What The FinTech #146 - 9 Jul 2023
🚀 Welcome to What The Fintech - your weekly dose of electrifying insights, game-changing breakthroughs, and dazzling trends from the pulse-pounding world of fintech across Hong Kong, Singapore, China, and Asia! As your go-to source for top headlines and industry insights, we're here to keep you updated on the latest innovations revolutionizing the way we think about finance and technology in this dynamic region.
Prepare to embark on a thrilling adventure through the digital landscape as we explore the ground-breaking developments, visionary startups, and trailblazing trends that are shaping the future of finance in Asia and beyond. So buckle up, grab your favorite beverage, and get ready to ignite your curiosity with the latest and greatest from the fintech universe! Let's dive in! 🌊💡💸
***
🌐 Discover What The Fintech on Substack and Elevate Your FinTech Game! 🚀💡💸
We've landed on substack! Click "subscribe" to follow our captivating newsletter and stay in the loop with the latest fintech marvels. Don't miss out - join the fun and level up your fintech knowledge today! 🎉🔥🌟
-
Scalelist: powering this week's fintech insights!
Export Your Sales Navigator searches Including verified Emails and Phone Numbers.
Enjoy a special WTFinTech 10% discount for your first 3 months.
Happy Scaling!
-
What The FinTech Episode 63 - The Sandbox
This week, we're taking a deep dive into the captivating world of blockchain gaming with none other than BORGET Sebastien, Co-founder and COO of The Sandbox. 🎮🌐
Join us as Sebastien guides us through the innovative terrain of The Sandbox, an industry-leading virtual world where players have the power to create, own, and monetize their gaming experiences on the blockchain. 🚀
We'll explore the birth and evolution of their unique play-to-earn model, the transformative impact of user-generated content, and the extraordinary possibilities that blockchain technology unveils for creators in the gaming space.
From community engagement to the role of NFTs in gaming, from navigating the regulatory landscape of blockchain to the future of digital ownership, this conversation is jam-packed with insights you won't want to miss! 👀
-
🎧 Tune in for a treasure trove of fintech insights!
Spotify ⭐⭐⭐⭐⭐
Apple Podcast ⭐⭐⭐⭐⭐
Google Podcast ⭐⭐⭐⭐⭐
Amazon Podcast ⭐⭐⭐⭐⭐
Remember to subscribe, like, give a 5⭐ and share our podcast with fellow fintech and digital asset enthusiasts, and let us know your thoughts in the comments or on social media.
Stay tuned for more engaging conversations right here on "What The Fintech!" 🔥
-
What was the FinTech this week in: 📰
HONG KONG
DBS Hong Kong and CLP Power Hong Kong Limited (CLP Power) announce the launch of a new “SME Low-carbon Rewards” programme that aims to support Hong Kong SMEs in their drive towards a low-carbon economy. Tailored business solutions to enable SMEs’ transition to a low-carbon economy. The new programme will offer banking service privileges to eligible customers: CLP Renewable Energy Certificates (RECs): CLP Power’s business customers are entitled to DBS Hong Kong’s subsidies to purchase CLP. Preferential deposit rate: CLP Power’s business customers can enjoy HKD current or savings account deposit rate as high as 1.25% per annum for settling operational expenses including CLP electricity bill. Business account opening fee waiver: CLP Power’s business customers who newly open DBS Business Accounts can enjoy business account opening fee waivers[3]. In addition, they can enjoy a series of “$0 fee” offers, including but not limited to waivers in telegraphic transfers, local transfers and FPS payments.
