Consumer Credit in Taiwan

PROSPECTS

Other personal lending grows strongly and highly seasonal

Other personal loans have surged in popularity, registering the fastest current value growth in 2019. The major drivers for the strong growth of other personal loans are the rise in consumption, favourable demographics, and wide and easy accessibility to loan products.

Rising online lending solutions

In Taiwan, banks, credit unions and other traditional alternative financial providers dominate the loan market. With demand for personal loans on the rise, online lending solutions have been increasingly developed by fintech companies and innovative financial institutions.

Regulatory sandbox presents opportunities on financial innovations

Despite Taiwan lagging behind its regional rivals - Singapore and Hong Kong - in attracting fintech investments, Taiwan constitutes superior talents and lower costs, as well as comprehensive tech hardware development in the areas of IoT, robotics and electronics. The government’s initiative on fintech regulatory sandbox, launched in 2018, allows companies to experiment with innovative financial products and services without compliance to certain existing regulations for up to one year.

COMPETITIVE LANDSCAPE

Banks and fintech improve services and drive consumer credit

As more Taiwanese consumers opt for online bank services, banks are increasingly expanding their financial services online. O-Bank was the first, all-digital, online-only bank in Taiwan, and serves customers via mobile, video, voice and other online banking channels.

Increased partnerships and initiatives to drive financial inclusion

In 2018, leading retail banks have been aggressively pushing various financial innovations and digital transformation. Following the collaborations of Standard Chartered with Lend & Borrow (LnB) and DBS with Proton car company, KGI Bank initiated the first regulatory sandbox with Chunghwa Telecom to promote financial inclusion in 2018.

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