What The FinTech #123 - 12 Dec 2022
Happy Sunday & Welcome back to What The FinTech, your regular FinTech & Innovation Newsletter focusing on Hong Kong & Asia!
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What The FinTech Video & Podcast - Episode 48
Last Week, Keith Rumjahn, CEO of OliveX, joined me for a fascinating interview about their digital health and fitness suite of products, which includes fitness gamification and move-to-earn experiences delivered via the OliveX fitness metaverse.
Recently, OliveX expanded the world of its Dustland move-and-own games in order to share some of the incredible art and graphics from Dustland Runner.
Check out the previous videos here: on What The FinTech, Instagram or Youtube.
The previous interviews are available on podcast: Spotify, Apple Podcasts, Google Podcasts.
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What was the FinTech this week in: 📰
SINGAPORE
Singapore-based financial admin platform Osome raises $25M Series B
DBS leads in using AI And ML while maintaining human touch
Singapore’s appetite for open banking is at an all-time high
Citibank Singapore, BlackRock collect GOTO's shares
Singapore-based financial admin platform Osome raises $25M Series B
Osome is a financial admin platform that helps business owners with administrative tasks like payroll, accounting and tax reporting. The company announced has raised a $25 million Series B from Illuminate Financial, AFG Partners and Winter Capital.It plans to become cash flow positive within the next 12 months, and recently announced a digital banking partnership with Singapore financial service corporation OCBC.Osome currently serves more than 11,000 businesses in Singapore (where it is is headquartered), Hong Kong and the United Kingdom. It also offers business incorporation services in Singapore, Hong Kong and the United Kingdom, and integrates with e-commerce platforms like Amazon, eBay, Shopify, Lazada, Etsy and Shopee.Part of Osome’s new funding will be used to expand its operations in Asia by targeting side hustles and micro-entrepreneurs, in addition to its current customer base of SMEs.Osome has launched an accounting platform to provide tax and financial reports, expenses and invoice management. It also runs a hybrid accounting service, called the Accounting Factory, that combines machine learning with human accountants and is meant to replace accounting software like Xero and QuickBooks. Machine learning is used to collect, extract and categorize financial data and reconcile it with bank transactions. Then Osome’s accountants look at that information and advise customers. Osome currently has more than 100 accountants and bookkeepers, who are full-time employees.
DBS leads in using AI And ML while maintaining human touch
DBS’ internal policyis named RED —respectful, easy to deal with and dependable. The bank also has a strong innovation framework. DBS has been quite serious about being digital across its entire tech stack.The bank continues to aggressively investigate and experiment with technology. It tried IoT (Internet of Things) and decided to wait for further developments. But Artificial Intelligence (AI) and Machine Learning (ML) are not futuristic, they are used now. DBS holds onto its staff well, in part by offering growth opportunities and continuous challenges, and when it does lose technologists it is more likely to be to a Google or Amazon than to another bank. The bank has worked with DeFi, Web3 , blockchain and custody of crypto. And it is experimenting with the Metaverse internally and with conversational AI to develop chatbots for customer service. In consumer finance, the bank relies heavily on data. AI and ML provide great insight, he added, although a bank needs a fine balance to avoid making customers feel creepy. One project they worked on used machine learning to identify the right time and right insurance plans to engage customers. The protection needs of customers change as they go through different stages in their lives. The machine learning model predicts when customers require additional or different types of insurance and prescribes a suitable insurance product. DBS uses continued discovery, connecting with groups of customer and non-customers either physically or digitally in deep two-way conversations that feed into the design of a new product or service. Once a new product is packaged, the bank tests it. This process led to a fixed rate foreign exchange (FX) product for SMEs (small and medium enterprises).
Singapore’s appetite for open banking is at an all-time high
Open banking is now universally and unequivocally regarded as a key part of a bank’s landscape. 99% of its respondents in Singapore consider open banking as ‘must have’ or ‘important’, up from 97% last year.In 2021, Singapore led other markets with agreement from 95% that open finance was important compared to the global average (91%). Additionally, three quarters (76%) of Singaporeans agree that open finance has the potential to bring about fairer and more equal financial services. However, the current economic situation has ledto further investment constraint. In 2021, 81% of respondents in Singapore said their technology and digital banking investments had been constrained by cost pressures. This year, 84% said the current economic situation has tightened spending. This is demonstrated by the fact that 44% said in 2021 that they were planning to improve or deploy BaaS in next 12 months, whereas just 38% in this year’s survey said their organisations had actually done so. Despite the current economic uncertainty and wider cost pressures, more than three quarters (77%) expect their full investments to resume by the end of H1 2023.
