What The FinTech #130 - 26 Feb 2023
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What The FinTech Episode 52 - Binery
I had an enlightening conversation with Haywood Shum and Calvin Lui, the co-founders of Binery, a scalable AI accounting service designed to make accounting more accessible and affordable for small businesses worldwide.
As a founder without a financial background, I understand how confusing and laborious accounting can be. That's why Haywood and Calvin's approach to accounting with Binery is refreshing - they prioritize user-friendliness and affordability without compromising on quality.
Their innovative solution enables business owners to focus on the core aspects of their business, while Binery takes care of the financials. If you're a small business owner looking for a better accounting solution, I highly recommend checking out Binery
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.
What was the FinTech this week in: 📰
HONG KONG
1. DBS Bank expands crypto reach sets sights on Hong Kong license
2. HK aims to be global center for multi-trillion-dollar green tech finance market and create new economic pillar post-Covid
3. Nearly 60% of Hong Kong SMEs look to government for more financial support in upcoming Budget announcement
4. FWD to buy majority stake in Malaysian life insurer Gibraltar BSN ahead of planned Hong Kong IPO
DBS Bank expands crypto reach sets sights on Hong Kong license
Singapore’s DBS Bank is eyeing Hong Kong’s crypto market with an application for a license, as the bank aims to offer its digital asset services to Hong Kong customers and expand its reach in the fast-growing crypto landscape. As the bank prepares to establish itself as a center for digital assets, DBS Group intends to extend its cryptocurrency services to Hong Kong. DBS Bank intends to apply for a license that will enable it to provide Hong Kong customers with cryptocurrency trading services.
Hong Kong is to launch a bid to become a global powerhouse in the HK$10.74 trillion (US$1.37 trillion) green technology finance market, the Post has learned. The plan to turn Hong Kong into an international green tech and green finance center and the launch of a green tech week towards the end of this year are expected to be highlights of the budget unveiled by Financial Secretary Paul Chan Mo-po on Wednesday. A separate task force will also be established to boost the city’s connectivity to the World Wide Web, with both groups to deliver their action plans by the end of the year. The task force will bring together experts from a variety of disciplines to investigate five main areas –new applications for green tech financing, international certification, cultivation of talent and expansion into overseas and the Greater Bay Area markets –and draw up action plans. The Hong Kong government last week issued HK$800 million worth of tokenized green bonds to global institutional investors, the first of its kind by a government, which paved the way for digital bond offerings in the city.
58% of Hong Kong’s SMEs would like to receive more funding and financial support from the government, amid growing concerns about the state of the global economy. 76% of Hong Kong SMEs believed that a global recession would take place in 2023. Over half of the respondents also expressed growing concerns and need for government funding and financial support (58%), followed by support on business matching and networking (30%) and brand development and promotion (18%). In addition, respondents also cited inflation (44%), labor costs and availability (43%) and rising global interest rates (39%) as their top concerns. Despite the concern of a global recession, Hong Kong SMEs largely expressed confidence in the outlook of their businesses in the coming 12 months with Hong Kong-mainland China border reopening. 75% of the respondents believed that this would bring a positive impact on their business revenues. 36% of the respondents had listed marketing and branding as the top business priority in 2023, along with e-commerce and market expansion sharing equal importance (25% respectively). This might come as an expected sentiment as businesses continue to emerge from the pandemic and kickstart marketing and branding activities to help meet business goals and maintain brand visibility amid economic uncertainty.
FWD to buy majority stake in Malaysian life insurer Gibraltar BSN ahead of planned Hong Kong IPO
FWD Group Holdings, the pan-Asian insurance company owned by Hong Kong billionaire Richard Li Tzar-kai, has agreed to buy a majority stake in Gibraltar BSN Life, a move that allows it to tap into the Southeast Asian market’s growth potential ahead of FWD’s planned initial public offering. FWD, along with a group of investors, will buy a 70 per cent stake in Gibraltar BSN from a subsidiary of New York-listed Prudential Financial. The transaction will allow FWD to make a foray into the Malaysian life insurance market. Bank Simpanan Nasional will continue to hold the remaining 30 per cent. Financial terms of the transaction, which is expected to close in the second quarter, were not disclosed. FWD plans to partner with Bank Simpanan to further develop and grow Gibraltar BSN. The move in Malaysia follows FWD’s long-term strategy to expand across Southeast Asia. The company continues to work towards an IPO in Hong Kong this year.
