As Asia’s economy continues to grow and change, Australian fintechs should be looking beyond Surry Hills start-ups, to emerging economies.


With the best of the mining boom in the rear view mirror of history, the Australian economy must end its dependency on the resource sector, and find other, supplementary sources of revenue.

A pivot to services

Balaji Swaminathan, Westpac’s General Manager of the Asia region says Australia is moving away from “a mining economy to a dining economy” as it enters into its fourth wave of engagement with Asia.

“In some ways, the whole shift is going to happen from exporting mining to food, water, healthcare and education,” he says.

While much attention has been paid to the investment opportunities that have been created by Asia’s emerging middle class, Mr Swaminathan says “what is middle class for Australia is not middle class for Asia”. More than 1.1 billion people across Asia’s lower middle classes are only just emerging from poverty and require milk, basic food - fruits and vegetables and some meat - education and basic healthcare. 

“Then there is the upper-middle class who desire luxury goods, travel and better healthcare,” he says. 
“My advice is to align buying behaviour to the particular category you’re going into and the country you are relevant to.”
Asia now provides seven out of our top 10 SME exporter destinations

Some opportunities

Mr Swaminathan also says there are opportunities in aged care and retirement products as the need to keep large families together presents challenges for town-planning, architecture and interior design.

“An ageing population means having access to a pension, superannuation or having a nest egg for you later in life. If you look at newspapers in Singapore, you will find ads every day by companies saying ‘save money now for your retirement’. You wouldn’t have seen that 10 years ago. But now you see them everywhere.”

Economist Tim Harcourt says the changing nature of global supply chains and open regionalism will present new opportunities of engagement for Australian small and medium sized enterprises.

“Asia now provides seven out of our top 10 SME exporter destinations,” says Harcourt.
Any successful expansion into Asia will require consultation and understanding of the local cultures
“Whilst the first waves of our engagement with Asia have been focused on ‘rocks and crops’ (mining and agriculture), steel and iron ore, and pumping LNG offshore to the region, services will now play a more important role.”

While ‘Rocks and crops’ will continue to provide the lion’s share of our export revenue to Asia, the economist says our ‘points of engagement’ will expand as services, tourism and trade promotes broader and deeper people-to-people relationships.

However, any successful expansion into Asia will require consultation and understanding of the local cultures which the Lowy Institute’s Peter Cai says can be restrictively expensive.

China in particular needs help developing better technology, management skills, research abilities and talent management, he says.

“They are in the stage of trying to climb up the value-add chain,” Cai says. “There are opportunities for foreign companies to support these new markets.”

The research cited “significant opportunities” in health, education, rail, internet and strategy, big data and analytics, as well as advanced manufacturing. “If you can help Chinese companies go global, you put yourself in a strong position,” he said.

However, a weakness of the Australian market, is its tendency to homogenise Asia as one market. Mr Swaminathan emphasised the importance of understanding that “Asia is not one country”.

“It’s across China, Philippines, Malaysia, Vietnam: all with different cultures and demographics, different proportion of ageing populations and systems whose equality differs. How we deal with these countries will be to fill a need. What works for China will not work for India and Malaysia”.
This article represents the views and opinions of the author and do not necessarily reflect the opinions of BPAY.
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