#1Supported by: MBI MEKONG BUSINESS INITIATIVE 50 YEARS Australian ADB Aid Report on Financial Technology- (FinTech) in Cambodia Oddar Meanchey Preah Vihear Stung Treng Ratanakiri- Banteay Meanchey Siem Reap Battambang Pailin Pursat Kampong Thom Mondulkiri Kratie Kampong Kampong Chhnang Cham Tbong Kmoum Phnom Penh Koh Kong Kampong Speu Kandal Prey Veng. Svay Riêng Takeo Kampot Preah Sihanouk Kep#2Financial Technology (FinTech) in Cambodia Setting the scene The term 'FinTech' is both relatively new and under- estimated term in Cambodian financial service industry in recent years. As FinTech is getting more traction and attentions, financial institutions are looking closer at the threats and opportunities of FinTech; and the key regulators are also keen to understand more about this new players. This report - informed by open-ended interviews with companies across the Cambodian FinTech spectrum, extensive secondary research, and reviews of key industry experts - is an endeavor to better understand the current FinTech developments in Cambodia. This report is structured in the following content: 1. The perfect storm 2. Cambodian FinTech Ecosystem 3. FinTech in Cambodia#3The key enablers of Cambodian FinTech Firms Gap between financial services needs & formal supply Accelerating Technological advancement & adoption 3-FinTech In Cambodia#4The Perfect Storm Factors >$24 Billion Gap between financial services needs & formal supply Customer Needs (Products) Needs vs. Formal Supply Gap (of Target Segment, US$ Billion) Formal Supply PAYMENTS/ TRANSFERS Needs 3.3 Individual MSME Formal Supply Needs 1.9 2.2 4.2 SAVINGS 5.4 8.3 The potential impact of Digital Finance Applications >$2 Billion Additional electronic payment flows 26.7 22.5 Formal Supply Needs Individual 3.8 MSME 3.2 7.0 CREDITS 9.7 -2.7 Source: ADB. (2017). Accelerating Financial Inclusion in South-East Asia with Digital Finance. It is important to note that this research focuses on financial exclusion in three segments: base of pyramid (BOP); women; and micro, small, and medium enterprises (MSMEs). Hence, the gap and impact might be bigger if all constituents are included >$1 Billion Additional credit uptake >$3 Billion Additional Saving Mobilization 4-FinTech In Cambodia#5The Perfect Storm Factors Accelerating Technological advancement & adoption TOTAL POPULATION ++++ 16m INTERNET USERS 7.16m +43% since Jan 2016 (+2m) with 45% penetration rate 49% Urbanization: 21% (with the annual rate of change 2.65%) More than 50% of population under the age of 25 with high adoption rate of technology MOBILE SUBSCRIPTION 27.60m +6% growth and 173% compared to total population 4.5 MILLION mobile users connected to Facebook INFRASTRUCTURE QUALITY & ACCESS The advancement of next-generation technology provides a level playing field for FinTech firms allowing them to not worrying about inflexible legacy systems, (regulation) and siloed channels. This has lowered the barriers to entry. Cost advantage is on the FinTech side. 46% 5% Laptops & Desktop Mobile Phones Tablet Devices 3G 4G 3.4M 660K 440K Wi Fi 4G 4 Mobile Operators 8 Internet Service Providers Source: World Fact Book (cia.gov), wearesocial.com/uk/, Facebook Inc. G-SMA Intelligence, Geek in Cambodia 5 FinTech In Cambodia#6Cambodian FinTech Ecosystem For the purpose of this report, we will look at FinTech Ecosystem in four integrated domains, which are Growth Compliance CREATORS REGULATORS SUPPORTERS ENABLERS 6-FinTech In Cambodia#7MEKONG BUSINESS INITIATIVE 0 0 Investments/ Smart Grants Corporates in FinTech/ Innovation Digital Innovation Fund innovations against poverty Smart + Smart LUY Smart‣ Digital Innovation Fund ENABLERS cic Angel HUB BEYOND INVESTMENT OPPORTLINITY A លីហរ + H អាយ Ty Hour Gromp metfene + កាន់តែជិតស្និទ្ធ closer e Collaboration + SORAMITSU ស sabay + ស money cic + BEYOND INVESTMENT OPPORTUNITY wallet SUPPORTERS Business Associations & Development Partners សមាគម សហគ្រិន វ័យក្មេងកម្ពុជា YOUNG ENTREPRENEURS ASSOCIATION DE CAMBODIA Australian 50 YEARS ADB Aid MBI Co-Working Space for FinTech Startup Accelerators & Incubators for FinTech Events/ Meetups สอ Media Startup Weekend Phnom Penh Fintech Edition Powered by Google for Entrepreneurs NEXT MONEY PNH startupbootcamp Office Hours FinTech & Social Financial Institutions in FinTech/ Innovation Technology Infrastructure ABA BANK ភ្លាសាលជ្ជសាស្ត្រ ៖ អេស៊ីលីដា ACLEDA ACLETIA INSTITUTE OF B ស៊ីលីដា Maybank RHB◆ Ⓒwing Ank P PhillipCapital Your Partner In Finance 4 Mobile 8 Internet Service Providers 4G LTE Operators Gasks The Phnom Penh Post in Cambodia Universities & Academia 0 * ហិរញ្ញវត្ថុ Ministry of Economy & Finance REGULATORS National Bank of Cambodia 7- FinTech In Cambodia#8FinTech in Cambodia For this report, Cambodian FinTech Startups are grouped mainly within the financial industry verticals. It is important to note that these verticals' list are not exhaustive. It is only intended for the scoping of FinTech in Cambodia. Loan Comparison Site for MFIs & Operators SPEAN Innovative Core banking Morakot my Innovative Institutional ABA Tools BANK Maybank Blockchain SORAMITSU ソラミツ Functions of Financial Service Industry PAYING • Mobile Wallet e money (អេស៊ីលីដា ACLEDA . • . Money Transfer/ Remittance Gateways/ Alternative Payments P2P Payment Card Processing/ POS FRADAC ប្រាសាក់ FINANCE Mountian 0 FINANCING Alternative Credit Decision & Monitoring Smart LUY (អេស៊ីលីដា ទាន់ចិត្ត 5516 ASIA 5555 WET LUY true money លីហ្វរ A វេរលុយ Wing Ank Bongloy D Lending ប P2P BanhJi CNB MBanking Analytics/ Identity/Risk 0 INVESTING O 18 INSURING Invoice Discounting & wallet 5. សេវាទូទាត់រហ័ស Kiu 111 Κυ BIMA 8- FinTech In Cambodia#9Conclusion 1. Regional Recognitions startupbootcamp FinTech Ü Morakot Simply BanhJi Innovative 2. Inclusive FinTech 3. Corporate investment 4. FinTech provides platform for other industry growth 5. Saving & Insurance is the next areas of great potential FinTech is not disrupting Cambodia's financial services, It is joining its development 9- FinTech In Cambodia