Taiwan’s booming startup ecosystem and recent fintech developments could be hinting at further growth in the local fintech sector.

A leading global supplier of hardware, Taiwan has a vibrant startup ecosystem and is on track to grow into a global recognized hub, says a new report by Taiwan Tech Arena, a startup ecosystem development program under the Ministry of Science and Technology.

Semiconductor innovation and manufacturing have been the building blocks to Taiwan’s burgeoning startup ecosystem, led by locally-founded pantheons such as AsusTek Computer, now the world’s fifth largest PC vendor by unit sales, and TSMC Taiwan, the world’s most valuable semiconductor company and one of the country’s largest companies.

Today, there are more than 500 startups in Taiwan, data from Taiwan Tech Arena and StartupBlink suggest, which raised a total of US$669 million in 2019, according to the 2020 Taiwan Startup Investment Scene Report.

Hardware and the Internet-of-Things, healthtech and foodtech are the three strongest startup verticals, according to the Taiwan Startup Ecosystem Report, but blockchain is another fast growing sector that’s represented by startups such as CoolBitX, a cryptocurrency hardware wallet manufacturer, KryptoGO, a transaction monitoring platform, and BiiLabs, a blockchain startup focusing on IoT and AI applications.

Taiwan’s fintech developments

StartupBlink’s Startup Ecosystem Map of Taiwan lists less than 40 fintech startups, implying that the domestic fintech ecosystem is still small. But recent developments and initiatives from foreign tech firms and banks are expected to give the sector a boost.

Earlier this year, Singapore-based DBS Bank opened its third fintech research and development (R&D) center in the world in Taiwan. DBS Bank Taiwan senior executives cited Taiwan’s large pool of tech professionals and how successful it was in dealing with the COVID-19 pandemic as the main reasons why the bank chose Taiwan.

The new center aims to recruit at least 30 information tech experts in Taiwan by the end of the second quarter, the bank said. It will focus on giving students greater exposure to the fintech field.

In February, Line Corporation, a tech firm originally from South Korea that operates one of Asia’s most popular messaging apps, was granted an operational license by Taiwan’s Financial Supervisory Commission to launch a virtual bank. Line Bank Taiwan is scheduled to launch in the first half of the year and will initially provide retail banking services including deposit, transfer, debit card and personal loan. Line counts 21 million monthly active users in Taiwan.

Line Bank is one of the three virtual banks to have received approval from Taiwanese regulators. Rakuten International Commercial Bank, backed by the Japanese e-commerce giant, is the only one of the three to be operational.

Taiwan’s Financial Supervisory Commission (FSC) introduced its fintech development roadmap in August 2020, outlining key areas of focus for the next three years, including relaxing regulations on consumer data sharing and corporate account opening, and introducing a new fintech license by 2022.

Featured image credit: Photo by Louis Cheng on Unsplash