ASEAN’s Fintech Agenda Should Look Outward

Fintech startups are expanding at an exceptional pace. Emerging markets around the world have demonstrated how market integration, investment in digital infrastructure, access to capital and innovation-friendly regulation can catalyze rapid growth in fintech startups—offering compelling lessons for ASEAN’s own reform agenda.

As of July 2023, the number of fintech firms increased almost seven-fold from 5 years prior, while market capitalization of publicly traded fintechs doubled between 2019 and 2023. Global venture funding has rebounded to exceed pre-pandemic levels, reaching $51.8 billion in 2025. Across emerging markets, this momentum is reinforced by rapid internet expansion and a strong shift towards mobile-first behavior. The COVID-19 pandemic also helped accelerate the shift toward digital money and digital payments.

Fintech firms have been widely championed for their ability to reach historically underserved communities, including youth, low-income groups, women and small businesses, placing them at the center of financial inclusion agendas. At the same time, an estimated 1.3 billion adults worldwide remain unbanked.

Successful models

Fintech has already found success. In 2020, Brazil’s central bank launched Pix, a national instant payment system that processed 57 billion transactions as of 2024, alongside open banking regulations that promote data sharing and personalized financial services.

Kenya’s M-PESA is a widely cited example of fintech innovation led by large telecom operators. The partnership of Egypt’s national payment scheme Meeza with Fawry (the country’s first fintech unicorn) and Banque Misr (one of Egypt’s oldest banks) on products and services illustrates the value of collaboration between fintechs and traditional financial institutions.

India offers another compelling model through its Digital Public Infrastructure—comprising the Aadhaar digital identity system, the Unified Payments Interface, and the Account Aggregators ecosystem for secure data exchange. Facilitating over 20 billion transactions per month in 2025, the Unified Payments Interface is now among the world’s largest payment networks and has been adopted or licensed by countries like Singapore and Peru.

Yet regardless of the model, common barriers of lack of funding, regulatory fragmentation, and uneven digital infrastructures continue to hinder fintech firms’ ability to scale across regions, including in ASEAN.

Southeast Asia’s fintech ecosystem is expanding rapidly, shaped by data-driven super apps and digital payments, with transaction value reaching $1.4 trillion in 2025 and projected to grow to $2.4 trillion–$2.6 trillion by 2030. But growth remains uneven.

In 2022, around 79% of adults in Southeast Asia had no access to credit, insurance or investment products, particularly concentrated in rural populations, micro-enterprises and women. Inadequate digital infrastructure, poor connectivity and limited digital skills and literacy continue to restrict their access to financial services—including fintech—reinforcing existing inequalities.

The ASEAN Digital Integration Index 2.0 shows a 36-point gap in the availability of digital infrastructure and the digital readiness of institutions between the region’s top and bottom performers. Fintech funding also remains highly concentrated, with Singapore-based firms accounting for up to 85% of regional funding in 2025. For markets such as Indonesia, Malaysia, the Philippines, and Thailand, these gaps in capital access and technology readiness inevitably constrain fintech firms’ ability to scale and provide inclusive solutions.

Overcoming challenges

Addressing these challenges will require a more coordinated ASEAN policy approach centered on infrastructure development, interoperability and targeted inclusion measures. ASEAN can learn from Brazil and India and integrate interoperable payment systems, shared digital identity frameworks and open data standards to lower costs and expand access. The region can also leverage partnerships, as shown in Africa, especially to reach underserved populations.

Introduced in 2022, the ASEAN Regional Payment Connectivity initiative enables cross-border transactions through standardized QR codes. Eight ASEAN economies are now connected through bilateral QR payment linkages, with expansion underway to partners including Hong Kong, China; India; and Japan. Yet the initiative could be strengthened by policies fostering currency stability, circulation of capital, and anti-money laundering regimes at regional level.

Another critical development is the ASEAN Digital Economy Framework Agreement (DEFA). By advancing a unified and secure digital economy, DEFA’s emphasis on digital infrastructure expansion and regulatory alignment is expected to deepen market integration, harmonize cross-border data frameworks, reduce transaction costs, and stimulate investment. Once implemented, DEFA has the potential to accelerate fintech innovations—in particular advanced technologies such as artificial intelligence—through regulatory sandboxes, pilot programs, and policy dialogues.

But these regional initiatives must be complemented by sustained knowledge sharing, technology transfer, and deeper cross-border partnerships. The renewed Memorandum of Understanding on fintech cooperation between Indonesia and Singapore commits both countries to joint pilots and knowledge-sharing in regulatory sandboxes, digital financial assets, and artificial intelligence-enabled financial services. This pairs Indonesia, which records the region’s highest digital payment transaction value, with Singapore, ASEAN’s largest fintech hub.

Fintech holds significant potential to advance inclusive growth in ASEAN by bringing millions into formal financial systems. Realizing this potential will depend on deliberate regional strategies that take into account ASEAN’s heterogeneity and focus on the promotion of equitable digital participation, foster competition, support innovation, and strengthen trust, while learning from successful models beyond the region.

This article was produced by ERIA and is republished here with permission.