Positive Impact of Fintech on Bhutan

Email

“Fintech is a disruption to be embraced,” this view was echoed by the digital pioneer Taizo Son.

Positive Impact of Fintech on Bhutan. (Source: www.forbesmiddleeast.com)

 

By Curtis S. Chin & Jose B. Collazo | Kuensel

 

Bhutan might not yet be included in the list of major fintech influencers in Asia. Its giant neighbours, China and India are more likely to come to mind first.

But across Asia, in nations large and small, the benefits of addressing the digital divide and of harnessing the power of fintech should be clear-cut. Taken together, both of these steps can increase the level of access to capital and financial inclusion — critical needs when it comes to developing Asia, including Bhutan. 

Yet, from block chain to crypto currencies such as Bitcoin and Ethereum, as well as Initial Coin Offerings or ICOs that allocate “tokens” as a new means of crowd funding capital, the language and disruptions buffeting the mainstream banking and financial services industry can seem overwhelming.

What is Fintech?

According to Fintech Weekly, the term 'fintech' stands for Financial Technology. It describes a business that aims to provide financial services by making use of software and modern technology.

Today, fintech companies directly compete with banks in most areas of the financial sector to sell financial services and solutions to customers. Mostly due to regulatory reasons and their internal structures, banks still struggle to keep up with fintech start-ups in terms of innovation and speed.

Fintechs realised that financial services of all kinds – including money transfer, lending, investing and payments need to seamlessly be integrated into the lives of the tech-savvy and sophisticated customers of today to stay relevant in a world where businesses and private life become increasingly digitalised.

Especially for the millenials who prefer quick and easy banking services over walking to a branch, making appointments with bank consultants to go through lengthy processes of setting up accounts.

While in fact such services can now easily be conducted using mobile and digital banking services which allow for a more frictionless and stress-free process.

Thus broadly defined, “fintech” is a shorthand for the technologies that are delivering innovations as well as new challenges and opportunities to the once staid banking and finance sectors. It has also enabled the rise of new companies and transformative businesses.

Last month, the Milken Institute co-hosted a “Future of Finance” roundtable with Thailand’s central bank. It will also be a key topic at the 21st annual Milken Institute Global Conference in late April in Los Angeles. The main focus is on the challenges of “navigating a world in transition.”

A global transformation is under way, disrupting traditional social and economic foundations, and heralding an era of change and challenges.

Yet, as Bhutan’s policy makers seek to shape a better business environment, this transformation should not be feared by established players, particularly in the banking and finance sectors.

Looking back, just as businesses and consumers overcame fears and concerns about the advent of disruptions wrought by the Automated Teller Machines, or ATMs, the fear of technology’s impact on an evolving finance industry should not hold back change.

“Fintech is a disruption to be embraced,” this view was echoed by the digital pioneer Taizo Son. 

The power of Fintech according to Taizo Son

“We are strong believers in the power of digital transformation evoked by token economies and fintech innovation,” said Son, investor and founder of Mistletoe, a hub for start-ups and an overall entrepreneurial ecosystems. Taizo is the youngest brother of another tech pioneer, Softbank’s Masayoshi Son.

“However, such technologies also hold the potential to promote the already widening income gap in our society,” said Taizo Son.

 

Source: http://mistletoe.co/en/

 

“As entrepreneurs and architects of innovation we need to be aware of the important role we play in building a society that remains empathic and inclusive to all people in this era of increasingly autonomous technology.”

Ensuring that Fintech will create positive impact in Bhutan and Asia at large

Indeed, at a time of growing inequality, how do we ensure a positive, meaningful impact of fintech on the people of Bhutan and across Asia?

With little to no access to formal banking services, too many people in Asia go without the basic protections of a savings account. They may also face relatively higher costs for sending or receiving money. According to the World Bank, remittances were valued at US$236 billion in 2016 in Asia.

“Having access to basic financial services can reduce hunger, increase education and generally improve the quality of life,” said Queen Máxima of the Netherlands, UN Secretary-General’s Special Advocate for Inclusive Finance for Development, in her speech to attendees at the Singapore Fintech Festival 2017.

“I am convinced that fintech’s greatest achievement will be not just helping the unbanked, but also the under-banked — individuals who have insufficient access to financial services—to live a better life,” adds venture capitalist and fintech influencer Spiros Margaris.

Yet, the sustained benefits of fintech will only be realised if a proper ecosystem is created and maintained – one that addresses the concerns of regulators while benefiting innovators and most importantly, consumers. 

Creating a better business climate through Fintech in Bhutan

Narrowing the digital divide will also continue to be a fundamental need, with increased mobile phone ownership and internet penetration remaining key factors in spurring consumer adoption of mobile financial services. Better access to capital and easier payment systems are critical elements to a better Bhutan business environment. 

