six takeaways from start fintech conference 2017 · 2017. 7. 6. · the singaporean government is...

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July28,2017

DeborahWeinswig,ManagingDirector,FGRTdeborahweinswig@fung1937.comUS:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.

Six Takeaways from START Fintech Conference 2017

Source:FGRT

FungGlobalRetail&TechnologyattendedtheSTARTFintechConference2017ConferenceinHongKong.Below,weprovideourkeytakeaways.

1) Theconsensusviewofthespeakersandpanelswasthatstartupsandestablishedincumbentsarepartnersratherthancompetitorsinthefintechrevolution.Visahasbeenactiveindevelopingblockchainandartificialintelligence(AI),andhasbeenopeningitsAPIplatformforthedevelopercommunitytotapinto.

2) Singaporeisacceptingoffailureinfintechexperimentations.Grantscanbegivenout,evenifthereisahighprobabilityoffailure,becausetheyrecognizethatthereisstillknowledgetobegained.

3) Fintechisseenasanenablerforthefinancialindustryindrivinginclusivefinance.Singapore-basedremittancestartupToastseekstoservetheunderbankedpopulationandcapturetheUS$29.8billionremittancemarket.

4) Enterprisestendtobesuccessfulindrivinginnovationwhenthereareinternalchampionstolead.Agoodexampleisforacompanytohaveaninternalchampionspeakwitheachbusinessunit,identifypainpoints,maketherightintroductionsandhelpmanagetheprocessofstartupsmaneuveringthroughtheorganization.

5) HSBCandOctopushighlightedthesocialdimensionofmobilepaymentswhichhelpsdrivehowquicklyacountryadoptsmobilepayments.

6) HSBChasbeendrivingtheuseofblockchainintradeandsupply-chainfinancebycreatinganewleveloftrustandreducingthevolumeofpaperwork.

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July28,2017

DeborahWeinswig,ManagingDirector,FGRTdeborahweinswig@fung1937.comUS:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.

AboutSTARTFintechConference2017FungGlobalRetail&TechnologyattendedtheSTARTFintechConference2017ConferenceinHongKongonJuly27.

FintechSectorDevelopmentinSingaporeStanleyYong,HeadoftheInnovationAccelerationOfficeoftheMonetaryAuthorityofSingapore(MAS),sharedhisvisionforthefintechindustryinSingapore.Hebelievesthat,asfintechdevelops,therelationshipbetweenfinancialinstitutionsandfintechstartupswillbecomplementaryandfintechwillhelpfinancialinstitutionsdobetter.TheMAShasvowedtoinvestS$225million(US$165million)infintechbytheendof20201todrivefintechinnovation.Underthegrantscheme,theMASwillfunduptohalfthecostofpromisingfintech“proof-of-concept”trialsbasedinSingapore,uptoamaximumofS$200,000foreachproject2.Singaporeisacceptingoffailureinexperimentations.Grantscanbegivenoutforexperiments,evenifthereisahighprobabilityoffailure,becausetheMASrecognizesthatknowledgeisstilltobegainedfromfailures.

Singaporewilltakeanagnosticapproachbetweenexistingincumbentsandnewcomers.TheSingaporeangovernmentisfundingdevelopmentsinfintechenablers,moresothandisruptors.Thecountrywillhelpstartupsgrowrapidlyintheregion,while,atthesametime,helpincumbentfinancialleaders.

YongsharedthefollowingexamplesofhowSingaporehasbeendrivinginnovationinitsfintechindustry:

• Electronicpaymentsasanexample:TheMAShasbeenstudyinghowtobuildaninstantpaymentsystemforthepublic,similartotheUK’sFasterPayments3.OnJuly10,2017,anewpeer-to-peerfundstransferservicePayNowwaslaunched.PayNowletsuserstransferfundsusingjusttheirmobilenumber,almostinstantlyandisfreeofcharge4.

• Easieraccesstocapital:TheMAShasmadeiteasierforstartupsandsmallandmedium-sizedenterprises(SMEs)togainaccesstosecurities-basedcrowdfunding(SCF),withouthavingtoissueaprospectus5.

• Theinsurancespaceasanexample:WiththedevelopmentsintheInternetofThings(IoT),insurancecompaniescanlookatdrivinghabitstodecideonpremiums.

• Standardization:Singapore’sstrategyistodevelopApplicationProgrammingInterfaces(APIs)toachievestandardizationandencouragecollaboration6.

