Southeast Asia is in the midst of a transition from fintech 1.0 to fintech 2.0. Fintech 1.0, which was all about digitizing traditional financial services, has been a huge investment trend, and generated over $118 billion in VC investment in 2018 alone. Whilst this process of digitizing financial services is by no means finished, a new wave of fintech is growing rapidly. This second wave of fintech is about embedding financial services in any product, at any place, at any time. In addition to other native building blocks for technology companies, like cloud, the internet, and mobile devices, embedded fintech becomes a building block in any business. As countries in Southeast Asia roll out real-time payment systems (with instant settlement) and digital identity protocols, these embedded financial services are set to grow dramatically in the next five years.

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Written by Christiaan Kaptein, Partner at Integra Partners.