This article was first published in the May 2016 China edition of Accounting and Business magazine.

Is there a fintech – financial technology – revolution going on in Asia? And if so, what does it mean for finance professionals? We recently wrote about fintech in CFO Innovation, exploring these internet-enabled platforms that offer alternatives to banks and other established players in payments, business lending, insurance, market money funds and other services.

Our conclusion: yes, it is real, and fintech can have a significant impact on corporate financial management. ‘CFOs will do well to study the nascent fintech pioneers not only for fund-raising,’ we wrote, ‘but also to find more options for unlocking hidden value in the balance sheet and better utilising cash, as well as stopping the “leakage” which comes from clunky and inefficient systems.’ 

In a recent ACCA-supported study, Harnessing Potential: Asia-Pacific Alternative Financing Benchmarking Report, researchers found that the region’s market for alternative finance services reached US$103bn in 2015 – up 323% from 2014, with most transactions in China. That is nothing compared with traditional services – according to data from the Asian Development Bank, corporates raised US$16.3 trillion in the region’s local-currency bond markets alone last year. However, wrote researcher Kong Ying of Tsinghua University, ‘Services like crowdfunding, online payments, web-based credit analytics and peer-to-peer lending are expanding their reach into all sectors’.

Should you jump on this bandwagon? It certainly would not hurt to study what is on offer. In my view, the following alternative providers are worth looking into, particularly the analytics providers that promise faster, cheaper and easier ways to crunch data to produce business insights.

  • Marketplace/peer-to-peer business lending. Companies can tap individuals and institutions for loans through an internet platform like Lufax in China, Capital Match in Singapore and GoLend.hk in Hong Kong.
  • Balance sheet business lending. The internet portal extends a loan to a company on the basis of its online behaviour, transactions and business data. The providers include Kabbage and Kikka Capital in Australia.
  • Invoice trading. Fintech players buy purchase invoices and receivable notes at a discount from companies, remitting the proceeds instantly online. Providers include Crossflow Payments and InvoiceInterchange in South-East Asia.
  • Equity-based crowdfunding. Providers in South-East Asia include OurCrowd and Crowdo.
  • Online payment. Providers such as Alipay.com in China and MOLPay in South-East Asia offer third-party online payment platforms.
  • Procurement. Providers such as Ariba and Invapay offer end-to-end online solutions from purchasing and e-invoicing to payments management, reconciliation and analytics. 
  • Analytics. Providers like IBM Watson Analytics and Palantir link up with a company’s enterprise resource planning and other systems to enable data visualisation, predictive analytics, integration of different internal and external data sources, modelling, algorithmic processing and other knowledge processes. 

A note of caution: fintech plays in the online space, so there are security issues. Don’t forget to do your due diligence – but also remember that those ahead in the game could enjoy a competitive edge. 

Cesar Bacani is editor-in-chief of CFO Innovation