem­playbook

FinTech ecosystem playbook

45

Hong Kong

GDP: US$341.4b | 2017

GDP­growth­(y-o-y):­3.8%GDP­per­capita:­US$46,307.6

Population:­7.4 million

Inflation:­1.5%FDI­inflow­(%­of­GDP):­35.8%Regulatory­sandbox:­Yes

Japan

GDP: US$4.9t | 2017

GDP­growth­(y-o-y):­1.7%GDP­per­capita:­US$38,255

Population:­127.4 million

Inflation:­0.5%FDI­inflow­(%­of­GDP):­0.4%Regulatory­sandbox:­Yes (FinTech Proof of Concept Hub)

India

GDP: US$2.5t | 2017

GDP­growth­(y-o-y):­6.2%GDP­per­capita:­US$1,870

Population:­1.3 billion

Inflation:­3.3%FDI­inflow­(%­of­GDP):­1.5%Regulatory­sandbox:­No

Mainland China

GDP: US$12.3t | 2017

GDP­growth­(y-o-y):­6.9%GDP­per­capita: US$8,697

Population: 1.4 billion

Inflation:­1.5%FDI­inflow­(%­of­GDP):­1.4%Regulatory­sandbox:­No

FinTech ecosystem playbook

46

Digital­readiness

Internet users (%) Internet bandwidth (kb/s/user)

Mobile subscriptions (per 100 people)

83.0 54.3

14.7 4906.0 16.0

104.6 249.0 87.3

124.9133.5

India Japan South Korea

Mainland China Hong Kong

92.7%92.0%29.5%87.3%53.2%

Financial­parameters

Banking penetration (%) Credit card ownership (%)

21

3 68

64

65

Debit card ownership (%)

67 83

75

8733

Sources: 1.­ Digital­in­2018­report,­Hootsuite,­January­2018

2.­ Gross­Domestic­Product­(GDP),­GDP­per­capita,­population­and­inflation:­Oxford­Economics­

3.­ FDI­inflow­and­Mobile­Subscriptions:­World­Bank­Open­Data

4.­ Internet­users­and­internet­bandwidth:­The­Global­Competitiveness­Report­2017–2018,­World­Economic­Forum

5.­ Financial­Parameters:­The­Global­Findex­Database,­World­Bank

Made or received digital payments in the past year (% age 15+ years of population)

95 92

68 85 29

94.8%98.2%79.9%95.3%80.2%

Hong Kong India Japan South KoreaMainland China

FinTech ecosystem playbook

47

Hong Kong• Hong­Kong­has­taken­a­number­of­

steps­to­strengthen­FinTech­sector.­In­March­2016,­HKMA­established­the­FinTech­Facilitation­Office­(FFO)­to­support­the­development­of­the­ecosystem.

• The­HKMA­has­launched­seven­smart­banking­initiatives,­which­include­the­following:

• Faster­Payment­System­(FPS):­Launched­in­September­2018,­the­new­system­operates­on­a­round-the-clock­basis,­and­connects­banks­and­stored-value­facility­(SVF)­operators­on­the­same­platform.

• Open­API:­In­July­2018,­Open­API­Framework­for­the­Hong­Kong’s­banking­sector­was­released.

• Enhanced­Fintech­Supervisory­Sandbox­(FSS)­2.0:­As­of­the­end­of­July­2018,­33­new­technology­products­have­been­tested­in­the­FSS.­Separately,­banks­have­collaborated­with­tech­firms­in­18­trial­cases.­

• Virtual­banking:­In­September­2017,­the­HKMA­announced­its­intention­to­encourage­virtual­banking­in­Hong­Kong.­

• Closer­cross-border­collaboration:­The­latest­initiatives­include­the­development­of­a­DLT­platform­to­digitalize­banks’­trade­finance­processes­in­Hong­Kong­with­potential­connectivity­with­Singapore’s­trade­platform.­

• Research­and­talent­development:­HKMA­has­collaborated­with­the­Hong­Kong­Applied­Science­and­Technology­Research­Institute,­Science­Park­and­Cyberport­in­a­number­of­research­and­education­initiatives.

