A recent survey finds that only 3.1% of South-East Asian financial companies use AI and ML, despite their huge potential.

Fintech companies in South-East Asia only use artificial intelligence (AI) and machine learning (ML) for 3.1% of their operations, which shows the technology’s enormous potential. Despite a plateau, South-East Asian fintech is starting to embrace AI and ML, but to fully reap the rewards, its use must be operation- and objective-specific.

The findings of the most recent analysis by the Robocash Group into the regional adoption of these technologies, including who and where it’s being applied most effectively, strongly support this assertion. Based on the proportion of 26,105 regional fintech companies that have AI and ML tools in their technology stack, it made its evaluation.

Top players

Singapore had the highest rate of AI and ML adoption in the fintech industry out of the examined nations, which also included Thailand, Malaysia, Bangladesh, Indonesia, Cambodia, Philippines, Vietnam, Laos, Burma, and Brunei.

The findings ascribed the city-particularly state’s high degree of digitalization and private fintech investment in AI to the fact that 5.36 percent of fintechs there have the technologies in their stack in 2022.

Additionally, the nation’s total economic growth, which accounts for around 0.5% of global GDP, has been very strong.

As a result, the research calculates Singapore’s penetration to be 807 firms, or 2.27 percent higher than the SEA average of 3.09 percent. In all, 97% of its residents had access to the internet in 2022, and 94% had smartphones and 97% had bank accounts.

Singapore thus benefits from a setting that encourages the deployment of cutting-edge technologies.

The study also notes Laos, located 1300 miles distant, for having an equally encouraging 4.08 percent fintech AI and ML penetration rate.

With only 49 enterprises out of 26,105 in the region, Laos’ fintech development is still in its infancy, making even a little penetration in the market important.

Sector research

The adoption of AI and ML technologies is strongest in the digital insurance sector, where the number of organizations adopting the technology is increasing at a rate of 35.6% annually on average. As an illustration, take the partnership between general insurer MSIG Singapore and AI company Fermion Merimen in February of this year to fight auto insurance fraud.

The digital banking and accounting sectors, both at 31.5 percent, are just behind this.

The study acknowledges the wider scope of adoption occurring throughout the fintech landscape in SEA, pointing out average gains in cryptocurrencies and blockchain at 28.7%, digital investments at 21.4%, and e-commerce at 19.4%.

The e-wallet, payments & transfers, and financial advisory sectors all had below-average performance rates of 17, 15, 4, and 14%, respectively.

Constant growth

The study’s numbers, which include the 3.09 percent 2022 SEA average for AI and ML penetration, are modest, but they are part of an overall rise in the adoption of the technologies in the area.

Previous to its most recent findings, the Robocash Group calculated the average penetration to be 3.03% in 2021 and 2.88% in the year prior.

Robocash Group researchers claim that, despite this, “AI and ML integration in the SEA fintech area went through its peak era between 2016 and 2019.”

Analysts advise that the “fintech world has reached a peak,” albeit it might not endure for long.

Fintechs in SEA are undoubtedly starting to actively exploit the capabilities of the technology, which, according to Robocash Group, “may result in a better output.”

In addition, it emphasizes that “companies must adjust them to their own operations and aims to attain the highest possible benefits,” adding that “AI and ML-based technology is not a one-size-fits-all solution that can guarantee success itself.”

South-East Asian AI and ML Potential
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