Whenposedthefrequently-askedquestionastotheeffectoffintechonjobs,Yongthinksthattheneteffectwouldbealossofexistingjobs.However,hebelievesthegoaloffinancialinclusionwoulddrivenewjobcreation.

1Singaporetriestobecomeafintechhub,Economist(link)2Newgrantoffersupto$200,000forpromisingfintechideasinSingapore:DPMTharman(link)3http://www.fasterpayments.org.uk/4PayNowPressRelease(link)5MASimprovescrowdfundingaccessforstart-upsandSMEs(link)6OpeningnewdoorstopossibilitieswithinAPIs(link)

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July28,2017

DeborahWeinswig,ManagingDirector,FGRTdeborahweinswig@fung1937.comUS:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.

Source:FGRT

PaymentAppConundrumAaronSiwoku,FounderandCEOofToast7sharedhisjourneywiththecompany,andhisgoalforgreaterfinancialinclusion.ToastisaSingapore-basedremittancestartup(whichalsooperatesinHongKong),whichletsforeignworkerslivingoverseassendmoneyhomeeasily.Siwokupivotedawayfromblockchaintechnology,ashedecidedthatblockchainhasyettobecomemass-marketsuitable8,duetoregulatoryconcernsandslippageissues.

Toastuseslegacyinfrastructuretodigitizeforeignworkers’transfersofremittanceshome.SiwokubelievesthattheremittancemarketisworthUS$29.8billion,comprisingofthesixprimarycorridorsofChina(US$19.4billion),India(US$3.8billion),thePhilippines(US$1.2billion),Malaysia(US$1.1billion),Bangladesh(US$0.7billion)andIndonesia(US$0.3billion).

Toastbuiltaself-servicekioskinitsstoresopeoplecanuseapreloadedcardtohandlethetransactionin10seconds.Otherremittancecompanieswhichrunonanagentmodelmaytakeaslongasthreetofiveminutespertransaction.

Toast’sfuturestrategyistoservetheunderbankedinmultiplecountries,createanactiveuserbaseandprovideauxiliaryfinancialservices.Thestartuphasalsoenteredintopartnershipswithotherfinancialserviceproviders.Forexample,ToasthaspartneredwithPrimeCreditinHongKong,soPrimeCredituserscanuseToasttosendmoneyhome.

7Toast(https://toastme.com/hk)8RemittanceFirmToastPivotsfromBitcoin,Raises$850,000(link)

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July28,2017

DeborahWeinswig,ManagingDirector,FGRTdeborahweinswig@fung1937.comUS:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.

Source:FGRT

PanelDiscussiononUsingFintechasanEnablerTheAsiaPacificleadersoffintechstartupssharedhowtheyarecooperatingwithfinancialinstitutions(FI)tocreatevalueforthepublic.

DonaldChan,AsiaPacificDirectorofBondIT,sharedBondIT’spositioninginprovidingservicesforbanksandhelpingtoincreaseefficiency,ratherthancompetingforbusiness.BondITisanIsraelidigitaladvisorysolutionforfixedincomethatservesassetmanagersandinvestmentadvisors.

SGLee,FounderandCEOofKoreanfinancialservicesstartupVivaRepublica9,seesitselfevolvingintoamarketplacebetweenfinancialusersandFI.VivaRepublicastartedaP2Ppaymentsystemwith4%marketshareofthetotaltransactionmarketinKorea,andisnowaportalforuserstoobtainloansandinvestinmicroinvestments.HebelievesVivaRepublicahassuccessfullycreatedvalueforusersinKoreabytacklingthelastmileforcustomers,andhasacollaborativerelationshipwithbanksbyprovidingdigitalinnovation.

TsuyoshiYokokawa,CofounderandCEOofAlpacaandformertrader,sharedhowhisstartuphelpsFIsbuildAItradingmodels.HebeganbystatingtheproblemthatFIshaveintrading:manybanksandfundshaveoverheadsintrading.Byautomatingdecision-makingprocesseswithAI,Alpacahelpstradersimproveforecastingaccuracyandletsbanksreducetheiroverheads.

9Korea’stopfinancialservicesstartuplands$48MfromPayPalandothers,TC(link)

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July28,2017

DeborahWeinswig,ManagingDirector,FGRTdeborahweinswig@fung1937.comUS:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.