• Banking­Made­Easy­Initiative­—­Aim­is­to­minimize­regulatory­frictions­in­customers’­digital­experience,­including­remote­onboarding,­online­finance­and­online­wealth­management

• The­Hong­Kong­government’s­2018­budget­has­pledged­HK$500m­to­the­development­of­financial­services­over­the­next­five­years,­including­FinTech.

• In­2017,­the­Government­launched­US$256m­(HK$2b)­Innovation­and­Technology­Venture­Fund­to­coinvest­with­private­VC­in­local­tech-based­start-ups.

• With­specific­focus­to­expand­FinTech-based­talent­in­Hong­Kong,­HKMA­partnered­with­ASTRI­to­launch­FCAS,­providing­internship­to­undergraduates­and­postgraduate­students­in­the­FinTech­industry.­HKMA­also­runs­a­talent­accelerator­program.

Success storiesSuccess stories

FinTech ecosystem playbook

48

• The­Hong­Kong­FinTech­Week­is­a­cross­border­event­(from­29­October­to­2­November­2018)­took­place­in­the­Hong­Kong­and­Shenzhen.­Over­8,000­participants­attended­the­event.

India• The­Government,­through­its­

Digital­India­initiative,­has­taken­a­number­of­steps­to­drive­digital­penetration­in­the­country.­The­following­initiatives­have­resulted­in­increase­in­banking­penetration­rate­to­80%­in­2017­from­mere­35%­in­2011:

• Aadhaar,­the­largest­biometric­program­in­the­world,­had­generated­over­1.2­billion­digital­identities.­As­of­15­September­2018,­over­23­billion­authentications­and­6.2­billion­e-KYC­have­been­done­using­Aadhaar­(UIDAI­stats).

• Jan­Dhan­Yojna,­one­of­the­largest­financial­inclusion­programs­in­the­world,­was­launched­by­the­Government­in­2015,­has­over­327­million­beneficiaries­as­of­19­September­2018.­

• United­Payments­Interface­(UPI),­an­instant­real-time­payment­system­through­bank­account,­was­launched­in­2016.­In­August­2018,­UPI­crossed­an­important­milestone­of­300­million­transactions­in­a­month.

• In­August­2016,­the­Government­launched­Bharat­BillPay­(BBP),­an­interoperable­payment­platform,­which­allows­users­to­make­bill­payments­across­multiple­channels­and­payment­modes,­and­provides­instant­receipts­through­SMS.

• In­March­2017,­the­Government­

launched­Bharat­QR,­a­common­interoperable­quick­response­(QR)­code.

Japan• In­Japan,­projects­are­being­

undertaken­to­develop­platforms­using­contactless­technology,­QR­codes,­blockchain­technology­and­digital­currencies.­In­April­2018,­the­Ministry­of­Economy,­Trade­and­Industry­set­a­target­to­have­40%­of­all­transactions­to­be­done­cashless­by­2025,­up­from­18.4%­in­2015.

• The­Financial­Services­Agency­the­Japanese­financial­regulator,­established­FinTech­Support­Desk­in­2015­to­support­FinTechs­with­the­specific­interpretation­of­banking­laws­for­them­or­the­applicability­of­regulations­to­FinTech­business­prior­to­launch.

• As­of­March­2018,­16­crypto-exchanges­were­registered­under­FSA­and­another­16­were­still­being­examined­for­registration.

• In­September­2017,­FSA­announced­the­establishment­of­the­PoC­Hub,­a­regulatory­sandbox.­

Mainland China

• Mainland­China­is­home­to­large­FinTech­companies­in­payments,­P2P­lending,­InsurTech,­which­have­disrupted­the­way­financial­services­are­consumed.

• In­January­2017,­Asia­FinTech­Fund­of­Funds­worth­US$1.4b­was­founded­by­state-owned­capital­

and­private­funds­to­nurture­start-ups­in­the­FinTech­industry.

• In­April­2018,­the­XiongAn­Global­Blockchain­Innovation­Fund­was­launched­with­US$1.6b­to­invest­in­Chinese­blockchain­start-ups.­In­July­2018,­China­Merchants­Group­partnered­with­London-based­investment­firm­Centricus­to­launch­a­US$15b­technology­fund­called­New­Era­Technology­Fund.

