Report on Financial Technology (FinTech) in Cambodia
Financial Technology (FinTech) in Cambodia Setting the scene This report is structured in the The term ‘FinTech’ is both relatively new and under- following content: estimated term in Cambodian financial service industry in recent years. As FinTech is getting more traction and 1. The perfect storm attentions, financial institutions are looking closer at the threats and opportunities of FinTech; and the key 2. Cambodian FinTech Ecosystem regulators are also keen to understand more about this new players . 3. FinTech in Cambodia This report – informed by open-ended interviews with companies across the Cambodian FinTech spectrum, extensive secondary research, and reviews of key industry experts – is an endeavor to better understand the current FinTech developments in Cambodia.
The key enablers of Cambodian FinTech Firms Gap between financial services needs & formal supply Accelerating Technological advancement & adoption 3 – FinTech In Cambodia
The Perfect >$24 Billion Gap between financial services needs & formal supply Storm Factors Needs vs. Formal Supply Gap Customer Needs The potential impact of Digital (of Target Segment, US$ Billion) (Products) Finance Applications >$2 Billion Additional electronic payment flows >$1 Billion Additional credit uptake >$3 Billion Additional Saving Mobilization Source: ADB. (2017). Accelerating Financial Inclusion in South-East Asia with Digital Finance. It is important to note that this research focuses on financial exclusion in three segments: base of pyramid (BoP); women; and micro, small, and medium enterprises (MSMEs). Hence, the gap and impact might be bigger if all constituents are included 4 – FinTech In Cambodia
The Perfect Accelerating Technological Storm Factors advancement & adoption TOTAL POPULATION More than of population under the age Urbanization: 21% 16 m 50% (with the annual rate of of 25 with high adoption change 2.65%) rate of technology INFRASTRUCTURE QUALITY MOBILE SUBSCRIPTION INTERNET USERS 7.16 m 27.60 m & ACCESS The advancement of next-generation +43% since Jan 2016 (+2m) +6% growth and 173% technology provides a level playing with 45% penetration rate compared to total population field for FinTech firms allowing them to not worrying about inflexible legacy 4.5 MILLION mobile users systems, (regulation) and siloed connected to Facebook channels. This has lowered the 49% barriers to entry. Cost advantage is on the FinTech side. 46% 5% Internet 8 4 Mobile Laptops & 3.4 M 660 K 440 K Mobile Tablet Service Desktop Phones Operators Devices Providers Source: World Fact Book (cia.gov), wearesocial.com/uk/, 5 – FinTech In Cambodia Facebook Inc. G-SMA Intelligence, Geek in Cambodia
Cambodian FinTech Growth Compliance Ecosystem REGULATORS CREATORS For the purpose of this report, we will look at FinTech ENABLERS SUPPORTERS Ecosystem in four integrated domains, which are 6 – FinTech In Cambodia
ENABLERS SUPPORTERS Collaboration Business Associations Investments/ + & Development Grants Partners Corporates in + + FinTech/ 0 + Co-Working Space for Innovation FinTech Startup + + 0 Accelerators & Incubators for FinTech Financial Institutions in Events/ FinTech/ Meetups Innovation Office Hours Technology & Social 8 4 Mobile Internet Service Infrastructure Operators Providers Media Ministry of Economy National Bank of & Finance Cambodia 0 Universities & Academia REGULATORS 7 – FinTech In Cambodia
PAYING • Mobile Wallet • Money Transfer/ Remittance • Gateways/ Alternative Innovative Core banking Payments Loan • P2P Payment for MFIs & Operators Comparison Site • Card Processing/ POS FINANCING Institutional Tools Invoice P2P Alternative Credit Discounting Lending Decision & Monitoring INVESTING 0 INSURING Analytics/ Blockchain Identity/ Risk
Conclusion 1. Regional Recognitions FinTech is not disrupting Cambodia’s financial 2. Inclusive FinTech services, It is joining its 3. Corporate investment development 4. FinTech provides platform for other industry growth 5. Saving & Insurance is the next areas of great potential 9 – FinTech In Cambodia
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