Citibank Singapore, BlackRock collect GOTO's shares
PT GoTo Gojek Tokopedia Tbk (GOTO) shares may set a floor and rebound soon as many foreign investors collect the shares of the ride-hailing to fintech provider.This was revealed from Indonesian Central Securities Depository (KSEI) data on Dec 2, which shows that Citibank Singapore is listed as a GOTO shareholderwith 68.71 billion shares or a 5.8 percent stake.Apart from Citibank Singapore, global investment firm BlackRock owns 1.1 billion GOTO shares at the end of the third quarter of 2022, rising from 463.13 million in the second quarter of 2022. In addition toBlackRock, other investors who increased their stake in GOTO are State Street Corp, FlexShares Trust, Amplify Investment, Mellon Investment Corporation, Eaton Vance Management, Lion Global Investors, Inspire Investing, and Allianz Global Investors Asia Pacific Limited.
CHINA
Tencent Financial Technology rebrands; introduces inbound remittances for Chinese nationals
Tencent Financial Technology rebrands; introduces inbound remittances for Chinese nationals
Tencent Financial Technology, Tencent's fintech arm, is pleased to introduce Tenpay Global, a new international brand for its cross-border payment business.It is also unveiling new inbound remittance capabilities to Weixin to facilitate easy money transfers to China. The Tenpay Global brand consolidates a suite of business and consumer cross-border payment products and solutions to serve different customer segments, including e-commerce platforms, global corporate and individualcustomers, as well as customers seeking personal remittance services. Tenpay Global Remittance Services is an innovative remittance solution that enables global fintech institutions to connect with Weixin's open ecosystem by leveraging simple APIs and powerful global fund process capabilities. Qualified Weixin users in the Chinese Mainland will now be able to receive remittances from abroad directly to the balance of their Weixin Wallet. This new feature builds on the existing remittance service available through Weixin-bundled bank card and is the latest evolution in our commitment to ensuring simpler, more convenient, reliable and compliant cross-border money transfers.
ASIA
India's digital rupee fails to excite interest
Indonesia maps out a digital rupiah as a ‘tool of the future’
BNPL player Pace raises another $6m and other SE Asia deals
Razorpay allows merchants to accept credit card payments via UPI
Social commerce is an entry point to e-commerce for non-metro consumers
ICICI Bank’s pockets tops list of India’s most valued digital payment brands, followedby PayZapp & Google Pay
Temasek backs India’s HealthKart in $135 million funding
How Smartcoin Financials is using AI-powered app to disburse loans
India's digital rupee fails to excite interest
A month into India's pilot project for using an official digital rupee for inter-bank and institutional transactions, stakeholders are seeing no benefits. Using the e-rupee of the Reserve Bank of India (RBI) was much the same as internet-based banking thatusers were already satisfied with.The RBI has devised the e-rupee basically as a digital alternative to cash -one using blockchain distributed-ledger technology, to some degree anonymous and most relevant to consumers and retailers. But in the initial trial banks have been using it for settlements with each other -with no particular advantage.Indeed, the e-rupee, one of several central bank digital currencies (CBDCs) being tried around the world, had a drawback, they said: each trade using it had to be settled individually, whereas trades in the established interbank payment system were first netted off then settled in bulk with the clearing corporation.Another issue is that, since e-rupee transactions do not wholly replace those using established procedures, they add to banks' accounting work.Bankers said they had been initially enthusiastic but now wondered whether financial institutions would want to keep using the e-rupee.
Indonesia maps out a digital rupiah as a ‘tool of the future’
Indonesia is setting out its plans and concept for the digital rupiah, a blockchain-based currency, starting with transactions between local banks. The so-called “Project Garuda” —named after the mythical bird —is Bank Indonesia’s attempt at experimenting with central bank digital currencies (CBDC) to safeguard its position as the sole authority issuing legal tender in a rapidly changing digital era.The monetary authority recently issued a white paper to detail its plans. The digital currency will be rolled out in three phases. First, the wholesale form will be used by mostly larger banks to transfer fundsamong themselves and the central bank. Next, the CBDC use will be expanded to the rest of the interbank money market and monetary operations. Lastly, the digital rupiah will be used by retail consumers for everything from fund transfers to payments.Bank Indonesia will start by limiting the use to qualified banks, who would need to convert their reserves at the central bank to obtain digital rupiah tokens.