SINGAPORE
1. DBS continues to be studied as a model for digital transformation
2. Deutsche Bank and Memento Blockchain complete Project DAMA
3. Singapore fintech funding still hot amid investment slumps
DBS continues to be studied as a model for digital transformation
DBS continues to be studied as a transformation role model, with Harvard Business School (HBS) being the latest academic institution to capture the bank’s digital transformation journey in a case study. The DBS case is being taught in HBS’ Master of Business Administration (MBA) program and its executive education courses by Professor Ranjay Gulati, Paul R. Lawrence MBA Class of 1942 Professor of Business Administration. Gulati was ranked as one of the top ten most cited scholars in Economics and Business over a decade by ISI-Incite. He is also the author of six bestselling books on strategy, organizational effectiveness, and leadership in organizations.
Deutsche Bank and Memento Blockchain complete Project DAMA
Deutsche Bank and Singapore-based Memento Blockchain have announced the completion of the Project DAMA proof of concept. The project was created with the aim of making digital fund management and investment servicing more efficient, secure, and flexible. Project DAMA explored the creation of a unique and non-transferable token inspired by the Soul bound Token (SBT). This token would basically act as a digital identity and profile of a wallet owner. Apart from enabling asset managers to comply with any relevant regulations, the token can ensure that only tested investors, and qualified or legal entities are able to invest in digital funds. The project also investigated creating a decentralized payment and asset exchange gateway that can be used by investors to convert fiat money to digital currency or assets. Smart contract structures were implemented to offer choice in a dynamic way depending on the preferences of investors.
Singapore fintech funding still hot amid investment slump
Singapore fintech funding hit a three-year high in 2022, even as lower valuations, turbulence in cryptocurrencies and uncertain economic conditions dented global fintech investments. Total deal value rose about 22 per cent to US$4.1 billion (S$5.5 billion) in 2022 across 250 deals in mergers and acquisitions (M&A), private equity and venture capital, compared with US$3.4 billion in 2021, KPMG said in its Pulse of Fintech report. This was also the second-highest investment achieved by the Republic over the decade, bucking a global trend of falling fintech investments. Crypto and blockchain, payments and wealth tech were among the top areas for funding. Globally, investors shifted away from cryptocurrencies, but continued to pour money into blockchain-based solutions such as real-time payment settlement pre-validation, streamlining cross-border payments and tokenizing assets. In 2023, KPMG expects investors to shift towards start-ups focused on providing solutions for small and medium-sized enterprises and away from blockchain companies focusing on retail markets.
CHINA
1. Tencent scraps plans for VR hardware as metaverse bet falters
2. WeChat launches new image function to compete with little red book
3. Aurora mobile partners with Baidu ERNIE Bot to develop a full range of AI-driven interactive marketing products
4. China proposes overhaul of commercial banks’ risk-exposure rules as it looks to strengthen the financial system
Tencent scraps plans for VR hardware as metaverse bet falters
Tencent Holdings is abandoning plans to venture into virtual reality hardware, as a sobering economic outlook prompts the Chinese tech giant to cut costs and headcount at its metaverse unit. The world’s largest video game publisher had ambitious plans to build both virtual reality software and hardware at an “extended reality” XR unit it launched in June last year for which it hired nearly 300 people. It had come up with a concept for a ring-like hand-held game controller, but difficulties in achieving quick profitability and the large investment needed to produce a competitive product were among factors that prompted a shift away from that strategy. One of the sources said the XR project was not expected to become profitable until 2027, according to an internal forecast.
WeChat launches new image function to compete with little red book
Tencent Holdings' instant messaging application WeChat has unveiled a new feature to rival Instagram-like e-commerce platform Little Red Book. Owners of official WeChat accounts, usually brands, can make use of the new function to post up to nine pictures in a post with a text of up to 300 words, basically matching the format of Little Red Book, also known as Xiaohongshu, Yicai Global learned. The move is Tencent’s attempt to promote e-commerce through WeChat, Zhang Yi, chief executive of iiMedia Research, told Yicai Global. Tencent's other businesses are shrinking, and it is becoming clear that the gaming business has its limits, the tech giant is pinning its hopes on WeChat, Zhang added. Tencent aims to create new business growth via WeChat, which has one billion users, via valuable content and business models.
