While Taiwan is best known as the world’s leading manufacturer of semiconductors for the global marketplace, this country is also a thriving tech hub that continues to shape a number of emerging technologies.
However, when it comes to the growing fintech market, Taiwan continues to fly under the radar when compared to other Asian nations. The market in Taiwan also faces some significant challenges, but there ‘s undoubtedly plenty of opportunity for growth in the future.
We’ll explore this further below, while asking how continued investment is continuing to impact on fintech adoption in Taiwan.
What are the Challenges Facing Fintech Growth in Taiwan?
One of the biggest challenges facing fintech adopters is the highly regulated nature of Taiwan’s financial sector, which also impacts on both institutional and independent forex traders.
In fact, many argue that the nation’s financial regulators typically adopt an overly prudent approach, which tends to prioritise fiscal stability over innovation and subsequent growth.
This is best embodied by Taiwan’s approach to the cryptocurrency market, as while the authorities did introduce a fintech regulatory sandbox in late 2017 (and subsequent rule changes), this has yet to activate investment when compared to neighbouring regions such as Hong Kong and Singapore.
The underlying issue here is a fundamental scepticism of fintech products such as various cryptocurrencies. It may also be an issue of marketing, not least because financial technology products are promoted as being collaborative in Taiwan rather than disruptors that can actively improve processes and a host of consumer experiences.
Of course, we’ve also yet to see a single unicorn emerge amongst the region’s fintech startups, and this compounds the perception of new technologies in the marketplace and provides little motivation for aspiring companies.
Increased Investment and Opportunity in Taiwan
Despite this, fintech growth and adoption and grown steadily in Taiwan, laying the foundation for more exponential expansion in the future.
This is being driven by consistent levels of investment over time, with Taiwan reporting a total financial commitment of approximately $170 billion in 2019. While we need to see much more of this invested directly into the fintech market and its associated startups, there’s no doubt that the region remains a viable technology hub for international participants.
There’s also considerable opportunity for a handful of fintech startups in the region, with just five of the leading entities in Taiwan raising more than $1 million each over the course of the past 12 months alone.
What’s more, these businesses have forged lucrative international partnerships with more established and like-minded brands, blazing a trail for steeper growth levels in the near-term.
There was also a genuine breakthrough in the market last summer, when the FSC in Taiwan issued three digital banking licenses for operations in the region. This is part of a wider goal to accelerate the rate of contactless payments to 90% by the year 2025, with this trend increasingly prevalent in the Asian marketplace.