South Korea• Tech­giants­in­the­country­have­

pioneered­FinTech­adoption­by­providing­payment­solutions­as­well­as­setting­up­digital-only­banks­that­have­acquired­millions­of­users­so­far.

• In­2016,­the­FSC­launched­a­Fintech­Open­Platform.­The­Open­API­system­within­Fintech­Open­Platform­that­provides­program­commands­needed­when­programming­FinTech­services­with­banking­functions.

• The­regulatory­environment­regarding­cryptocurrency­is­moving­toward­more­transparency.­Starting­January­2018,­cryptocurrency­traders­in­South­Korea­will­not­be­allowed­to­make­deposits­into­their­virtual­currency­exchange­wallets­unless­the­names­on­their­bank­accounts­match­the­account­names­in­cryptocurrency­exchanges.

49

FinTech­ecosystem­playbook

Appendix

ASEAN• Singapore

• “MAS­sets­up­new­FinTech;­Innovation­Group,”­Monetary Authority of Singapore website, http://www.mas.gov.sg/news-and-publications/media-releases/2015/mas-sets-up-new-fintech-and-innovation-group.aspx,­accessed­on­15­October­2018.

• “Singapore’s­FinTech­Journey­—­Where­We­Are,­What­Is­Next”­-­Speech­by­Mr­Ravi­Menon,­Managing­Director,­Monetary­Authority­of­Singapore,­at­Singapore­FinTech­Festival­-­FinTech­Conference­on­16­November­2016,”­Monetary Authority of Singapore website, accessed­on­15­October­2018.

• “Singapore­Fintech:­Top­Influencers,”­finews.asia,­23­July­2018.

• “FinTech­Fast­Track­(FTFT),”­Singapore FinTech Association website,­https://singaporefintech.org/fintech-fast-track/,­accessed­on­15­October­2018.

• “Home,”­Singapore FinTech Association website,­https://singaporefintech.org/,­accessed­on­15­October­2018.­

• Malaysia

• “List­of­Registered­Market­Operators”,­Securities Commission Malaysia website, https://www.sc.com.my/digital/list_rmo/,­accessed­on­18­September­2018

• “Equity­Crowdfunding”,­Securities Commission Malaysia website,­https://www.sc.com.my/digital/equity-crowdfunding/,­accessed­on­18­September­2018

• “Implementation­Guidance­on­e-KYC­by­MSB­Industry”,­Bank­Negara­Malaysia,­http://www.bnm.gov.my,­accessed­on­18­September­2018

• Indonesia

• “OJK­SETS­UP­FINTECH­ADVISORY­FORUM”,­OJK website,­https://www.ojk.go.id/en/berita-dan-kegiatan/siaran-pers/Documents/Pages/Press-Release-OJK-Sets-Up-Fintech-Advisory-Forum,­accessed­on­18­September­2018

• Thailand

• “SEC­releases­crypto­details­”,­Bangkok Post website,­https://www.bangkokpost.com/business/news/1481525/sec-releases-crypto-details,­accessed­on­18­September­2018

• “The­state­of­ICO­regulation­in­Thailand”,­Bangkok Post website,­https://www.bangkokpost.com/business/news/1510938/the-state-of-ico-regulation-in-Thailand,­accessed­on­18­September­2018

• Vietnam

• “Non-cash­payment­performance­gained­significant­improvement,”­State Bank of Vietnam website,­https://www.sbv.gov.vn/webcenter/portal/

en/home/sbv/news,­accessed­5­January­2017.

• “SBV­establishes­Steering­Committee­on­Fintech”,­State Bank of Vietnam website, https://www.sbv.gov.vn/webcenter/portal/en/home/sbv/news/news,­accessed­on­18­September­2018

• First-ever­Fintech­Challenge­Vietnam­launched,”­Vietnam­Economic­Times,­http://vneconomictimes.com/article/business/first-ever-fintech-challenge-vietnam-launched,­accessed­5­January­2017.