Aurora Mobile Limited, a leading provider of customer engagement and marketing technology services in China, has become one of the first ecosystem partners of ERNIE Bot, a generative AI chatbot developed by Baidu. The Company will access ERNIE Bot and apply Baidu’s leading intelligent dialogue technology in its customer engagement and marketing technology services. This initiative is an additional step in Aurora Mobile’s implementation of its AI-driven strategy with the support and empowerment of leading AI chatbot technologies. Baidu has been actively developing AI for more than a decade. ERNIE Bot was developed based on its industrial-level knowledge-enhanced ERNIE model, which is capable of deep semantic understanding and content generation across multiple modalities and languages and has great potential in various fields such as question-and-answer search, content creation, and intelligent office. ERNIE Bot will access Baidu Smart Cloud. In the future, enterprises will be able to use ERNIE Bot service through Baidu Smart Cloud to empower various applications. As an ecosystem partner, Aurora Mobile will be given priority for internal testing with ERNIE Bot and will integrate ERNIE Bot in its products. Moving ahead, the Company will cooperate with Baidu in related product development, standards formulation, and jointly develop AI-driven solutions to address enterprises’ needs in omni-channel user engagement leveraging technology sharing, training, and joint marketing.
China’s banking regulator plans to introduce differentiated risk weightings to better reflect and assess banks’ risk exposure, to prevent risks in the nation’s financial system. By setting risk weightings, banks’ capital adequacy ratios can more accurately reflect their overall risk levels and capacity for continuing sustainable operations, the China Banking, and Insurance Regulatory Commission (CBIRC). The revamp aims to “further enhance commercial banking regulations, raise banks’ risk management levels, and upgrade their performance”, the statement added. “Rather, it will reduce compliance costs and stimulate lending activities of medium and small-sized banks, while preserving stability of the banking system.” The new system will introduce new risk factors and will assign more weightings for more granular calculation of overall risk exposures. Meanwhile, limits will be imposed on the existing internal ratings-based approach to credit risk assessment, which allows banks to model their own inputs for calculating risk-weighted assets with exposures to retail, corporate, financial institution, and sovereign borrowers. Such exposure will be assigned a 1,250 per cent risk weighting unless detailed calculations and credible explanations can be provided to substantiate alternative lower weightings.
ASIA
Stripe expands Tap to Pay to Android, turning NFC-enabled Android devices into payment terminals
Siam Commercial Bank plans to be a fully digital bank
Alipay+ to build a bridge between Asian and Australian merchants with epay integration
India’s central bank grants ‘In-Principle’ license to 50 payment aggregators
Kaspersky launches XDR platform to combat growing ransomware threats in Southeast Asia
Digital Banks could be the key to promoting financial inclusion for Malaysia’s B40
Singapore and India debut cross-border payment link
SBI Investment leads $28 million series A in German fintech Pliant
Stripe expands Tap to Pay to Android, turning NFC-enabled Android devices into payment terminals
Businesses that use Stripe Terminal to take in-person payments will now be able to carry out Tap to Pay transactions on NFC-equipped Android devices. It will support payment methods using Google Pay, Mastercard, Visa and American Express debit and credit cards; and it will integrate with third-party merchant platforms that typically provide bridging through to different segments of the small business community. Tap to Pay is currently live in six markets — U.S., Canada, the U.K., New Zealand, Australia, and Singapore. Stripe plans to expand that list but declined to give a timeline on when and where that will happen.
Siam Commercial Bank plans to be a fully digital bank
The Siam Commercial Bank (SCB) has unveiled its plans to become a fully digital bank in wealth management through its “Digital Bank with Human Touch” vision. The bank will be doubling down on its efforts to create “cutting-edge digital products and services that cater to a wide variety of demographics”. SCB has also revamped its management structure where the digital banking, information technology, and operations departments will now be reporting directly to the bank’s President and Chief Technology Officer. In terms of its wealth management service offerings, SCB has formed a network of relationship managers, an array of investment products, and reputable partners. Moving forward, SCB said that it aims to facilitate the growth of wealth for retail as well as corporate customers.
Alipay+ to build a bridge between Asian and Australian merchants with epay integration
Alipay+ has announced that it is expanding its footprint in Australia by launching a cooperation with epay Australia Ltd. The deal will see the deployment of cross-border mobile payments and marketing solutions to Australian merchants. Not only will 8,000 retailers including Australian luxury department store David Jones receive Alipay+ activation, merchants in the epay Australian network will also be able to accept payments from Asia – receiving access to more than a billion consumers in the process. Alipay+, owned by Chinese global tech conglomerate Ant Group, will leverage its payments suite connecting international merchants with multiple e-wallets and payment journeys to enable ‘seamless’ cross-border transactions in the preferred local payment method.
