Insurtech funding in the Asia-Pacific region has seen a drastic drop of 61%, from $495m to $193m in 2024 according to a report by Tracxn Geo Annual. This has resulted in a 16% decline in seed-stage funding, which now stands at $7.7m. The main factors causing this downturn include macroeconomic uncertainties, higher interest rates, and inflation. This trend aligns with a wider global funding crunch experienced across most investment stages.

In related news within the tech and finance sectors, Mastercard has introduced TRACE, an AI-powered solution to detect and prevent money laundering in the Asia-Pacific. This initiative comes at a time when the rise of real-time payments (RTPs) has created opportunities for criminals to rapidly move illicit funds across accounts. Traditional detection methods often fall short, as they rely on isolated data. TRACE addresses this shortcoming by utilizing advanced data science to identify fraudulent patterns and alert banks proactively. The first rollout of this solution is in the Philippines, in collaboration with BancNet, the switch operator of RTP service InstaPay.

Meanwhile, East Ventures, a leading venture capital company, has launched a platform for AI innovators in Indonesia. This initiative brings together AI talents and tech ecosystem players to explore new untapped opportunities and accelerate growth. However, it’s unclear whether this venture will help offset the funding crunch experienced in the insurtech sector.

The overall scenario presents a complex picture of the Asia-Pacific tech and finance sectors. While there’s a clear funding crunch in the insurtech market, new initiatives like TRACE and the AI platform by East Ventures reflect continued innovation and growth. Whether these new developments will help revitalize funding in the tech sector remains to be seen.