Indeed, the true measure of success for fintech in Bhutan and elsewhere should not be deal size or quantity but in expanded horizons. For example, true success is achieved when fintech helps once-poor farming communities access funds to bring their crops to market, or helps small shopkeepers to grow bigger, or provides seed money for a young entrepreneur ready to turn a great idea into a concrete reality.

Beyond the fintech hype and jargon, the human element of financial technology should not be forgotten in Bhutan as this nation too moves forward. Future assessments of fintech must go beyond counting fortunes made and businesses being disrupted or created. It should also include a measure of how every Bhutanese has benefited. 

 

Curtis S. Chin, a former US Ambassador to the Asian Development Bank, is managing director of the advisory firm River Peak Group, LLC and an Asia Fellow at the Milken Institute. 

Jose B. Collazo, a Southeast Asian analyst, is an associate with River Peak Group, LLC.  Follow them on Twitter at @CurtisSChin and @JoseBCollazo.

 

This article first appeared in Kuensel and has been edited for the Daily Bhutan.

 


Related Posts

Techstars Startup Weekend Bhutan (Eco-Tourism): 54 Hours where...

The eventful weekend saw 130 keen people in attendance, of which 56 pitched ideas. This was the fifth time that such an...

Nov 29, 2017 08:46

Top Five Business Ideas Bag Grants at National Start-up Weekend

Prime Minister Tshering Tobgay said during the prize awarding ceremony that although the government has been promoting...

Mar 20, 2018 22:53

Bhutan National Start-Up Weekend Begins

The MoIC Minister DN Dhungyel said that there is a need to change the expectations of youth who thinks that the...

Mar 17, 2018 12:05

Start-ups in Bhutan Will Benefit with More Funding

“However, in Bhutan most start-ups can’t do much marketing because of financial constraints.”

Apr 07, 2018 18:00

Chharo App to Facilitate Cashless Transactions

Chharo is the first e-wallet to be introduced in the country. It is an e-wallet application available for free download...

Feb 19, 2018 14:45

Starting a Business at the Global Entrepreneurship Week

An industry can be classified as a manufacturing, construction or service industry. The Regional Trade and Industry...

Nov 19, 2017 10:43

Latest

News

Co-Funded By The EU, [email protected] Project Launched To Provide High Speed Internet For Bhutan’s Research And Education Communities

A high-speed network called DrukREN for research and education communities in Bhutan was also launched.

Aug 21, 2019 09:58

Find Innovative Solutions For Every Challenge: Prime Minister Modi To Bhutan’s Youth

Prime Minister Modi said that he ‘sees dynamism and felt energised’ while meeting with the future of Bhutan.

Aug 18, 2019 23:58

Features

Bhutan Women Parliamentary Caucus Launched To Promote Gender Equality

It is expected to address the need for women role models at leadership and decision-making levels in Bhutan.

Aug 20, 2019 17:08

Fulfilling His Majesty The King’s Vision, Digital Drukyul Is Set To Improve Public Service Delivery And Empower Citizens Digitally

Digital Drukyul will help create a digital ecosystem for citizens which is unencumbered by bureaucratic red tape.

Aug 19, 2019 15:28

Sports

Two Young Bhutanese Swimmers Competed In 18th FINA World Championship

The duo are proud to represent Bhutan and compete on a worldwide stage for the first time.

Jul 28, 2019 21:32

Bhutan’s Dragon Boys Starts FIFA World Cup Qualifiers With A 1-0 Win Over Guam

Midfielder, Tshering Dorji’s 35th minute strike was enough to make Bhutan win the first leg of the first round of the 2022 World Cup and...

Jun 08, 2019 22:18

Business

Southeast Asian Company Invests Over US$100,000 In Bhutanese Start-up Drukfood

The investment includes a mix of cash and investment-in-kind.

Aug 15, 2019 14:26

Bhutan’s First Crowdfunding Platform Gaining Traction, Opens Doors For Entrepreneurs To Raise Funds

So far, three promoters - Bhutan Alternatives, Freelancer Bhutan and Himalayan food have registered with the Bhutan crowdfunding platform.

Aug 05, 2019 22:10

Travel

7 Facts You Never Knew About Flying Into Bhutan

Druk Asia interviewed Namgyal Wangchuk, Senior First Officer with Drukair to find out what it's like to fly into Paro International Airport.

Aug 07, 2019 23:18

Bhutan Has Great Potential To Be A Top Eco-Tourism Spot: Albert Teo

Despite Bhutan being home to a wide array of flora and fauna, it is still not a top ecotourism destination.

Jul 19, 2019 23:58

Lifestyle

Finding One’s Voice: Rapping In The Kingdom Of Bhutan

The lack of support for rappers stems from the general misconception that most people have about rap.

Aug 10, 2019 23:38

First Bhutan-Bollywood Film Collaboration - Rolong: Make the Dead Walk In The Making

The film is expected to hit the theatres by the middle of 2020.

Aug 04, 2019 23:58

Subscribe to our newsletter

Never miss out on new happenings and news stories!