Emergence of Fintech and the Lasic Principles

17 Pages Posted: 1 Oct 2015

See all articles by David Kuo Chuen Lee

David Kuo Chuen Lee

Singapore University of Social Sciences (SUSS); National Univeristy of Singapore; Shanghai University of Finance and Economics

Ernie G. S. Teo

NUS Business School

Multiple version iconThere are 2 versions of this paper

Date Written: September 30, 2015


Financial technology (FinTech) has been receiving much attention lately. For instance, global investments in FinTech ventures (covering sectors from remittances, loans to payments) have grown 3 times from US$ 4.05 billion in 2013 to US$ 12.21 billion in 2014 (Accenture, 2015). Although the development of FinTech is still in early stages, they will define and shape the future of the financial industry. Even though there are large amounts of funds entering the market, not all FinTech ventures will be successful; various factors (both internal and external) are crucial. We identify some of these factors which we term the LASIC (Low margin, Asset light, Scalable, Innovative, and Compliance easy) principles. We start by explaining the LASIC principles and then use them to discuss two examples of successful FinTech firms (Alibaba and M-PESA). FinTech will bring about lower business costs and profit margins; we will also discuss the benefits of investing for financial inclusion in the final section of this paper. In order to remain sustainable and profitable, enterprises will need to expand their business by embracing financial inclusion. There is an estimated 38% of the world population that has no formal bank accounts and another 40% that is underserved by banks, providing a huge potential market for financial institutions.

Keywords: FinTech, LASIC, Alibaba, M-PESA, Financial Inclusion

Suggested Citation

Lee, David Kuo Chuen and Teo, Ernie G. S., Emergence of Fintech and the Lasic Principles (September 30, 2015). Available at SSRN: https://ssrn.com/abstract=2668049 or http://dx.doi.org/10.2139/ssrn.2668049

David Kuo Chuen Lee (Contact Author)

Singapore University of Social Sciences (SUSS) ( email )

461 Clementi Road
Singapore, 599491

National Univeristy of Singapore ( email )

1 Business Link
Singapore, 117592

Shanghai University of Finance and Economics ( email )

Shanghai, 200433

Ernie G. S. Teo

NUS Business School ( email )

15 Kent Ridge Drive

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