Thailand’s Siam Commercial Bank held a fintech event last week on behalf of its digital arm, Digital Ventures. ‘Faster Future: SCB Fintech Forum‘ drew in speakers from across the globe, from Wei Hopeman, Managing Partner at Asia based Arbor Ventures to Jeffrey Paine, co-founder of Singapore based Golden Gate Ventures, an early-stage VC firm that focuses on Southeast Asia.
“Southeast Asia looks like China in 2006, like India in 2011,” said Paine. “In China and India, the competition is usually local, but in Southeast Asia, the competition comes from around the world.”
During his panel, Paine outlined eight key tech sectors that he believes we will see more of in Southeast Asia within the next 3-5 years.
1. The age of differentiated commerce, more B2B
- It is the age of niche B2B ecommerce. Southeast Asia will see the growth of niche verticals in the B2B space, for example, the rise of the industrial sector in Singapore
- The industry will see a surge in ecommerce enablers that help traditional companies go online
- Ecommerce will shift slightly to differentiated commerce. This refers to a culmination of good content, strong networks and an efficiency in selling. Ecommerce has evolved to an all-round experience, not simply putting something up for sale online
2. The rise of a ‘one stop shop’ financial platform
- The region can expect a rise in fintech transactions over the next 2-3 years
- Integration of big data in credit scoring will be prominent, especially in Indonesia. Big data should be able to minimize the amount of work and extend sources needed to provide loans.
- The ‘one stop shop’ financial platform will allow you to purchase loans, insurance and credit cards in one place. This will be a place where a few winners can come into dominate market share
- The rise of pure mobile online banks. Vietnam is already starting to adapt following the launch of Timo Bank, the country’s first digital bank
- Financial services for ecommerce. For example, consumer credit will matter when a shopper buys something on a marketplace. This will also be in tandem with the rise of vendor financing for marketplaces
- On-demand insurance will also become a trend in the next 3 years i.e. Asia Insurance
- Blockchain infrastructure will arrive in Southeast Asia
3. Automobile innovation to benefit B2B & B2C
- Innovations will be in the areas of software that helps drivers find parking, rent cars, connect with automobile care
4. The rise of healthcare tech in Thailand and Singapore
- The birth of centralized data hubs and analytics will be integrated with healthcare
- Creation of software for hospitals, clinics and private practices to make their workflow more efficient. Ex. Patient records, paying bills etc.
- The application of IoT software for hospitals and senior homes
- The rise of telemedicine platforms online and doctor on-demand services. This would benefit rural provinces as it’s a challenge to find doctors on demand when you’re not in a big city
5. The strengthening of enterprise SaaS
- AI/Machine learning based predictive analytics software for business users, especially in the area of automated customer service and sales management software
- Will take time to develop and be applied, but it should be used by HR departments and accounting/finance divisions to automate certain processes such as number crunching and database filing
6. Long-haul logistics
- Long haul trucking would be particularly useful for the popular trucking route between Malaysia-Thailand and vice versa
- On-demand trucking platforms could add more convenience to consumers, allowing them to have parcels delivered at a more flexible schedule. This would be a challenge in Indonesia due to the different islands within the country
- Route planning innovation will also become a trend in logistics. This would help to tackle various roadblocks such as unidentified locations, problems with delivery addresses and more.
7. Increasing popularity of agritech
- Agritech has been slow to rise, but should become a key trend within the next few years as agriculture is prominent in Southeast Asia
- The development of financial services for farmers will pick up. Thailand and Indonesia have begun to develop government centric databases and e-procurement platforms, but neither has fully taken off
- The creation of market linkage models, ex. farm to table platforms
Southeast Asia is waking up, especially as each country’s government is pushing tech initiatives and creating guidelines such as sandboxes for fintech and exploring taxing for ecommerce.
According to Jeffrey Paine,
As soon as the government starts to push, large corporations will begin to take notice.
This trend is apparent in Thailand, with many institutional banks such as SCB itself, or Kasikorn bank venturing into digital finance services.
Real estate companies such as Sansiri are teaming up with SCB to explore property tech, focusing on research, development and startups, aligning with the Thai government’s 4.0 initiative that aims to move the country towards a more digitized framework.
Jeffrey Paine notes that for domestic startups, going regional is not impossible. China will play a significant role in the region’s development, and Southeast Asia needs two main vices; capital and time, in order to accelerate the region’s technology growth.