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Bangladesh least active fintech country in Asia Pacific: Report

Black_cats

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Bangladesh least active fintech country in Asia Pacific: Report

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Muhammad Nafis Shahriar Farabi
24 June, 2021, 10:10 pm
Last modified: 24 June, 2021, 10:45 pm

The largest improvement in this region occurred in New Zealand and Taiwan, while Vietnam, Bangladesh and Thailand experienced the greatest drop in this ranking


Bangladesh has ranked 78th among 83 countries in the Global Fintech Index 2021, indicating that the country is falling behind in terms of using technology to automate and digitalise financial activities.

It slipped 17 notches in the global ranking compared to the previous index, and currently ranks lowest out of 16 countries in the Asia Pacific region. Dhaka ranked 225th out of 264 cities globally, while New Delhi became the only South Asian city to secure a place in the top 20.

The index was released on 23 June by Findexable, a London based global research and analytics firm, in partnership with Mambu – a market leading cloud banking and financial services platform. It covers the entire 2020 and the first half of 2021.

The United States, United Kingdom and Israel are the most active fintech countries globally, while Singapore, Australia and China topped the Asian ranking.

Fintech refers to the application of internet, software and mobile apps for daily financial transactions. Some of its key components are artificial intelligence, Big Data, Blockchain and Cryptocurrency.

First published in 2019, the Global Fintech Index now covers 264 cities in 83 countries incorporating data from Findexable's own records, collated and verified by its Global Partnership Network that includes Crunchbase, StartupBlink, SEMrush and more than 60 other Fintech associations worldwide.

The ranking scores were based on 3 domains – the quantity of privately owned fintech companies, the quality of those companies and the local business environment.

According to the report, the largest improvement in Asia Pacific occurred in New Zealand and Taiwan, while Vietnam, Bangladesh and Thailand experienced the greatest drop in the ranking in this region.

Japan, India, South Korea, Philippines and Pakistan respectively ranked 4th, 5th, 6th, 11th, and 15th in the region.

Becoming more geographically diverse
In terms of cities, the San Francisco Bay, London and New York are the top three in the ranking. It is expected as they are the global centers of development. A country or city must host the headquarters of at least 10 privately-owned fintech companies to enter the list.

Despite the economic slowdown caused by the pandemic, 50 new cities and 20 new countries debuted in the ranking, which is a remarkable milestone to achieve.

African countries, particularly sub-Saharan ones joined the list this year, which made the fintech industry more diverse. Seychelles, Rwanda, Tunisia, Zimbabwe, Somalia, Cameron and Ethiopia are the African states debuting in this year's ranking.

In Somalia, barely 20% of the population holds a bank account. The state was plagued by decades of civil wars and their central bank only reestablished in 2009. Even this country now has headquarters of at least 10 privately owned fintech companies.

Riyadh, Montevideo, and Detroit are the top three cities to experience the highest growth in the ranking.

Riyadh is the most populous and wealthy state in the Gulf region, which allowed fintechs to scale fast and attract capital. In Montevideo, the growth in the fintech industry was largely based on the growth of a unicorn named dLocal that raised $350m during the pandemic.

A unicorn company, or unicorn startup, is a private company with a valuation over $1 billion.

The needs of specific populations are being served as more fintech companies have been founded in a greater range of locales from Flutterwave in sub-Saharan Africa to the digital currency launched in the Bahamas.

Providing an explanation, Findexable's founder and CEO Simon Hardie said, "The level of investment and activity in the fintech sector is hugely gratifying for those of us who have been championing the industry.

"It is especially good to see that the pandemic didn't slow down, and may have in fact accelerated, the adoption of fintech in parts of the world that have previously been underserved."

 

Bilal9

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This is kind of odd.

I thought the rate of Fintech adoption in Bangladesh was rather high. Note the rate of adoption for e-commerce platforms and services for travel (Pathao, Uber) and restaurants using BKash, Nogod etc.
 