• Philippines

• “BSP­and­Industry­Launches­the­National­Retail­Payment­System”,­Bangko Sentral ng Pilipinas website,­http://www.bsp.gov.ph/publications/media.asp?id=3948,­accessed­on­18­September­2018

• “Thrive­Not­Just­Survive”,­Bangko Sentral ng Pilipinas website,­http://www.bsp.gov.ph/publications/speeches.asp?id=606,­accessed­on­18­September­2018

• Cambodia

• “Fintech­could­be­‘game­changer’,”­The­Phnom­Penh­Post,­28­July­2017

Latin America• Brazil

• “Brazil’s­Central­Bank­authorizes­peer-to-peer­lending­P2p­lending”,­Reuters, https://www.reuters.com/

FinTech ecosystem playbook

50

article/brazil-credit-fintechs/brazils-central-bank-authorizes-peer-to-peer-lending-idUSL1N1S32Y6,­accessed­on­18­September­2018

• CVM­creates­a­FinTech­Hub,­CVM,­http://www.cvm.gov.br/noticias/arquivos/2016/20160613-1-1.html,­accessed­on­18­September­2018

• Mexico

• “Mexico­Passes­New­Fintech­Law­as­Sector­Surges,”­Mexico Business Blog website,­bdp-americas.com/blog/2018/04/18/mexico-passes-new-fintech-law-as-sector-surges/,­accessed­on­27­September­2018.

CESA• Estonia:

• “e-residency,”­e-Estonia website,­https://e-estonia.com/solutions/e-identity/e-residency/,­accessed­on­15­October­2018

• “e-identity,”­e-Estonia website, https://e-estonia.com/category/e-identity/,­accessed­on­15­October­2018

• “e-governance,”­e-Estonia website,­https://e-estonia.com/solutions/e-governance/state-e-services-portal/,­accessed­on­15­October­2018

• “ESTONIA:­“IT­TAKES­15­MINUTES­TO­SET­UP­A­COMPANY­ON­THE­INTERNET”,”­L’Atelier BNP Paribas website, https://atelier.bnpparibas/en/smart-city/article/estonia-it-takes-15-minutes-set-company-internet,­accessed­on­15­October­2018

• “e-Estonia:­What­is­all­the­fuss­about?,”­ZDNet website,

https://www.zdnet.com/article/e-estonia-what-is-all-the-fuss-about/,­accessed­on­15­October­2018

• “About,”­Startup­Estonia­website,­https://startupestonia.ee/about,­accessed­on­27­September­2018

• Lithuania:

• “Key­Sectors­—­FinTech,”­Go Vilnius website,­http://www.govilnius.lt/business/key-business-sectors-vilnius/fintech/,­accessed­on­15­October­2018

• “Bank­of­Lithuania­introduces­remote­Fintech­licensing”,­Invest Lithuania website, https://investlithuania.com/news/lithuania-introduces-remote-fintech-licensing-making-the-prime-destination-for-fintech-even-better/,­accessed­on­15­October­2018.

• “The­Bank­of­Lithuania­to­launch­blockchain­sandbox­platform-service”­Invest Lithuania website,­https://investlithuania.com/news/the-bank-of-lithuania-to-launch-blockchain-sandbox-platform-service/,­accessed­27­September­2018.

• Czech Republic:

• “Home,”­Prague Startup Centre website,­http://en.praguestartupcentre.cz/,­accessed­on­15­October­2018.

• “CZECH­REPUBLIC:­Major­New­Immigration­Law­Includes­New­EU­Intra-Company­Transfer­Card,”­Newland Chase website,­https//newlandchase.com/immigration-insights/latest-news/czech-republic-major-new-immigration-law-includes-new-eu-intra-company-transfer-card/,­accessed­on­15­October­2018.

• “Czech­Republic­Introduces­Law­Regulating­(Restricting)­Bitcoin,”­CNN, 31 January 2017.

• Russia:

• “Russia’s­c-bank­launches­regulatory­sandbox”,­Finance feeds website,­https://financefeeds.com/russias-c-bank-launches-regulatory-sandbox/,­accessed­on­20­September­2018

• “Russian­Central­Bank­Sets­Guidelines­for­Fintech­Development,­Aims­at­Competition­and­Accessibility­—­IBS Intelligence,” IBS Intelligence website,­accessed­on­27­September­2018.

