SEA FinTech Has Only A 3.1% Penetration Of AI & ML

2 mins read

31 March 2023

The fastest implementation of AI&ML occurs in the Digital Insurance, Digital Accounting and Digital Banking sectors. Singapore is the most active country in the use of AI in FinTech, according to the research by Robocash Group.

In 2022, the share of FinTech companies in the SEA region officially using AI and ML technologies in their stack reached 3.09% (807 out of 26,105 companies), steadily increasing from 2.88% in 2020 and from 3.03% in 2021.

The Digital Insurance sector holds the highest penetration rate of AI&ML technologies. The number of companies using AI&ML in this sector is growing at an average of 35.6% per year. This is followed by the Digital Accounting (33.5%) and Digital Banking (31.5%) sectors.

Other FinTech industries have seen the following average increase in growth: Cryptocurrencies & Blockchain – 28.7%, Digital investments – 21.4%, E-Commerce – 19.4%, Alternative Lending – 19%, Business management – 18%, HR & Payroll – 17.8%, Cybersecurity – 17.5%, E-Wallets – 17%, Payments & Transfers – 15.4%, Financial Advisors – 14%.

Singapore currently has the highest rate of AI&ML penetration in FinTech, at an impressive 5.36%. The country has seen a high overall economic development (about 0.5% of world GDP). Also its level of digitalization is one of the highest in the region: in 2022, 97% of the population had internet access, 94.4% had smartphones, and 97% had financial accounts. Lastly, there is a high level of private investment in FinTech (1.4% of all time in the world) and in AI technology (0.7%).

Laos also showed a high AI&ML penetration rate in FinTech at 4.08%. The development of FinTech is still in its infancy in Laos, with only 49 companies out of 26,105 in the region. Therefore, even a small penetration of AI & ML in the FinTech sector can be considered significant in this country.

Robocash Group analysts comment: “Artificial Intelligence & Machine Learning integration in the Southeast Asian FinTech domain went through its peak period between 2016 and 2019. The FinTech world has attained a “plateau”, though it may not last for long. Businesses are beginning to leverage the potential of AI&ML actively. This can result in an improved output. Nevertheless, AI and ML-based technology are not a one-size-fits-all solution that can guarantee success itself. So businesses must tailor them to their own operations and objectives to reach the greatest possible benefits.”