New study finds that China totally dominates fintech in AsiaPac
China accounts for 99 percent of Asia Pacific’s fintech market, new research finds.
China is the largest global fintech country by far and accounts for a staggering 99 percent of the Asia Pacific fintech market on its own.
Fintech in the Asia Pacific is growing rapidly and grew by 135 percent in 2016, a landmark new study by Cambridge and Monash University has found.
But China is growing the fastest and accounts for a massive $243 billion out of a total $245 billion fintech lending.
“Internet finance is still only 5 percent of China’s lending market. By contrast, online gaming accounts for 15 percent of China’s gaming market. So even in China there is still a lot of headway for growth.”
Australia comes in a very distant second place with its fintech market growing 53 percent in 2016 to $609 million. With the growth, Australia leap-frogged Japan and South Korea in absolute cash terms, despite having a smaller economy.
The report, which surveyed more than 600 fintechs in 19 countries, noted that “fintech” was different wherever you went, but mostly meant providing access to more affordable loans to consumers and startups. While payments also played a significant part, there was a strong skew towards debt and online lending.
Speaking to the results, Monash University’s Professor Edward Buckingham who headed up the report said that politics played a big part in why China’s fintech space was so much larger than anywhere else.
“China runs a repressive financial system with large state-owned banks and high savings rates. It is recognised by communist party as a problem.
“Transaction costs are really high for consumers to execute across China. You have a relatively inefficient state controlled or oligopolistic financial system that prevents efficient banking from happening.
“We have seen this explosion [of fintech in China] because people have needed it for a long time. China deserves a medal for what it’s done, but we need to see what it for what it is.”