Trends and risks of development of the Fintech market in the Asia-Pacific region on the example of alternative lending

Abstract

The article attempts to identify and systematize trends and risks in the development of the alternative lending market in the countries of the Asia-Pacific region. Alternative lending as a segment of financial technology market (Fintech) in Asia has significantly increased its share in the global market over the past 5 years. During the period from 2017 to 2018, the share of Asia-Pacific countries increased in all 4 key Fintech segments. The research methodology is based on the methods of statistical data analysis, comparative analysis and correlation analysis. As a result of the analysis, the author identifies three main trends: an increase in the level of internationalization of alternative lending, an increase in the role of large technology companies (BigTech) in providing financial services to the population, and outsourcing of storage and client data processing to third parties. Along with these trends, new emerging risks may have an impact on financial stability in Asian countries: the risk of spillover onto other participants in the financial sector, procyclicality and the risk of moral hazard for systemically important organizations, etc. The author comes to the conclusion that in order to minimize the effects of fraud risk as well as other key risks, it is worth introducing a special regime regulating alternative lending in the country.