What New York can learn from Hong Kong in regulating crypto
Web3 companies are leaving New York, fomented by Washington D.C.’s recent combative approach to regulating the industry. The Big Apple’s global relevance in relation to other major financial hubs is diminishing because regulators have spurned the wishes of the city’s leadership – but China and Hong Kong have proven it does not have to be this way. After an 18-month period of hostility, the former appears to have pivoted, rapidly implementing common-sense regulations in Hong Kong that foster innovation and encourage the sector to grow. This all happened because officials in Beijing listened to and supported Hong Kongers and their leaders, something U.S. securities regulators seem hell-bent on avoiding. From China, these people moved to Hong Kong, Singapore, Dubai, Silicon Valley and beyond. After watching crypto exchanges, capital, and real-estate tenants leave Hong Kong, the newly appointed executive leader, John Lee, consulted with the Web3 industry and developed a plan to eventually turn Hong Kong into a global cryptocurrency hub. This new framework, implemented on June 1, also acts as a testing ground for the future development of regulations and innovation for the rest of China’s Web3 industry – and Hong Kong’s recovery has been noticeably fast. Today, as U.S. regulators take a restrictive approach similar to the one China took two years ago, the Web3 industry Adams seeks to foster – including venture-capital funds and projects – is already leaving Silicon Alley and the rest of the nation. Both Hong Kong and New York, as financial industry leaders, are natural locations where the Web3 industry can flourish. Fortunately for Hong Kong, Beijing decided to support financial innovation. As part of Hong Kong’s steps to bring crypto back, regulators have created a stablecoin issuance playbook, and a Hong Kong Dollar-based stablecoin is apparently on the way. And, the Hong Kong Monetary Authority is officially pressuring major banking institutions in Hong Kong, such as Standard Chartered and HSBC, to accept crypto clients. Meanwhile, as the SEC sues crypto exchanges in the U.S., a Hong Kong politician has been courting them to establish operations in Hong Kong.
HSBC reportedly becomes first bank in Hong Kong to permit listed crypto ETFs
HSBC, the largest bank in Hong Kong, has reportedly made Bitcoin and Ether-based exchange-traded funds (ETFs) listed on the Hong Kong Exchange (HKEX) available to its customers. The move, is targeted at expanding local users’ exposure to digital assets. Currently, crypto ETFs listed on HKEX include CSOP Asset Management’s CSOP Bitcoin Futures ETF and CSOP Ethereum Futures ETF. A sub-subsidiary of Samsung’s investment arm offers the Samsung Bitcoin Futures Active ETF, on the exchange. By providing access to the ETFs, HSBC becomes the first bank in the special Chinese administrative region to enable local investors to buy and sell crypto ETFs.
SINGAPORE
Singapore’s Star Banker creates a succession dilemma for DBS
Singapore AI-Powered AR wearable Startup scores $3 million from Oculus And Siri Cofounders
Singapore’s traveler shopping app utu raises $33 million and acquires CardsPal
Singapore to change tax rules that attracted the super rich
The Monetary Authority of Singapore will change the tax incentives it gives to single family offices in an effort to boost the hiring of locals and investment in the country’s equity markets. Tax incentives will also be adjusted to encourage these firms to invest in climate-related projects and undertake more philanthropy through Singapore. Single family offices seeking so-called 13O and 13U tax exemptions must meet minimum asset under management and business spending requirements. Some of the changes to the tax structure are: Encouraging participation in blended finance structures, including those supporting the region’s transition to net zero. For grants that these entities provide to support such structures with no expectations of income or return of principal, authorities will recognize as S$2 ($1.48) for every dollar spent, among incentives All investments in non-listed Singapore operating companies including private credit will be recognized Recognition of twice the amount invested in Singapore-listed equities, and eligible exchange traded funds, as well as unlisted funds that invest primarily in locally listed equities.
The Chinese subsidiary of Singapore’s DBS Bank has launched a merchant collection solution for China’s e-CNY central bank digital currency (CBDC). Only a small number of Chinese banks have direct access to the digital yuan central bank system, with others working indirectly. In this case DBS is working with UnionPay Merchant Services. UnionPay is the state-owned organization that is the main provider of bank card services in China. Its role is similar to Visa and Mastercard.
