Tech innovation can take Asia's fintech to the next level

THE past decade has seen a great deal of transformation in the financial services sector as it wades into digital waters, providing a range of new digitally-enabled services for consumers today. From the rise of QR-code enabled payments in China to sophisticated mobile banking interfaces in Singapore, Asian economies are setting the innovation agenda across the sector. With that, consumer-centred innovation appears to be at the heart of Asia's financial evolution.

In recent years, distributed ledger technology has enabled Internet-level exchange and trading of cryptocurrencies, which operate outside the traditional financial system. Volatile in nature, cryptocurrency issuers have taken to pegging the value of these tokens to fiat currency, stabilising their value and increasing their usability.

Whether in a bid to wrestle back control of what is traditionally their jurisdiction or as a push towards adapting to the changing times, 80 per cent of the world's central banks are now looking to launch their own state-backed digital currency. Critical research, promising pilots and calls for the implementation of central bank digital currencies (CBDCs) have emerged across diverse economies in the Asia-Pacific. What has catalysed this sudden rise, and what does this mean for the future of the region's financial ecosystem?