The digital banking sector is the most competitive in the Southeast Asia (SEA), with a score of 9,692 on the Herfindahl-Hirschman economic competition index index (HHI) (reverse) index, Robocash Group said Thursday.

The Singapore-based provider of digital financial services said in a statement the fintech market in the SEA region as a whole has scored 9,643 points on the HHI (reverse) index, which is considered highly competitive as well.

Notably, Brunei has the most competition, despite having the smallest market share of downloads, less than 0.01 percent of the SEA region in 2022.

Also notable is Myanmar, which five years ago did not have any major achievements in the field of fintech, but in 2022 was able to make significant progress in this direction.

It is also notable that the fintech mainstays like Singapore or Malaysia have lower competition than the emerging markets of Brunei and Laos.

Overall, the mobile financial app market in the ten SEA countries is a highly competitive market.

Still, it is not perfectly competitive, as it lacks in the number of participants.

However, over the last five years there have been some significant structural shifts that have allowed many participants to increase their market shares, thereby increasing opportunities for market competition and business growth.

Meanwhile, the digital banking sector is the most competitive in the SEA, with a score of 9692 on the HHI (reverse) index.

In turn, the digital insurance market has the least competition with an estimate of 2890 points.

It is three times less competitive (more concentrated) than the next underdog, the digital investment market, with an estimated 7648 points.

Taking a closer and deeper look at the industry structure of mobile fintech, the most competitive SEA in principle is the digital banking market in Brunei, and the least is the human resources and payroll market in Malaysia.

In half of the countries in the SEA region, the market players in the digital investment sector exhibit noticeable monopolistic tendencies.

On the other hand, the digital banking market demonstrates a higher level of competition, ranking first in three out of the ten countries.

It is also noted that half of the fintech markets in the SEA region exhibit a high level of concentration, while the remaining 25 percent each are classified as moderately or highly competitive.

When considering the weighted average of the reverse HHI indices across all countries and fintech industries in the SEA region, the overall degree of competition is calculated to be 7646 points. This suggests a moderate level of competition.

In contrast, a direct assessment of the reverse HHI for all previously unclassified mobile fintech participants yields a higher score of 9692 points.

Based on the study findings, it can be concluded that the mobile fintech market in the SEA region was generally competitive in 2022, but with a tendency towards concentration.

In the meantime, the fintech industry in the SEA region is experiencing rapid growth. In the coming years, it will likely become increasingly more competitive.

“Half of the fintech markets in the SEA region exhibit a high level of concentration, while the remaining 25 percent each are classified as moderately or highly competitive,” said analysts at Robocash Group.

According to the analysts, the future of the financial services market in SEA will undoubtedly be strongly influenced by digital banking.

“The sector’s growth and competitiveness are expected to continue soaring, presenting both exciting opportunities and considerable challenges for all players in the landscape,” said the analysts.

The report based on the usage data from 2442 financial mobile apps.

Indonesian financial mobile app consumers account for the largest share of 46.57 percent, more than Vietnam (17 percent), Thailand (16.58 percent) and the Philippines (11.49 percent) combined.

This distribution is explained by the uneven level of gross domestic product (GDP) of countries, as well as by population and the number of Internet users – the more there are, the higher the number of downloads of financial mobile applications.

The main classification metric was the HHI, which indicates the degree of equal distribution of services among market participants.

South and Southeast Asia fintechs raises $53.3B to date in alternative lending, digital banking, payments and transfers, and e-wallet