Singapore’s Star Banker creates a succession dilemma for DBS
For more than 13 years, Piyush Gupta has led one of Singapore’s most iconic institutions, the bank that helped turn the Southeast Asian city-state into one of the richest countries in the world. DBS says Gupta isn’t going anywhere, the bank has been making moves that some see as precursors to eventually passing the baton. Han, also 55, worked at Citi for 27 years, running businesses including treasury and markets, corporate and investment banking and cash management. And Lim previously ran the Taiwan unit for almost five years, while also holding roles in areas including institutional banking. Bernstein who covered banks including DBS for more than a decade. Still, he says any selloff would be temporary because the “bench is prepared well” and Gupta “has already gotten the hardest part done.” DBS has been preparing for Gupta’s succession for about 10 years. The bank is looking for someone who can do things differently going into the next decade as technologies such as artificial intelligence increase in importance, asking not to be identified discussing confidential information. It was called Development Bank of Singapore, a nod to the role it was expected to play in financing the nation’s emerging industries. DBS went on to lead the initial public offerings of some of Singapore Inc.’s iconic companies, including Singapore Airlines Ltd. Under Jackson Tai, the chief before Stanley, the bank had suffered losses on collateralized debt obligations, along with its Singapore peers. Efforts to expand into emerging economies, a key ambition for Singapore banks stuck in a small local market, had also stalled. One early decision was to beef up transaction banking, a combination of cash management and trade finance that Gupta knew well from his time at Citi. Another was to strengthen wealth management, including through the 2014 acquisition of Societe Generale SA’s Asian private banking arm. In 2021, it was named the world’s best digital bank by Euromoney, a trade publication. It trades at 1.4 times book value, versus 1.1 times for Oversea-Chinese Banking Corp. and 1 time for United Overseas Bank Ltd., its two local peers.
Singapore AI-Powered AR wearable Startup scores $3 million from Oculus And Siri Cofounders
Brilliant Labs, a Singapore-based startup that develops augmented-reality wearables powered by ChatGPT, raised more than $3 million in a seed round from investors including cofounders of some of Silicon Valley’s best-known companies. Brilliant Labs recently rolled out its first product—a monocle-like AR device with a ChatGPT extension embedded which users can clip on an eyewear. Equipped with a built-in microphone and smart camera, the gadget allows users to build apps that can interface with ChatGPT and other generative AI apps. Brilliant Labs will use the fresh capital to expand its team and develop new AR wearables.
Singapore’s traveler shopping app utu raises $33 million and acquires CardsPal
Singapore’s utu has raised $33 million and acquired the rewards platform CardsPal. The acquisition and funding is designed to help consumers get the most out of tax-free shopping. Travelers that use utu’s tax-free card can gain added value by choosing frequent flier miles or hotel points over cash refunds, or an immediate store voucher equivalent of up to 120% of the value added tax (VAT) or GST tax paid while shopping overseas. Retailers and airlines, meanwhile, get the opportunity to potentially boost their revenues from tourist shopping.
The Monetary Authority of Singapore (MAS) announced the release of an open-source toolkit to enable the responsible use of Artificial Intelligence (AI) in the financial industry. The Veritas Toolkit version 2.0 , developed by an MAS-led consortium of 31 industry players, will help financial institutions (FIs) carry out the assessment methodologies for the Fairness, Ethics, Accountability and Transparency (FEAT) principles. The FEAT principles provide guidance to firms offering financial products and services on the responsible use of AI and data analytics. The Veritas Toolkit is the first responsible AI toolkit developed specifically for the financial industry.
CHINA
China launches first open-source desktop computer operating system OpenKylin 1.0
Tencent launches self-developed vector database to give users better access to large language models
Huawei eyes 5.5G market in 2024, increasing network capabilities
China Mobile unveils upgraded, next-gen version of 5G network
China launches first open-source desktop computer operating system OpenKylin 1.0
China launched the country's first open-source desktop operating system (OS) named OpenKylin 1.0, marking a breakthrough in building independent software system. The move, part of the nation's broader efforts to stand on its own feet on technology and science, will further narrow the gap with dominant Western technologies in the sector, industry observers said. The OS, based on Linux, was built by a community of 3,867 developers, 74 special interest groups and 271 companies. Kylinsoft rolled out the country's first root community of desktop OS OpenKylin last year, in an effort to gather the industry strength to boost the development of China's open-source ecosystem. The Chinese software firm is ranked top in terms of market share in domestic Linux OS segment. Its series of operating system products can be used in both the personal computers and mobile phones, and are widely used in such sectors as customs, energy and financial institutions.
