China and Japan have been at the forefront of Fintech expansion and innovation. How has the Fintech sector transformed all segments of the banking industry in Asia?
Fintech aims to improve the delivery of financial services by eliminating traditional financial methods. Fintech aims to achieve this through the incorporation of technology is an industry that can be described as continually emerging and evolving. Modern technology incorporated includes the use of smartphones to perform activities like mobile banking as well as the use of the cryptocurrency that makes financial services accessible to people locally and globally. These two countries China and Japan, have been at the forefront of the innovation and expansion of the Fintech technologies. In the two countries, Fintech influence continues to increase, and projected numbers show an increase from $26.67 billion to over $55.33 billion. Despite these markets being volatile, China and Japan have invested in modern technology that helped them continue to achieve success locally and globally. Through such success, many investors realize the benefits that financial technology can bring to businesses in both developed and developing countries. All in all, the Fintech sector continues to transform all segments of the banking industry in Asia.
Fintech sector influences the Asian banking industry by introducing Robo-advisors to replace traditional financial advisors. Robo-advisors are a product of human ingenuity as these are robots created to perform human tasks faster and more accurately. In China and Japan, Robo-advisors personalize investment options and analyze financial data online for investors with minimal human intervention. The success of the Robo advisors is due to the theoretical calculations are done accurately advising relevant shareholders about asset location and portfolio optimization. For the Robo-advisors, all calculations are fully automated, and more importantly, the investment portfolios are managed by software and algorithm. Additionally, the software can grant access to many more investors than the traditional advisors who could only handle a few people simultaneously. Through Robo-advisors, investors get access to the portfolios, thus makes the best investment decisions based on their financial capability.
Traditional financial advisors existed only to serve the high net worth clients since they were the best analysts of investment and financial data, thus creating a successful portfolio. Traditional financial advisors were mainly used by banks or brokerage firms in China and Japan. Traditional financial advisors were mainly utilized after China and Japan entered the World Trade Organization (WTO) in the year 2001. The interaction between clients and human, financial advisors sometimes turned chaotic since humans are prone to emotions. Due to the possibility of such scenes, there needed to be mediators who provided professional advice to the high-end clients on the best investment options. Both countries, however, realized how their market growth was low due to relying on human intellect to analyze financial numbers. Additionally, there was a management fee to hire the services of the human financial analysts, which was fixed despite making the wrong predictions for investments.
Asia produces some of the best opportunities in banking, leading to more investments in Fintech solutions. More so, in China and Japan, consumer banking has led to an increase in personal wealth, mobile penetration, and financial inclusion. Such growth is due to digital innovations, for instance, the Robo-financial analysts. Through such Fintech technological solutions, there were accurate forecasts in income growth, mobile banking, and personal banking revenues. As a result, the Robo analysts helped investors achieved over 25% annual income growth in emerging markets, 7.5% success rate in mobile banking options, and US$5 billion in revenue for those who banked personally.
Additionally, Fintech led to corporate expansion. In the financial institutions in China and Japan, they could lend other international banks since they had enough revenues. Fintech also led to the development of regional trade between China, Japan, and other countries part of the WTO. All in all, the Fintech sector has helped transform the Asian banking industry, and China and Japan have gained huge revenues being at the forefront of Fintech expansion.