BNPL player Pace raises another $6m and other SE Asia deals
Pace, a Singapore-based buy-now-pay-later (BNPL) provider, has raised an additional $6 million in its expanded Series A funding round. Pacewill use the Series A funds to enter Japan, South Korea, and Taiwan.Its BNPL services are currently available in Singapore, Malaysia, Hong Kong, and Thailand.Pace launched its digital Pace Card, allowing users to track and manage installment payments and access the platform’s loyalty program.
Razorpay allows merchants to accept credit card payments via UPI
Fintech platform Razorpay on Monday announced an industry-first move to enable merchants to accept credit card transactions on unified payments interface (UPI), as the digital payments landscape witnesses a stupendous growth.With RuPay credit cards being enabled on UPI, Razorpay merchants can begin accepting credit card payments on UPI, with minimal changes to their existing setup.move is made possible in partnership with Axis bank, which shares Razorpay's focus on catering to the ever-evolving needs of merchants and delivering greater convenience. This offering is in line with the National Payments Corporation of India (NPCI) and the Reserve Bank of India's (RBI) latest innovation in the digital space. On October 4, the NPCI allowed the linking of RuPay credit cards with the BHIM UPI app. Approximately 250 million Indians use UPI for their day-to-day transactions, and nearly 50 million users have one or more credit cards.
Social commerce is an entry point to e-commerce for non-metro consumers
Last year, Myntra diversified its social commerce offering, with the launch of its live shopping platform, M-Live.The core thought behind launching M-Live was to recognise that consumers are looking for shopping models beyond traditional e-commerce. “In its early stage, M-Live focussed on building conviction amongst various stakeholders.” Then, the consumers were looking for engaging shopping experiences, brands wished to build connection with audiences, and creators were looking to create shoppable content andbuild their following. During its initial stage, Myntra’s aim was to build value for each of the social commerce platform’s stakeholders. We have witnessed five times growth in traffic on our social commerce platform. This has also led to double the engagement from what we had seen initially.” Today, China is one of the most mature markets for live commerce. Brands there have been using live commerce for the last five years and have now scaled up significantly. The growing digital boom, backed by higher Internet and smartphone penetration, is aiding the growth of social commerce in India. The Indian social commerce market is currently worth $7 billion and is likely to increase to $84 billion by 2030. M-Live’s goal is to facilitate the widespread adoption ofsocial commerce. “Social commerce is an entry point for e-commerce for non-metro users.Myntra’s Style Squad Program works with creators on a long-term basis that the e-commerce platform later leverages for M-Live. This is also helping Myntra to create deeper partnerships with the creator ecosystem.”
ICICI Bank’s e-wallet, Pockets, topped the list of digital payment brands in India, followed by HDFC Bank’s PayZapp, and Google Pay, based on their Net Promoter Score (NPS), which measures brand perception and customer experience and is considered a predictive metric for business growth.Better security, data privacy, and customer support give banking digital payment apps higher customer loyalty than non-banking digital payment apps.Although Gen Z and millennials are more frequent users of digital payment apps, they are less loyal. And 74 per cent of customers, who use digital payment services, said they stopped using a brand because of poor customer experience.In addition, customers using bank apps, such as Pockets and PayZapp, are different demographically from those using non-banking digital payment service providers. Data privacy, trust, and customer support are customers’ top priorities amid increased incidents of digital payment fraud. Both consumer perception and experience are critical in determining NPS and long-term loyalty.Gen Z and millennials are less loyal than their older counterparts, with 76 per cent claiming they have stopped using a digital payment brand due to a poor experience, compared to 65 per cent of Gen X customers. They also have higher expectations on aspects such as 'speed' while transacting and receiving transaction notifications.
Temasek backs India’s HealthKart in $135 million funding
Indian consumer nutrition platform HealthKart has raised $135 million in a new financing round as it looks to expand in international markets and shore up cash to buy firms.HealthKart, which sells protein supplements and health accessories, is currently on track to generate over $122 million in annual revenue.The startup will deploy the fresh funds to expand its offline presence and also scale its operations in international markets. The omni-channel nutrition retailer currently operates over 140 stores across 50 Indian cities.
How Smartcoin Financials is using AI-powered app to disburse loans
SmartCoin Financials Pvt Ltd is an app-based consumer-lending platform.the fintech startup has partnered with non-banking financial companies (NBFCs)registered by the Reserve Bank of India (RBI) to offer instant personal loans to self-employed and salaried individuals across India. To address the concerns of the vast under-banked people in the country, the company is evolving from a micro-lending platform to providing a full suite of offerings, including gold savings, insurance, among others. So far, it has more than 1.11 crore registered users and it has disbursed loan amounts worth over Rs1,700 crore
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