Financial technology (fintech) firms in Asia are proving their mettle against banks by providing cheaper and more efficient FX remittance services. The novel approach allows fintechs to make use of cyptocurrencies such as bitcoin to send money across borders, without the stress of going to banks or joining long queues. The transfers are also not under the same regulatory and bureaucratic pressures banks are under, as the currencies themselves are ‘global’. “In the recent few years, fintechs are fighting for a bigger pie in the FX remittances business, giving incumbents like Western Union, MoneyGram and even banks that do telegraphic transfers, a run for their money,” says Peter Chia of UOB. Asian banks are beginning to take note of the services offered by companies like Nickel, and are investing in the start-ups.
Most banks and currency traders in Asia acknowledge that these companies bring an ease and efficiency to the system that cannot be accomplished by traditional banks. Nickel’s bitcoin trading platform will soon be a mobile application that would cater to Small and Medium Enterprises (SMEs) and private customers. Other services are allowing customers compare foreign exchange prices across different locations and enabling them to purchase from any of the exchanges at their own convenience. “Mainly, fintech is related to bringing more ‘efficiency’ to the market,” said Masashi Nimura, who is the deputy head of global markets group at Krungsri. “For clients like consumers or SMEs, they can quickly buy or sell a foreign currency at a relatively cheaper cost with more convenience in online platform or mobile application.”