• “Home,”­IIDF website,­https://www.iidf.ru/,­accessed­on­27­September­2018

The Middle East• UAE

• Dubai:

• “Home”,­Dubai International Financial Center website, https://www.difc.ae/,­accessed­on­30­August­2018

• “Home,”­FinTech Hive website,­https://fintechhive.difc.ae/,­accessed­on­15­October­2018.

• “DFSA­launches­Crowdfunding­Framework,”­Dubai Financial Services Authority website,­https://www.dfsa.ae/MediaRelease/News/DFSA-launches-Crowdfunding-Framework,­accessed­on­27­September­2018.

• Abu Dhabi:

• “Home”,­Abu Dhabi Global Market website,­https://www.adgm.com/,­accessed­

51

on­20­September­2018.

• “Home,”­ADGM Academy website,­https://www.adgmacademy.com/,­accessed­on­27­September­2018

• “Home,”­Emirates Digital Wallet website,­http://www.edw.ae/,­accessed­on­15­October­2018.

• Bahrain

• “Home”,­Bahrain FinTech Bay website,­https://www.bahrainfintechbay.com/,­accessed­on­10­September­2018.

• “Bahrain­launches­a­new­Research­and­Development­FinTech­firm!,”­Startup Bahrain website,­http://startupbahrain.com/newsfeatures/bahrain-launches-new-research-development-fintech-firm/,­accessed­on­15­October­2018.

• “Worlds­First­Fintech­Consortium­of­Islamic­Banks­Announced­By­Bahrain,”­Albaraka website,­https://www.albaraka.com/default.asp?action=article&id=644,­accessed­on­15­October­2018.

• “BDB­closes­$100m­VC­fund,”­Arab News,­http://www.arabnews.com/node/1328086/corporate-news,­26­June­2018.

• Saudi Arabia:

• “Home”,­Capital Market Authority website,­https://cma.org.sa/en/Pages/default.aspx,­accessed­on­27­September­2018.

• “Home”,­Saudi Arabian Monetary Authority website, http://www.sama.gov.sa/en-US/Pages/default.aspx,­accessed­on­27­September­2018.

• “Financial­Sector­Development­Program”,­Saudi Vision 2030 website,­http://vision2030.gov.sa/en/FSDP,­accessed­15­October­2018.

• Turkey:

• “Home”,­FinTech Istanbul website,­http://fintech.istanbul/en/,­accessed­on­15­October­2018.

• “Turkey­Launches­its­First­Fintech­Task­Force,”­The FinTech Times,­23­July­2018.

• “EUROPE:­The­New­Age­Of­Turkey’s­Payments,”­PYMNTS website,­https://www.pymnts.com/news/payment-methods/2015/the-new-age-of-turkeys-payments/,­accessed­on­15­October­2018.

Africa• South Africa:

• “Media­statement,”­South African Reserve Bank (SARB), 13­February­2018

• “The­South­African­Reserve­Bank­releases­the­Project­Khokha­report,”­South African Reserve Bank (SARB),­20­June­2018.

• Nigeria:

• “Payments­System­Vision­2020,”­Central Bank of Nigeria, September­2013.

• “Financial­Inclusion­Newsletter,”­Central Bank of Nigeria,­March­2018.

• Kenya:

• “The­Rise­of­Mobile­Mobile­and­Mobile­Savings­in­Kenya,”­World Bank Group,­2011.

• “Home,”­Central Bank of Kenya website,­https://www.centralbank.go.ke/,­accessed­

on­15­October­2018.

• “News­&­Publications,”­Capital Markets Authority website, accessed­on­15­October­2018.

