Digital disruption has hit retail financial services in Asia Pacific (AP). In 2014, fintech investments in AP totaled US$880 million and skyrocketed to a staggering US$4.5 billion last year. Just as payments innovation has been a darling of venture capital investors in the US, the picture is not so different in AP as payments took the largest share of fintech investment deals at 40%. This is followed by lending at 25%. However, the next frontier of disruption doesn’t lie in payments and lending. FF16, AP’s first fintech competition, featured an array of fintech finalists offering a wide array of capabilities that signal what is to come in digital disruption in financial services.
Forrester observes that the next frontier of digital disruption for the financial services sector will take place in investment, security and authentication as:
- Data access, predictive analytics, and machine learning drive investment innovation. Exploding volumes of data are driving new, disruptive products and services in retail financial services.
- Identity authentication services take off with interest from financial firms. For financial institutions, meeting AML and KYC requirements is difficult and comes at great cost—often running into hundreds of millions of dollars.
- Risk management services approach prime time as fraud reaches alarming levels. Financial institutions incurred more than US$16 billion in fraud losses on credit, debit, and prepaid cards, with the highest overall rates of card fraud occurring in AP. Card fraud not only has a direct financial impact on financial institutions but also causes attrition as customers lose confidence in banks to prevent future fraud.
While mentioning some solutions for each digital disruption for FSI, Apvera is mentioned as one of two players to manage the risk for point three “Risk management services approach prime time as fraud reaches alarming levels” by leveraging machine learning and pattern recognition from companies.
