The emerging of banking industry in developing countries – particularly in Asia, still face a problem, especially in rural areas. In addition to inadequate infrastructure, a significant difficulty is the lack of community welfare which resulting in low financial transactions. While in fact, each region has a great potential for the development of the financial industry. This is a vicious circle that must be addressed by local governments and financial industry players to advance the development of economy and finance.
In some countries like Indonesia, Singapore, India, and Myanmar, the financial industry has launched several efforts to bridge this gap. Governments of aforementioned countries have run several initiatives which at least pave the way for financial companies such as banks and non-bank fintech services to embrace more people to be financially developed.
The government regulation in the banking sector has made it possible for the bank to open a branchless banking system, making it easier for people to access and use financial products. The government also supports the enactment of digital technology in the financial arrangements such as the issuance of e-money system for the use of public services and public welfare assistance.
In Indonesia, the government has sought regulation of electronic money is to be finalized in September until the end of 2016. This regulation is expected to help ease financial institutions for conducting e-money. Until recently, the Indonesian Financial Services Authority (OJK) has not had a specific regulation on finance technology, while the financial services industry continues to grow every day. With the finalization of this rule, the government of Indonesia through Bank Indonesia will also open fintech office at the end of the year to support the fintech movement in this country.
While in Singapore, the government and private agencies are planning to build a Fintech hub, which is expected to become the biggest global fintech hub in the world. Its strategic location in the central business district allows it to be a center for the development and training fintech startups, both domestic and foreign.
In Myanmar, the government has made laws that allow non-banking institutions to make e-money system in order to achieve more customers. Branchless financial system really help the people of Myanmar, especially in rural areas to conduct financial transactions. People in these areas are being educated to start keeping their money in financial institutions. With the e-money system, the people of Myanmar can be more convenient to shop and send money securely.
The Impact For Business
With the government intervention, the financial industry in Asia could be developed with clearer and more supportive regulations for fintech development. Banking business can develop their financial management system, while the non-banking institutions can participate in the development of e-money system with detailed pattern and structure. The business growth will be supported by advanced technology in financial sector.
WGS also realized the importance of e-money system which accelerate the economic development. As a software provider, WGS has also been working with several financial institutions in Indonesia to develop the financial industry digitally. Either in Indonesia, Singapore, and other developing countries in Asia, WGS is ready to participate in global fintech industry.