Asia-Pacific• Hong Kong

• “A­New­Era­of­Smart­Banking”,­HKMA website,­https://www.hkma.gov.hk/eng/key-information/press-releases/2017/20170929-3.shtml,­accessed­on­15­September­2018

• “About­us,”­Hong Kong Monetary Authority website, https://ffo.hkma.gov.hk/about,­accessed­on­15­October­2018

• “Hong­Kong­Pushes­Fintech­Innovation,”­FinTechnews.hk, published­7­March­2018

• “Innovation­and­Technology­Venture­Fund­opens­for­application­by­venture­capital­funds,”­GovHK website, https://www.info.gov.hk/gia/general/201709/15/P2017091400760.htm,­accessed­on­15­October­2018

• “HKMA­launches­Fintech­Career­Accelerator­Scheme­2.0­with­its­strategic­partners,”­Hong Kong Monetary Authority website, https://www.hkma.gov.hk/eng/key-information/press-releases/2018/20180131-8.shtml,­accessed­on­15­October­2018

• “Events­Page,“­FinTechHK website,­http://www.hongkong-fintech.hk/en/events/,­accessed­on­15­September­2018

• India

• “Aadhaar­Dashboard”,­Aadhaar website,­https://uidai.gov.in/aadhaar_dashboard/,­accessed­on­15­September­2018­

FinTech­ecosystem­playbook

FinTech ecosystem playbook

52

• “Jan­Dhan­Yojna”,­Pradhan Mantri Jan Dhan Yojana website,­https://www.pmjdy.gov.in/account,­accessed­on­20­September­2018

• “Home,”­United Payments Interface website,­http://cashlessindia.gov.in/upi.html,­accessed­on­15­September­2018

• “About­Us,”­Bharat BillPay website,­https://www.bharatbillpay.com/aboutus.php,­accessed­on­15­October­2018

• “Bharat­QR­Code,”­Ministry of electronics & Information Technology website,­http://meity.gov.in/bharat-qr-code,­accessed­on­15­October­2018

• Japan:

• “Banks­Rush­to­Turn­Japan­Cashless­before­Legal­Change­Attracts­Tech­Giants.”­The Japan Times website, www.japantimes.co.jp/news/2018/04/05/business/banks-rush-turn-japan-cashless-legal-change-attracts-tech-giants/#.Wwz1zkiFOUk,­accessed­on­27­September­2018.

• “Industry­ministry­report­urges­Japan­to­shed­custom­of­cash­dependence”,­The Japan Times website,­https://www.japantimes.co.jp/news/2018/04/11/business/industry-ministry-report-urges-japan-shed-custom-cash-dependence/#.W6yn5mgzaM8,­accessed­on­27­September­2018

• FinTech­Support­Desk,­Financial Services Agency,­https://www.fsa.go.jp/news/27/sonota/20151214-2.html,­accessed­on­27­September­2018

• “Establishment­of­FinTech­Proof­of­Concept­Hub”,­Financial

Services Agency,­https://www.fsa.go.jp/en/newsletter/weekly2017/262.html,­accessed­on­27­September­2018

• Mainland China

• “China­launches­mega­$1.44b­Asia­FinTech­M&A­Fund­of­Funds”,­Deal Street Asia Website,­https://www.dealstreetasia.com/stories/china-launches-1-44-bn-asia-fintech-fund-of-funds-for-asian-fintech-mas-61848/,­accessed­on­15­September­2018

• “Hangzhou­Sets­Up­$1.6B­Government-backed­Blockchain­Fund­To­Invest­In­Start-ups”,­China Money Network,­https://www.chinamoneynetwork.com/2018/04/10/hangzhou-sets-up-1-6b-government-backed-blockchain-fund-to-invest-in-start-ups,­accessed­on­15­September­2018

• South Korea

• “Asia:­Regulating­digital-only­banks­in­South­Korea”,­Rfi Group website,­https://www.rfigroup.com/global-retail-banker/news/asia-regulating-digital-only-banks-south-korea,­accessed­on­16­October­2018

• “Korea­Financial­Authority­Strengthen­Ties­With­Singapore­as­Fintechs­Eye­Global­Expansion,”­Fintech News website,­http://fintechnews.sg/3300/fintech/korea-financial-authority-strengthen-ties-singapore-fintechs-eye-global-expansion/,­accessed­in­27­September­2018.

• “S.­Korea­opens­special­fintech­platform,”­Yonhap News Agency website,­http://english.yonhapnews.co.kr/news/2016/08/30/0200000000AEN20160830006000320.html,­accessed­on­27­September­

2018.

