2. Background

Emerging markets are providing fertile soil for financial technology (fintech), which is shaking up the financial industry. Innovations in mobile payments, online banking, and alternative loan platforms are breaking the traditional mold by utilizing technology to provide financial services to people who previously had no access or inadequate services.

One of the key functions of fintech in emerging markets such as Africa and Southeast Asia is the need for financial inclusion. In particular, low-income populations have limited access to traditional banking services. As a result, they face difficulties in planning their finances, securing credit ratings, starting, and maintaining businesses, pursuing personal lives, and growing. This creates a cycle of poverty that is difficult to break. It is believed that some of these challenges can be addressed by providing convenient financial services through fintech digital platforms that are accessible to low-income populations.

Another factor driving fintech growth, particularly in South Africa, is the high level of mobile penetration, which reaches up to 90%. Therefore, providing financial services through digital platforms can be the first step in providing opportunities for financially excluded populations to access financial activities, addressing the aforementioned challenges.

At this juncture, interest in alternative forms of financial services is increasing in African and Southeast Asian markets, and people are seeking alternatives to traditional banks and financial institutions, which are costly and difficult to access. Fintech technology can provide various services such as mobile banking, P2P loans, and cryptocurrencies, offering alternatives to traditional financial products.

As a result, emerging markets are increasing the need for government-level financial inclusion, and fintech technology in Africa and Southeast Asia is promoting economic growth and promoting financial inclusion through government support and friendly regulatory environments.