Tencent launches self-developed vector database to give users better access to large language models
Tencent announced the launch of Tencent Cloud VectorDB, a vector database product for large language models (LLMs) training needs. A vector database is a structured collection of vectors, where each vector represents a data point or an entity. It plays a crucial role in training LLMs. Usually, LLMs require vast amounts of data to learn from, and a vector database enables efficient retrieval of similar data points, facilitates faster search operations, and provides a structured and organized representation of entities. By leveraging vector databases, training can be accelerated as the models can access and process relevant data points more effectively, leading to improved performance and generalization. Tencent Cloud proposes that vector databases should not only support natural language queries but also deeply integrate AI algorithms into the compute layer, storage layer, and database engine, thus improving the development efficiency of AI native applications. Tencent said its VectorDB is capable of shortening the time required for enterprise users to incorporate LLMs from one month to three days. Additionally, in the storage layer, the vector database has implemented intelligent compression algorithms, effectively reducing costs by 50%.
Huawei eyes 5.5G market in 2024, increasing network capabilities
Huawei Technologies plans to launch a complete set of commercial 5.5G network equipment in 2024, which will set a mainstream 5G standard for over 1 billion people within a few years, the tech giant said in Shanghai. Huawei explains the concept of a "5.5G Era" and releases the system, which will be commercially ready in 2024. It protects carriers' previous investment in 5G, while also improving network performance up to 10 times, the company said during the ongoing Mobile World Congress (MWC) Shanghai 2023. China, already the world's biggest 5G market, will be the first market in the world to have 1 billion 5G connections by 2025, and 1.6 billion by 2030, accounting for one-third of the global level, according to GSMA, the telecommunications industry association and organizer of MWC. The industry has widely agreed that 5.5G will be a key milestone in 5G evolution, and that it is fast approaching, Huawei said. The highlights of the 5.5G network upgrade include speed, computing capabilities and IoT (Internet of Things) coverage.
OCBC targets revenue boost from China-Southeast Asia links
Oversea-Chinese Banking Corp. unveiled a target to boost revenue from business flows between Greater China and Southeast Asia as trade between the key markets increases. Singapore’s second-largest lender aims to generate S$3 billion (US$2.2 billion) in accumulated revenue through 2025 by focusing on the two trade blocs. China’s slowing economic growth will be a test of resolve for OCBC and other global banks that are looking to expand in the nation. The revenue target suggests OCBC remains positive about its prospects in Greater China despite the mainland’s “bumpy” reopening from Covid restrictions “The reopening may support Asean-Greater China trade and investment flows.” The Singapore lender also outlined targets for its wealth business, including having 500 relationship managers and US$145 billion of assets under management by end-2025, up from over 400 and US$124 billion respectively.
China Mobile unveils upgraded, next-gen version of 5G network
China’s next-generation 5G development, known as 5.5G, features energy efficiency, enhanced computing capabilities and support for artificial intelligence and metaverse applications. The network upgrade supports new applications such as AI and metaverse as well as a wider range of industry integration, like the ongoing autonomous driving test in Shanghai. With smart network management, China Mobile now cuts energy consumption by 3.5 billion kilowatt hours annually, which helps the carrier to achieve its carbon reduction and neutrality targets. By 2025, the peak download speed will improve 10 times compared with the 1 Gigabyte per second in current 5G networks. The computing capabilities will surpass 20 EFLOPS then, a key measure for AI training and usage ability. China Mobile’s 5G network will be an “AI self-intelligent, cloud integration, low-carbon and efficient network” in the future, Li told the MWC Shanghai Forum in explaining the company’s definition of “5.5G network.” The spotlight upgrades include a mobile IPv6 network and New Calling services.
