<article>Having reached an inflexion point, digital payments in Southeast Asia are poised to exceed $1 trillion in transaction value by 2025, according to a fintech study conducted by Google, Temasek and.</article>

Having reached an inflexion point, digital payments in Southeast Asia are poised to exceed $1 trillion in transaction value by 2025, according to a fintech study conducted by Google, Temasek and.
The report, which covers payments, remittances, lending, insurance and investments, says that digital payments and remittances in Southeast Asia are currently at or approaching inflexion points driven by the region’s high smartphone penetration and engagement.
“The other services—lending, investment and insurance—are still emerging, but each should grow by more than 20% annually through 2025,” the report said.
By 2025, digital financial services are expected to generate revenues of about $38 billion and account for 11 per cent of the total financial services industry.
The region’s digital remittance market is expected to facilitate a total flow of $28 billion, while digital insurance is likely to see $8 billion in gross written premiums. Meanwhile, digital investments are projected to grow to as much as $75 billion in assets under management.
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However, it is digital lending that is expected to be the biggest revenue generator, with a loan book predicted to grow to $110 billion by 2025 led by innovations in consumer lending and SME working capital financing.
With a population of 570 million and a booming GDP expected to reach $4.7 trillion by 2025, the six largest countries in Southeast Asia represent one of the world’s largest and fastest-growing regions. Within the region, the financial services landscape is diverse and highly fragmented comprising of three distinct customer segments: the banked, underbanked and unbanked.
The report identifies the banked segment as a major focus for established players, while the underbanked segment has attracted consumer tech platforms. Contrary to common perception, pure-play fintech and consumer tech platforms are not making a meaningful impact on the unbanked segment, the report said, citing the need for greater intervention by the government to accelerate development.
Fintech investment in Southeast Asia grew by almost 140 per cent annually from 2016 to 2018 fueled by readily available funding. Fintech players raised over $2 billion in funding over the last three years, with over $1 billion raised in 2018 alone.
Consumer tech platforms such as ride-hailing and e-commerce companies raised over $24 billion over the same period, and their investments to build digital financial services most likely surpassed the amount raised by the standalone fintech players, the report noted.

Digital payments and remittance in Southeast Asia are currently at or approaching inflexion points driven by high smartphone penetration and engagement.

Digital payments in Southeast Asia to top $1t by 2025, says report

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Digital payments in Southeast Asia to top $1t by 2025, says report

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