India’s central bank grants ‘In-Principle’ license to 50 payment aggregators
India’s central bank, the Reserve Bank of India (RBI), granted ‘in-principal approval’ to 32 existing payment aggregators to act as online payment aggregators. Further, applications from 19 new entities were also approved. This is the first time the RBI has released such a list of entities, indicative of how seriously it is monitoring developments in India’s digital and payments landscape. Previously, relevant firms made private announcements about the RBI’s approval; from now onwards, official communication from the central bank can be expected as the sector gets better regulated. Investors and businesses should note that the entity must receive “authorization” in accordance with section 7 of the Payment and Settlement Systems Act of 2007; the grant of in-principle approval is not equivalent to authorization. After receiving the in-principle approval, the entity must provide the RBI with a System Audit Report (SAR) and a certificate from a Chartered Accountant (CA) stating that the net worth criterion has been met to be considered for “permission” [authorization]. Further, the entities must meet all other Guidelines’ requirements and, if any, additional requirements set down by the RBI.
Kaspersky launches XDR platform to combat growing ransomware threats in Southeast Asia
Kaspersky is taking proactive steps to combat the escalating danger of targeted ransomware attacks on businesses in Southeast Asia. Its latest move is the introduction of the Kaspersky Extended Detection and Response (XDR) platform, which offers comprehensive protection against such attacks through its multi-layered defense mechanisms. To assist enterprise security teams that are often overwhelmed and understaffed, Kaspersky has combined its various security tools into a unified security incident detection and response platform called Kaspersky Extended Detection and Response (XDR). This platform offers enterprises multi-layered protection and threat-hunting capabilities for their existing Security Operations Center (SOC). Kaspersky’s XDR offers adaptability for organizations of all sizes and ease of use. In addition, it includes reliable threat intelligence data from Kaspersky Security Network (KSN) to enhance detection capabilities. The platform is a multi-layered security technology that provides solutions and cybersecurity expert services. It uses a proactive approach by coordinating various security tools into a unified security threat detection and response platform.
Digital Banks could be the key to promoting financial inclusion for Malaysia’s B40
Financial inclusion is a vital aspect of economic growth, and it is critical to ensure that all individuals have access to financial services. The lack of access to financial services severely affects the B40 group, as they are more likely to rely on informal and unregulated financial services, which often come with high-interest rates and hidden fees. Many individuals in this group lack the knowledge and skills to use digital financial services such as e-wallets, online banking, and other digital payment methods. The strategy was collaboratively developed by Bank Negara Malaysia (BNM) and five other financial institutions, such as the Securities Commission Malaysia (SC) and the Ministry of Education. In recent years, the bank has undertaken the Financial Capability and Inclusion Demand Side Survey 2021-2022 (FCI 2021-2022) and the SME Financing Survey2021 to obtain valuable insights into the current financial capability and inclusion in Malaysia.
Singapore and India debut cross-border payment link
India and Singapore have linked their real-time payment systems to simplify cross-border remittances. the two countries’ central banks saying it lets consumers send and receive funds between bank accounts and eWallets in real-time using India’s Unified Payments Interface (UPI) and Singapore’s PayNow network. Payments can be made via mobile phone, UPI identity or virtual payment address (VPA). It’s also the first to use cloud-based infrastructure, and the first to include participation from non-bank financial institutions. The partnership comes a little more than a month after the National Payments Corporation of India (NPCI) began widening access to UPI to non-resident Indians in several countries, including Singapore, along with the U.S., Canada, Australia, and the U.K. The impending launch of the Singapore/India link-up, with bank officials in the two countries saying the interoperability will have some immediate effect, with the direct interactions expected to lower remittance costs by 10%.
SBI Investment leads $28 million series A in German fintech Pliant
Japan's SBI Investment has led a $28 million Series A round in Berlin-based corporate card platform, Pliant. Pliant’s credit card platform enables companies to issue physical, virtual, and one-time credit cards that integrate into business back-end enterprise resource planning software. The company also services other fintech firms with an embedded card platform that they can offer to their clients. Recent signings include Candis, an invoice management software company, and Circula, a travel expense and employee benefits software provider. SBI is joined by existing investors from Plaint's previous pre-seed and seed rounds, including Carsten Maschmeyer’s Alstin Capital, fin leap founder Ramin Niroumand through Motive Ventures, and neosfer, the early-stage fund of Commerzbank. In total Pliant has raised $48 million. The investment is a bright spot in a challenging time for startups, with the EY Startup Barometer 2022 reporting a 43% decline in venture capital investment in German startups compared to the previous year. Pliant’s Series A round is the largest fintech funding in Germany thus far in 2023.