ASIA
South Korea sets out measures to promote competition in banking sector
India’s Flipkart begins customer lending in bid to boost sales
Thai SEC Issues New Rules for Crypto Firms, Bans Lending Services
Airline in Japan will rent out clothes so you can travel baggage-free
TikTok Shop’s amateur and improvised touch proves an advantage to gain $20 billion in GMV
JPMorgan says Southeast Asia benefiting from supply-chain shift
Ant Group persists in creating a regional payments ecosystem
South Korea sets out measures to promote competition in banking sector
The Financial Services Commission (FSC) and the Financial Supervisory Service (FSS) intend to allow more banking players to enter the market, with regional banks now receiving permission to expand their business operations across the country. Financial authorities will also work to bring about fair competition by requiring banks to provide more information about their business operations and products to the market so consumers can make informed decisions. They will also look to promote competition in the loan market through the country’s new online loan transfer system. Financial authorities will issue new banking licences “to those equipped with sufficient capital and a viable business plan”. This includes entry of new players such as internet-only banks and other types of specialised banks. Regulators also plan on creating conditions where nonbank financial companies and fintech businesses can compete with banks, including promotion of savings banks’ M&A activities and strengthening collaboration between finance and IT to create innovative products and services.
India’s Flipkart begins customer lending in bid to boost sales
Flipkart has begun lending to customers, expanding its financing offerings in a move that could potentially boost sales even as its chief rival Amazon has signalled a slowdown in India. The Walmart-owned Bengaluru-headquartered firm, in partnership with lender Axis Bank, is extending a credit of up to 500,000 Indian rupees, or $6,100, according to a description on its app. The loan, requiring no document submission and boasting a 30-second approval time, promises customers a seamless borrowing experience, the app says. By introducing personal loans, Flipkart expands its financial services portfolio, which already includes a ‘buy now, pay later’ option and a co-branded credit card.
Thai SEC Issues New Rules for Crypto Firms, Bans Lending Services
The Thailand Securities and Exchange Commission (SEC) has issued a new set of guidelines for crypto platforms including banning them from offering lending services to customers. According to the new SEC guidelines, these firms will have to disclose a warning about potential risks associated with cryptocurrency trading. Digital asset business operators will also provide investment suitability assessment results before customers begin trading. Additionally, customers will need to give their consent and acknowledge the risks of crypto trading before they proceed. The announcement by the Thai SEC comes just as the Monetary Authority of Singapore shared a list of its own requirements for Digital Payment Token (DPT) service providers. This includes having to segregate customers’ assets from its own assets and safekeep it under a statutory trust before the end of the year.
PeaCom, an AI-Powered startup specializing in multi-channel communication and customer engagement solutions, has officially launched in Southeast Asia, beginning with Singapore, Vietnam, Myanmar, and Laos. PeaCom distinguishes itself as the first platform in the market to operate seamlessly across multiple communication channels, such as RCS, Viber, Facebook, Telegram, Zalo, Google Business Message, Apple Business Message, and more, enabling consumers to engage with brands on their terms, across different languages and channels. By offering advanced features like AI-powered chatbots, dynamic messaging experiences, and real-time customer insights, PeaCom enables businesses to deliver personalized and interactive conversations. Within Southeast Asia, PeaCom has secured partnerships with regional giants such as Shopee and has gained access to the largest, tier-one enterprises in the airlines and digital TV industries through its strategic partner, Mobifone Global.
Visa and SAP partner on B2B payments in APAC region
Visa and SAP have partnered to digitize and speed up B2B payments in the Asia-Pacific (APAC) region. With this collaboration, Visa payments will be embedded into SAP’s ecosystem of solutions for enterprises. The embedded finance solution will debut in Australia, India, Japan, Malaysia, Singapore, Thailand and Vietnam. With the new embedded finance solution enabled by the partnership of Visa and SAP, enterprises will be able to pay suppliers seamlessly, even if they don’t accept card payments. The solution will help smaller businesses make B2B payments digitally and will help both buyers and suppliers manage their cash flow.
Airline in Japan will rent out clothes so you can travel baggage-free
Tourists and business travelers to Japan will soon be able to show up with little more than the clothes they’re wearing, thanks to an initiative by Japan Airlines Co. and Sumitomo Corp. to offer rental clothing during visits to the island nation. Describing the initiative as a bid to promote sustainable tourism while offering convenience, the airline said visitors will be able to select apparel based on size and seasonal needs via a website prior to boarding a Japan Airlines-operated flight. The service will run on a trial basis through August 2024. The rentable apparel will be sourced from clothing product overstock, helping to minimise waste. Japan Airlines will calculate the reduction in carbon emissions based on saved aircraft weight, and inform customers.