• “South­Korea­to­Ban­Cryptocurrency­Traders­from­Using­Anonymous­Bank...”­Reuters website,­Thomson­Reuters,­23­Jan.­2018,­www.reuters.com/article/us-southkorea-bitcoin/south-korea-to-ban-cryptocurrency-traders-from-using-anonymous-bank-accounts-idUSKBN1FC069,­accessed­on­27­September­2018.

53

Contacts

Jan BellensEY­Global­Banking­&­Capital­Markets­Deputy­Sector­Leaderjan.bellens@sg.ey.com

Imran Gulamhuseinwala EY­Global­FinTech­Leaderigulamhuseinwala@uk.ey.com

Charlie AlexanderEY­Global­Transaction­Advisory­Services­Leader­—­Banking­Capital­Markets­Sectorcpalexander@uk.ey.com

Varun MittalEY­Global­Emerging­Markets­FinTech­Leadervarun.mittal@sg.ey.com

Global­contacts

Matt HatchEY­Americas­FinTech­and­Financial­Services­Growth­Markets­Leadermatthew.hatch@ey.com

Spyros Zachariadis EY­Central,­Eastern,­Southern­Europe­FinTechspyros.zachariadis@gr.ey.com

Rana SanyouraEY­Middle­East­&­North­Africa­FinTech­Leaderrana.sanyoura@lb.ey.com

Rachael LowProgram­Leader,­EY­Asia-Pacific­Financial­Services­Brand,­Marketing­&­Communicationsrachael.low@sg.ey.com­

James LloydEY­Asia-Pacific­FinTech­&­Payments­Leaderjames.lloyd@hk.ey.com

Rocio Velazco-RotemLatin­America­FinTech­rocio.velazcorotem@ey.com

Mahesh Makhija Digital­and­Emerging­Technology­Leader,­Indiamahesh.makhija@in.ey.com­

Ankita SrivastavaFinTech­Analyst,­EY­Knowledgeankita.srivastava@in.ey.com­

Regional­contacts

FinTech­ecosystem­playbook

FinTech ecosystem playbook

54

Notes:

FinTech ecosystem playbook

55

Notes:

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The­views­of­third­parties­set­out­in­this­publication­are­not­necessarily­the­views­of­the­global­EY­organisation­or­its­member­firms.­Moreover,­they­should­be­seen­in­the­context­of­the­time­they­were­made.

EY is a leader in serving the financial services industry

We­understand­the­importance­of­asking­great­questions.­It’s­how­you­innovate,­transform­and­achieve­a­better­working­world.­One­that­benefits­our­clients,­our­people­and­our­communities.­Finance­fuels­our­lives.­No­other­sector­can­touch­so­many­people­or­shape­so­many­futures.­That’s­why­globally­we­employ­26,000­people­who­focus­on­financial­services­and­nothing­else.­Our­connected­financial­services­teams­are­dedicated­to­providing­assurance,­tax,­transaction­and­advisory­services­to­the­banking­and­capital­markets,­insurance,­and­wealth­and­asset­management­sectors.­It’s­our­global­connectivity­and­local­knowledge­that­ensures­we­deliver­the­insights­and­quality­services­to­help­build­trust­and­confidence­in­the­capital­markets­and­in­economies­the­world­over.­By­connecting­people­with­the­right­mix­of­knowledge­and­insight,­we­are­able­to­ask­great­questions.­The­better­the­question.­The­better­the­answer.­The­better­the­world­works.­

©­2018­EYGM­Limited.­All­Rights­Reserved.­

EYG­no.­04870-185Gbl­

ED­None

In­line­with­EY’s­commitment­to­minimise­its­impact­on­the­environment,­this­document has­been­printed­on­paper­with­a­high­recycled­content.

This­material­has­been­prepared­for­general­informational­purposes­only­and­is­not­intended­to­be­relied­upon­as­accounting,­tax­or­other­professional­advice.­Please­refer­to­your­advisors­for­specific­advice.

Read­our­points­of­view­while­on­the­go­via­the­EY­Insights­mobile­app.­See­www.eyinsights.com.