This is as fintech lowers costs significantly, and can thus bring more people into the financial system.
The Asian Development Bank (ADB) noted in a 2017 report that digital finance can accelerate access to financial services in South-east Asia.
There has been an increase in financial inclusion globally.
Between 2011 and 2014, bank account ownership worldwide rose from 51 per cent to 62 per cent, reflecting significant progress in extending access to formal financial services despite substantial imbalances across geographic boundaries and between genders, ADB said.
ADB further suggested that addressing financial exclusion could increase gross domestic product (GDP) by 9-14 per cent, even in relatively large economies such as Indonesia and the Philippines. The potential boost to GDP is as high as 32 per cent in Cambodia.
"Making the most of this opportunity could help influence the future shape of the financial services industry, particularly in smaller markets such as Cambodia and Myanmar, where only a small percentage of the current needs for financial services are met by formal providers," the bank said.
At a press conference held at the end of a meeting of Asean finance ministers and central bank governors in Singapore in April, Monetary Authority of Singapore managing director Ravi Menon said that mobile devices can play an important role in the spread of basic banking, insurance and payment services to under-served markets in Asean.
Governor of the Philippine central bank Nestor Espenilla Jr noted as well that fintech innovation in areas such as credit scoring and simple payments are new solutions that traditional banking methods have not been able to provide.
At the same event, Veerathai Santiprabhob, governor of the Bank of Thailand, pointed out that Thai banks have not charged transfer fees for the inter-bank transfer service known as PromptPay, as fees for such digital retail payments are significantly lower.
There are now about 30 million PromptPay users. Thailand plans to link PromptPay with Singapore's version of real-time fund transfer known as PayNow.
Mr Menon added that business leaders have also made a strong pitch for regulators to facilitate the use of fintech.
Much of the focus on financial inclusion has been on lifting people out of poverty by introducing them to financial services. A recent McKinsey report made a similar point, saying that mobile banking can be a lifeline.
"It brings the benefits of financial services to those who currently lack access, and thus enables them to take initial steps towards healthier financial lives," the report said.
But it also warned that regulations meant to spur inclusion can significantly shift the business dynamics of mobile banking players.
For example, caps on fees can make the mobile banking business an unsustainable endeavour, particularly for smaller firms.
So while such caps are intended to make services affordable to poorer users, they hinder profitability and make growing the customer base more difficult, said the McKinsey study published in March.
Asian Financial Innovation Network
In 2017, International Finance Corporation (IFC), a member of the World Bank Group, and MAS signed a memorandum of cooperation to establish and develop the Asean Financial Innovation Network (AFIN).
This initiative emerged from discussions between IFC, MAS and the Asean Bankers Association on the sidelines of the Singapore Fintech Festival in 2016.
AFIN is a regional network that aims to match Asean financial institutions with fintech firms to develop solutions to spur financial inclusion in the region.
Under the partnership, MAS and World Bank's IFC will set up an industry 'sandbox' to offer cloud-based testing to financial players.
Banks and fintech can develop, test and refine digital finance and inclusion solutions. They will also be able to distribute their services to financial institutions in multiple jurisdictions.
The AFIN is set to pilot its platform by the fourth quarter of 2018.
Meanwhile, Singapore has also set collaboration on cyber-security as another area of focus for Asean this year, as the countries seek to foster greater cyber-resilience in the region.
"Given the rapid digitalisation of our economy and financial sectors, we also need to pay greater attention to cyber-resilience. There is room for Asean regulators to enhance collaboration, share intelligence, and exchange best practices," said Singapore Finance Minister Heng Swee Keat in his opening remarks at the 22nd Asean Finance Ministers' Meeting in April.
Cyber-security threats have led to significant data breaches. Digital security firm Gemalto in April revealed that 2.6 billion records were stolen, lost or exposed worldwide in 2017, an 88 per cent increase from 2016.
Gemalto said companies in the healthcare, financial services and retail sectors were the primary targets for breaches last year.
But government and educational institutions were not immune to cyber-risks in 2017, making up 22 per cent of all breaches.
In late 2017, Singapore said it has set aside S$1.5 million over the next three years to train technical officers in Asean member states to boost the region's readiness to combat cyber-threats.
The plan is to train up to 18 candidates in incident detection, threat containment, service recovery, and forensics
FINANCIAL technology (fintech) is expected to be an important part of cooperation in Asean as the regional trade bloc seeks out new and innovative solutions to solve problems of financial inclusion.