TikTok Shop’s amateur and improvised touch proves an advantage to gain $20 billion in GMV
Indonesia was the first market for TikTok Shop and is still its biggest, helped by a young, mobile-savvy population that’s embraced the combination of short videos and in-app shopping since its 2021 launch. TikTok Shop is expected by the end of this year, quadrupling from a year earlier. The operations have since grown more sophisticated as agencies like Wang’s Flame Media connect brands with livestreaming hosts and set up studios. Some businesses are assigned a TikTok account manager who offers advice on content and promotions, while others are sent trained performers, or influencers, to help brands reach millennials and Gen Zers. Yet the videos have retained a somewhat amateur and improvised touch compared with the carefully staged accounts on Instagram, and that’s considered a big reason for its popularity: shoppers feel a closer, authentic connection with the seller.
JPMorgan says Southeast Asia benefiting from supply-chain shift
Southeast Asian markets remain attractive as supply chain shifts away from China to the region will mitigate some of the impact from a slowdown in the world’s second-largest economy. The US bank is overweight Indonesia and Vietnam as those two markets have been at the forefront of attracting foreign direct investment flows from supply chain shifts as well as friend-shoring and nearshoring. It’s neutral on Singapore, while being underweight on Malaysia and the Philippines. The MSCI ASEAN stock index has fallen around 3.5% this year so far, lagging the MSCI global EM index which has offered returns of around 5% over the same period. Moreover, Southeast Asian central banks are expected to keep rates on hold in the second half. Policymakers in the region didn’t hike as much as their global emerging-market counterparts due to more benign inflation, so they’re likely to announce less rate cuts following the pause in the second half.
Ant Group persists in creating a regional payments ecosystem
One has to give Ant Group credit: Despite the bruising tech crackdown it has endured at home, it has not given up on its vision of creating a regional payments ecosystem. In fact, Ant arguably had the idea to link up the disparate markets of Southeast Asia via a proprietary digital payments network even before different countries in the region began to set up their own bilateral rails using QR codes. As a result, Ant has a hand in the payments market of every major Southeast Asian economy as well as South Korea and India. Yet the intense fragmentation the region’s payments industry makes creating any unifying regional payments rail difficult, as Ant is discovering with Alipay+. Ant believes that Alipay+ can reduce the friction of fragmented payments options by boosting interoperability – primarily, but not exclusively, in Southeast Asia. Given how consolidation has failed to materialize among Southeast Asia e-wallets – with a few exceptions like the Gojek-Tokopedia merger – Ant is offering what it sees as an attractive alternative In late June, Ant announced that Alipay+ would be accepted at the 2,400 7-Elevens across Malaysia, thanks to a tie-up with the payment gateway Razer Merchant Services, a B2B fintech focused on boosting digital transformation in Malaysia. Anext had US$359 million in equity funding from Ant Singapore SME Services, which holds 100% of the bank’s shares, as of March. Geopolitical tension has impacted the businesses of many Chinese fintechs in the subcontinent, but the stakes are high for Ant given its nearly 25% stake in Paytm. It is possible that the sale by Ant of its stake might help Paytm in its various regulatory travails. Thus, it can be expected that Ant will eventually exit that stake in Paytm as Alibaba did.
-
And that's it for this week's What The Fintech 🎉 We hope you've found our selection of Asia's fintech trends, innovations, and insights both informative and valuable. Your feedback and suggestions are important to us, so please share your thoughts to help us curate content that matters most to you. 🌟
Interested in sponsoring our newsletter? Don't hesitate to reach out – we'd love to discuss partnership opportunities! 💼
Stay connected and engaged by following me on LinkedIn, Instagram, Twitter, YouTube, and Telegram. Catch the annotated edition of this newsletter on Monday or Tuesday, and don't miss my daily tweets @medhy_souidi for the latest fintech updates! 🚀🔥💸
Until next week, keep exploring the future of finance together! ✨
Your Fintech Navigator,
Medhy
🔗 Follow me on LinkedIn / Instagram / Twitter / YouTube / Telegram