Destranator

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This is kind of odd.

I thought the rate of Fintech adoption in Bangladesh was rather high. Note the rate of adoption for e-commerce platforms and services for travel (Pathao, Uber) and restaurants using BKash, Nogod etc.
These are largely out of reach for lower middle and lower income groups who are the overwhelming but silent majority of this country.
 

Bilal9

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It's simple. BD people hardly use bank accounts.
Well - I don't think Fintech has really got much to do with actual Bank accounts, they target the non-banked individuals with cashless transactions (i.e. "Mobile Banking"). Please read my comments on another thread a few days ago and let me know what you think...this is why I'm doubting these London people with "financial knowhow and expertise". Sometimes they don't know their left hand from their right and operate with complete ignorance...and believe people will believe whatever BS line they feed all of us...

And I'm not doubting this simply because they say Bangladesh is in a bad position. I know Bangladesh in some cases is bottom of the barrel, but in this case this is way non-credible. BKash is supposed to be the most successful Fintech brand in South Asia.



These are largely out of reach for lower middle and lower income groups who are the overwhelming but silent majority of this country.
BKash and Nagad is used by everybody, even garments workers and rickshawpullers sometimes. That is how they get paid.
 

Destranator

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Well - I don't think Fintech has really got much to do with actual Bank accounts, they target the non-banked individuals with cashless transactions (i.e. "Mobile Banking"). Please read my comments on another thread a few days ago and let me know what you think...this is why I'm doubting these London people with "financial knowhow and expertise". Sometimes they don't know their left hand from their right and operate with complete ignorance...and believe people will believe whatever BS line they feed all of us...

And I'm not doubting this simply because they say Bangladesh is in a bad position. I know Bangladesh in some cases is bottom of the barrel, but in this case this is way non-credible. BKash is supposed to be the most successful Fintech brand in South Asia.





BKash and Nagad is used by everybody, even garments workers and rickshawpullers sometimes. That is how they get paid.
Using debit and credit cards linked to bank accounts drive use of financial tech at the consumer level. There low % of population using bank accounts is holding people back. Poor people only use Bkash Nagad etc when they are forced to. Cash still dominates.
 

Bilal9

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Using debit and credit cards linked to bank accounts drive use of financial tech at the consumer level. There low % of population using bank accounts is holding people back. Poor people only use Bkash Nagad etc when they are forced to. Cash still dominates.
I realize that but volume is still volume.

Did you see the headline, " Internet banking transactions exceed Tk10,000cr in March in Bangladesh "

10,000 crore in transactions is not anything to scoff at really. And this is just the beginning....
 

Destranator

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I realize that but volume is still volume.

Did you see the headline, " Internet banking transactions exceed Tk10,000cr in March in Bangladesh "

10,000 crore in transactions is not anything to scoff at really. And this is just the beginning....
It is a step in the right direction with a long way to go.
I am just explaining why we are languishing at the bottom of the table.
 

EasyNow

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Not sure why this is even an issue? It's not necessary that we have high numbers in everything, particularly if we're not really ready for it.

It's like the whole 'not enough car sales' metric - this sort of statistic is irrelevant and arbitrary, only picked by jealous Indians so they have something to brag about.

It's got no traction in the real world. If it did, it would have been solved already.

Ps. Also I find the entire report pointless, commissioned as it is by the fintech industry, who are obviously pushing their sector.

The report is titled misleadingly, when it says BD is 'least active fintech country'. As @Bilal9 points out BD is substantially active in fintech with 10000 Cr monthly transactions.

The criteria they are using is less about our uptake of Fintech (which is the important part) and more about having local companies.

ranking scores were based on 3 domains – the quantity of privately owned fintech companies, the quality of those companies and the local business environment
Why is having more fintech companies an issue when it comes to adopting Fintech ? If we are making crores of online payments through established companies, it shows that BD has full access to this option when required.
 
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