BLOCKCHAIN - CRYPTO - DIGITAL ASSETS - DE FI
Ingenico and Binance team up on in-store crypto payment acceptance
BIS chief floats unified programmable ledger to turbocharge payments innovation
AI-powered crypto search engine Kaito raises $5.3M to improve browsing with AI, ChatGPT
Crypto Protocol Fetch.ai Partners with Bosch to Develop Web3 and AI Tech
MetaMask Digital Asset Purchasing Simplified with New Integration
Ingenico and Binance team up on in-store crypto payment acceptance
POS terminal manufacturer Ingenico has teamed up with Binance to pilot in-store cryptocurrency payment acceptance. The two firms have formed a strategic partnership, developing a system that lets Ingenico's Axium terminals accept more than 50 cryptocurrencies. Currently, the majority of in-store cryptocurrency payments require an additional device or the execution of an integration by the merchant. The technology is already being tested in France and is set to be made available in several countries where Binance has regulatory approval including Spain, Dubai, and Japan.
BIS chief floats unified programmable ledger to turbocharge payments innovation
The BIS and central banks around the world are working on a host of innovations, including CBDCs and tokenization of different assets, including tokenized deposits. A unified programmable ledger could be a way to bring all these innovations together, according to Agustín Carstens, general manager of Bank for International Settlements. A unified ledger offers the potential to combine the monetary system with other registries of real and financial claims. Such a ledger would be a public-private partnership with a clear division of roles, and where the central bank is tasked with underpinning the trust in money. The ledger would allow for the use of smart contracts and composability, meaning that any sequence of transactions in programmable money could be automated and seamlessly integrated. This reduces the need for manual interventions that delay transactions and reduces dependency on intermediaries and allows for simultaneous and near-instant payments and settlement. Carsens cited the process of escrow for buying a house as an example of how the ledger could be used. Using a smart contract, the escrow process could be automated by locking the respective funds in the buyer's account. Once the escrow process is concluded, the smart contract transfers the money to the seller automatically, and instant settlement is achieved via digital central bank money.
AI-powered crypto search engine Kaito raises $5.3M to improve browsing with AI, ChatGPT
Kaito, an AI-powered search engine for crypto, raised $5.3 million in a seed round led by Dragonfly Capital. The crypto industry doesn’t have a cohesive way for people to search for information across channels in a way that traditional search engines like Google do for mainstream information. In general, it’s hard to find information surrounding the ecosystem, given how much is tucked away on platforms that aren’t aggregated onto a general search engine like Google. Kaito’s MetaSearch aims to address this issue through a one-click product that enables users to search across the entire social crypto landscape through platforms like Twitter, Discord, governance forums, Mirror, Medium, podcast transcripts and research, to name a few. Aside from aggregating information, Kaito leverages AI to optimize its search engine through ranking, topic mining, personalization, recommendation, speech-to-text transcription, and AI-generated content. It’s also integrating ChatGPT/GPT-3 to provide an additional search experience for crypto users. Eventually, the platform will also roll out a token-based community that will leverage a similar model to Wikipedia where users can contribute to the platform through a tiered system.
Crypto Protocol Fetch.ai Partners with Bosch to Develop Web3 and AI Tech
Bosch has become the latest mainstream tech giant to foray into web3. The German engineering and technology company has collaborated with leading crypto protocol Fetch.ai to launch Fetch.ai Foundation. Fetch.ai Foundation will develop web3 technologies focused on real-world use cases including mobility, industry, and consumers. The foundation features a decentralized innovation model with a 3-tier governance structure and will incorporate other industry participants in future. The Fetch.ai Foundation will leverage technology pooling and open-source ecosystems to ensure sustainability independent of the individual foundation participant’s engagement.
MetaMask Digital Asset Purchasing Simplified with New Integration
Mercuryo, a crypto payments company, and ConsenSys, a web3 company, have announced an integration within MetaMask. This will allow MetaMask users to bypass mainstream exchanges and buy crypto tokens with bank cards, Apple Pay, and various bank transfer methods directly in their wallets. The integration aims to simplify purchasing digital assets thanks to instant checkouts and easier user onboarding. Purchasing crypto tokens can often be time-consuming, requiring identity verification and clearing banking details. Mercuryo’s product streamlines this process by allowing MetaMask users to purchase up to €699 in crypto with two dozen fiat currencies without needing full identity verification. The partnership would benefit users with little experience in crypto as well as those looking for a quick and easy way to restock their portfolio.
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