ABSTRACT
The SME sector faces limited access to finance since they are underserved by traditional bank-based institutions. This chapter aims to provide an overview of the current situation of the digital finance instruments available for Southeast Asian SMEs by (1) mapping the advanced technology and digitization and (2) addressing the missing regulatory dimension of the digital finance cube. We found that for technology, Fintech utilizes digital data scoring through data analytics and blockchain technologies with the help of artificial intelligence. The available functions are limited to payment, e-money, and peer-to-peer lending. Only a few economies in the region provide peer-to-peer lending and robo-advice using data analytics. Mobile payment is the most common function. The major challenges when entering the financial services markets include an unregulated environment. These platforms contain high risks of unanticipated and shifted purpose and low cybersecurity. Fintech regulations should be evaluated by uniform standards for financial inclusion.
