It seems that the only certainty about what a Trump presidency is going to mean is uncertainty. Trump’s predilection to “tweet first, think later”, his populist and protectionist campaign message, his frequent ‘policy’ reversals, and a wide spectrum of cabinet nominees all add up to confusion and therefore uncertainty in markets as well as in government halls around the world.


There is a growing consensus that interest rates are headed up (there is so little downside that the odds favour this anyway), that risk premia will expand (due to volatility as well as economic and geopolitical risks), and that the greenback will remain strong. History would indicate that this combination generally leads to lower private sector investment and lower valuations around the world. Add to this the challenges that are appearing in regards US trade policy (the TPP has virtually no hope of surviving in its current state, tariffs may be introduced, and increased pressure will be brought on companies looking to move operations offshore) and global companies may well be looking at higher costs and reduced (or even negative) revenue growth. Naturally, ASEAN economics, currencies, and companies will not be spared this global volatility and uncertainty.

What about FinTech in ASEAN?

The first perspective is that of the fintech investor. As the cost of capital rises (both due to interest rates and volatility), valuations will be under pressure, liquidity will be at a premium, and due diligence will be more thorough. All investors, including those looking at fintech, will be more risk averse and more demanding in terms of adherence to plans. There likely be fewer capital pools and therefore fewer exit channels – so investments must be made with a longer time horizon in mind. Raising VC and PE capital from traditional sources will also become increasingly more difficult, putting that much more pressure on valuations (less capital chasing the investment opportunities).

In terms of ASEAN, there are however some factors that might mitigate the pain – the relative infancy of fintech investing (therefore less downside), the significant presence of family offices (whose capital pools tend to be longer term in nature), as well as government programs to grow the ecosystem (most notably in Singapore, although a stock exchange for startups was just announced in Thailand).

The second perspective is that of the financial services companies, who represent both competition and potential customers for the fintech companies. For banks, increasing interest rates often lead to a one-off margin expansion (due to the relative stickiness of deposits) but also an increase in bad loan provisions and a decrease in new loans. Capital markets have a mixed reaction to increased volatility as volumes typically increase (good for investment banks) but valuations typically decline (bad for asset managers). All of these companies will be looking for ways to reduce costs and reach new customers – exactly where fintech startups are focused.


There are a very large number of domestic and regional financial institutions in ASEAN, many of whom are only just starting to wake up to the transformative possibilities that techfin can bring to their business. There are of course other financial services companies who are actively (and proactively) investing in the ecosystem (funding accelerator programmes, hiving off internal teams to focus on fintech, enabling proof-of-concept trials, etc). There will likely be a further stratification between the “haves” (regional players who are investing human and financial capital in fintech) and the “have-nots” (often domestic players who are lagging in their fintech knowledge and efforts). The good news for the latter group is that a “rapid follower’ strategy can be effective, assuming they build up their internal integration capabilities.

The third – and most complex –  perspective is that of the fintech company. Fintech investors will be looking for safe haven regimes and sectors (less regulatory and policy uncertainty), firms with regulatory tailwinds (think regtech and risk management), firms with shorter product development and business development ramp-ups (likely due to existing client relationships), and firms which can extend their capital runway by raising more capital and/or operating a lean cost base (likely to involve a bootstrapping mentality). Conversely, fintech investors will shy away from uncertain regulatory regimes, firms that require regulatory approvals, firms with long product and business development cycles (think proof-of-concept, new technologies, integrated systems), and firms that have a high burn rate.


There are therefore two broad groups of likely fintech “winners” in ASEAN. The first group are the homegrown startups which combine some technological skills with industry knowledge (of pain points, regulatory situations, and processes) to address a specific product/market segment. They will be nimble, well-funded, and focused. The second group are growth stage companies that are expanding into ASEAN from the US, Europe, or elsewhere in Asia. They will typically bring an established and proven product or service, a defensible competitive moat, an existing client base, revenue, an established management team, and a strong regional partner.

In summary, two Chinese adages come to mind. The first is “may you live in interesting times” – which seems to be self-evident for the next few years. The second (paraphrased) is that in any crisis, there is danger but there is also opportunity – something that ASEAN fintech investors, financial services companies, and fintech startups in ASEAN would do well to remember.