A new report by Airwallex and CPA Australia shows that only one third of Asia Pacific (APAC) businesses have invested in fintech despite increasing digital adoption in the face of COVID-19.
600 CPA members in the APAC region were surveyed with the aim to educate businesses about the benefits of financial technology and to address barriers to the widespread uptake of fintech solutions.
The survey results reveal that 70 per cent of surveyed APAC businesses have not used any fintech solutions and 40 per cent said they are unaware of fintech and its benefits.
Businesses cited high banking fees (48 per cent), slow and manual service delivery (35 per cent) and inability to set up global bank accounts (29 per cent) as the top pain points for meeting banking needs.
Cybersecurity concerns (53 per cent), data privacy concerns (48 per cent) and reliability and trust (48 per cent) were identified as the major barriers to wider fintech adoption by companies.
Despite the low adoption rates, Australia is still ahead of other APAC members when it comes to fintech familiarity, awareness, and usage.
61 per cent of Australian-based CPA members said they are aware of the fintech options available for SMEs and enterprises compared to Hong Kong (57 per cent), Malaysia (56 per cent) and Singapore (54 per cent).
39 per cent of Australian businesses report using at least one or more fintech, which is also higher than Hong Kong (36 per cent), Singapore (28 per cent) and Malaysia (20 per cent).
Australian businesses missing out on fintech benefits
Global Head of SME at Airwallex Neil Luo said that financial technology has transformed the global economy, creating new revenue streams and operating efficiencies that allow businesses to remain viable in an increasingly competitive environment.
The overall low use of fintech by APAC businesses therefore highlights “a huge missed opportunity for businesses across the region” when it comes to realising its benefits.
“Many of the key business pain points – including opening accounts overseas, being charged high FX fees on foreign transactions and inability to issue employees with their own cards – can be alleviated or resolved through fintechs such as Airwallex,” Mr Luo said.
“We understand education is key to greater fintech adoption and look forward to working alongside CPA Australia in supporting accountants and the businesses they serve.”
Manager of Business and Investment Policy and Asia Policy Lead at CPA Australia, Gavan Ord, said that Australian businesses are lagging behind their international counterparts when it comes to adopting fintech solutions.
“The current business environment amid the COVID-19 pandemic has made digital technologies more essential than ever before,” Mr Ord said.
“Many of our members support clients who need help transforming into digital-first businesses. With the right technology, businesses can improve their agility in this highly competitive environment.”
Dr Gary Pflugrath, the Executive General Manager of CPA, called fintech a “gamechanger” and urged industry leaders to deliver solutions to adoption barriers.
“For businesses with international suppliers, employees and/or customers, adopting fintech could reduce the cost and effort of international payments, while also increasing visibility over such transactions,” Dr Pflugrath said.
“Increasing cybersecurity frameworks and resilience in the fintech sector must be a priority for the industry, regulators and policymakers.
“The challenge for regulators is to maximise the benefits of fintech while minimising potential risks for consumers, business and the financial system.
“Regulatory authorities across the world must work together with the sector to understand novel business models and their underlying risks, to adequately assess potential implications for financial markets and respond with agility.”
The full report can be accessed here.