Bangladesh least active fintech country in Asia Pacific: Report

Bangladesh has ranked 78th among 83 countries in the Global Fintech Index 2021, indicating that the country is falling behind in terms of using technology to automate and digitalise financial activities.

It slipped 17 notches in the global ranking compared to the previous index, and currently ranks lowest out of 16 countries in the Asia Pacific region. Dhaka ranked 225th out of 264 cities globally, while New Delhi became the only South Asian city to secure a place in the top 20.

The index was released on 23 June by Findexable, a London based global research and analytics firm, in partnership with Mambu – a market leading cloud banking and financial services platform. It covers the entire 2020 and the first half of 2021.

The United States, United Kingdom and Israel are the most active fintech countries globally, while Singapore, Australia and China topped the Asian ranking.

Fintech refers to the application of internet, software and mobile apps for daily financial transactions. Some of its key components are artificial intelligence, Big Data, Blockchain and Cryptocurrency.

First published in 2019, the Global Fintech Index now covers 264 cities in 83 countries incorporating data from Findexable's own records, collated and verified by its Global Partnership Network that includes Crunchbase, StartupBlink, SEMrush and more than 60 other Fintech associations worldwide.

The ranking scores were based on 3 domains – the quantity of privately owned fintech companies, the quality of those companies and the local business environment.

According to the report, the largest improvement in Asia Pacific occurred in New Zealand and Taiwan, while Vietnam, Bangladesh and Thailand experienced the greatest drop in the ranking in this region.

Japan, India, South Korea, Philippines and Pakistan respectively ranked 4th, 5th, 6th, 11th, and 15th in the region.

Becoming more geographically diverse

In terms of cities, the San Francisco Bay, London and New York are the top three in the ranking. It is expected as they are the global centers of development. A country or city must host the headquarters of at least 10 privately-owned fintech companies to enter the list.

Despite the economic slowdown caused by the pandemic, 50 new cities and 20 new countries debuted in the ranking, which is a remarkable milestone to achieve.

African countries, particularly sub-Saharan ones joined the list this year, which made the fintech industry more diverse. Seychelles, Rwanda, Tunisia, Zimbabwe, Somalia, Cameron and Ethiopia are the African states debuting in this year's ranking.

In Somalia, barely 20% of the population holds a bank account. The state was plagued by decades of civil wars and their central bank only reestablished in 2009. Even this country now has headquarters of at least 10 privately owned fintech companies.

Riyadh, Montevideo, and Detroit are the top three cities to experience the highest growth in the ranking.

Riyadh is the most populous and wealthy state in the Gulf region, which allowed fintechs to scale fast and attract capital. In Montevideo, the growth in the fintech industry was largely based on the growth of a unicorn named dLocal that raised $350m during the pandemic.

A unicorn company, or unicorn startup, is a private company with a valuation over $1 billion.

The needs of specific populations are being served as more fintech companies have been founded in a greater range of locales from Flutterwave in sub-Saharan Africa to the digital currency launched in the Bahamas.

Providing an explanation, Findexable's founder and CEO Simon Hardie said, "The level of investment and activity in the fintech sector is hugely gratifying for those of us who have been championing the industry.

"It is especially good to see that the pandemic didn't slow down, and may have in fact accelerated, the adoption of fintech in parts of the world that have previously been underserved."