Source:FGRT

PanelDiscussionontheWin-WinCollaborationBetweenBankandFintechDuringthepaneldiscussionabouttherelationshipbetweenbanksandfintech,establishedincumbentssuchasVisaanddifferentstartupssharedtheirviewsontheissue.

PaulJung,HeadofProducts,NorthEastAsiaatVisasharedhowVisaisactiveinrecruitingtalentfromthefintechspaceandhasbeenopeningitsAPIplatformVisaDeveloperforstartupsandFIpartnerstotapinto10.ThecompanyrecentlytookasmallstakeinUSblockchainstartupChain,andisdevelopingaplatformforbankstosettlepaymentsacrossbordersusingblockchaintechnologycalledVisaB2BConnect11.JungbelievesblockchainisaninterestingB2Bsolutionforpaymentsandcanbeextendedtoloyaltyprograms.VisaisalsofocusingonAI,andhasbeenworkingwithvendorsandFIsonhowchatbotscanreducecosts.

HenriArslanian,Fintech&RegTechLeadatPwC,beganwiththestatementthatforFIstobesuccessfulinfintech,therehastobeaninternalchampiontolead.Agoodexamplewouldbeforacompanytohaveaninternalchampionspeakwitheachbusinessunit,identifypainpoints,maketherightintroductionsandhelpmanagetheprocessofstartupsmaneuveringthroughtheorganization.RecenttrendsthathehasseenrecentlyincludemorebreakthroughsinRegTech,asRegTechhasacostreductionargument,andmanyfintechstartupsmovingtoB2B,astheclientacquisitioncostforB2Cishigh.

KelvinTeo,CofounderofFundingSocieties—Modalku12,aSoutheastAsia-basedcrowdfundingplatformforSMEfinancing,believesthatFundingSocietiesiscomplementarywithFIs,andhassignedpartnershipswithDBSinSingaporeandRHBinMalaysia,amongstothers.Inthenearfuture,Teobelievesthattheindustrywillseeaconvergenceasstartupsandinstitutionsbecomemoresimilar.

10NewVisaDeveloperVideosShowEagernessToOpenAPIstoStartups(link)11Visa’sMassiveBetOnB2BBlockchainPayments,PYMNTS(link)12https://fundingsocieties.com.my/

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July28,2017

DeborahWeinswig,ManagingDirector,FGRTdeborahweinswig@fung1937.comUS:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.

AlexCampbell,ManagingDirectorofAsiaforonlineaccountingsoftwareXero13,saiditmakesalotofsenseforfintechstartupsandFIstoworktogether,astheyhaveamutualclientbase.Heseesanemergingnear-termopportunityforstartups,asFIsaremovingfromclosedtoopensystems,whichcreatesmanyopportunitiesforstartups.

Source:FGRT

PanelDiscussiononWhatIsNextforFintechInthelastpaneldiscussionoftheday,HongKong-basedregulatorsandleadersofvariousfinancialserviceproviderssharedtheirthoughtsonthefutureoffintech.Asharedobservationbythepanelistswashowquicklyacountryadoptsmobilepaymentsdependsonthehabitsofitspeople.TheycitedChinaandIndiaasexampleswherebybothcountriesalmostleapfroggedtheuseofcreditcardsstraighttomobilepayment.

SeanSeah,HeadofDigitalExperienceatHSBC,talkedaboutthecommunityandsocialnatureofmobilepaymentbasedonhisexperiencewithHSBC’sP2PpaymentappPayMe14.Heisalsoseeingmanyusecasesforblockchainintradeandsupply-chainfinancebycreatinganewleveloftrustandreducingthevolumeofpaperwork.

SammyKam,TechnicalDirectoratOctopus,talkedaboutthemobilepaymentappO!ePay15,whichiscomplementarytoOctopusstored-valuecards.HeseeshugepotentialforOctopustoscaleitsmobilepaymentsoperations,asuserscannowpayatretailoutletswithO!ePaybysimplyscanningaQRcode.

13https://www.xero.com/hk/14FundtransfersmadeeasyasHSBCrollsoutP2Papp(link)15OctopusmobilepaymentappO!ePayraisestransactionlimitamidintensifyingcompetitioninHongKong,SCMP(link)

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July28,2017

DeborahWeinswig,ManagingDirector,FGRTdeborahweinswig@fung1937.comUS:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.

DeborahWeinswig,CPAManagingDirectorFGRTNewYork:917.655.6790HongKong:852.6119.1779China:86.186.1420.3016deborahweinswig@fung1937.comEsmePauAnalyst

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