Managing Asia

Managing Asia

Asia has leapfrogged the West in fintech, Synechron CEO says

What it takes to be a successful fintech start-up
What it takes to be a successful fintech start-up

Emerging markets in Asia have surpassed their Western counterparts when it comes to the adoption of financial technologies, the chief executive of tech consultancy Synechron said.

"I think there are many cases where Asia is leapfrogging perhaps the West, especially in emerging markets where fintech is playing a major role in financial inclusions in payments and transfers and microlending," Synechron co-founder and CEO Faisal Husain told CNBC's "Managing Asia."

A commuter checks his mobile phone while using a bike share on March 27, 2017 in Beijing, China. Mobile payments platforms in China are used for everything from renting bicycles to paying for restaurant bills.
Kevin Frayer | Getty Images

Synechron, which provides digital solutions to financial institutions, was started by Husain and his friends in 2001 just as the dot-com bubble burst. The company is now a $405 million enterprise based in New York.

With its favorable demographics and inadequate financial networks, emerging Asia presents opportunities for fintech players. Fintech companies in China alone received more than $6.7 billion in investments in 2016, according to KPMG.

This also takes place against the backdrop of the rapid expansion of Chinese tech giants. Alibaba-affiliate Ant Financial runs popular payments platform Alipay and has made a string of mergers and acquisitions in recent months, including helloPay Group and a high-profile bid for MoneyGram.

Despite 60 percent of his business coming from the U.S., Husain was optimistic about Asia, adding that Synechron had been investing heavily in blockchain and artificial intelligence technologies.

The world's biggest online payments platform
The world's biggest online payments platform

While Husain wouldn't pick winners among the cities vying to be the world's leading fintech hub, he acknowledged the greater level of governmental support in cities such as Dubai and Singapore.

"The thing in the U.S. and in Europe is (that) there is not so much involvement from the government. A lot of this support is through the investment ecosystem: the private equity firms, the venture capital firms that support the start-up community," Husain said.

"But in places like Dubai and Singapore, you see the government playing a helpful role in supporting the start-up community because the VCs haven't come there yet."

Husain also added that given how many of fintech-related issues at the ground level tend to be local or regional-specific, multiple fintech hubs could be the name of the game.

"(T)he world is large … So you do need these hubs. You cannot have one hub, being the (global) leader."