What The FinTech #151 - 17 Sep 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! 🌊💡💸
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Hope you all had a fantastic summer. While our latest podcast episode and video are in the works and set to resume later this month, why not revisit some of our past gems?
🎙️🎧 Dive into previous sessions for a mix of insights and exciting discussions. 🎥🚀 Stay tuned for what's coming, and as always, your likes, give a 5⭐, shares, and subscribes mean the world! Keep the fintech vibes strong! 💪🎉
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What was the FinTech this week in: 📰
HONG KONG
Tencent-Backed Tuhu Car plans Hong Kong IPO
Tencent backed Tuhu Car plans to raise up to 1.26 billion Hong Kong dollars ($160.89 million) through an initial public offering in Hong Kong. it plans to sell nearly 40.62 million shares, and is marketing them at a price range of between HK$28 to HK$31 a share. Tuhu provides integrated online and offline platforms for automotive service in China. Tuhu expects to finalize the IPO price on Sept. 19, and expects its shares to start trading on the Hong Kong exchange from Sept. 26.
SINGAPORE
Revolut Singapore onboards animal welfare groups SPCA and SOSD to donations platform within app
Global financial app, Revolut, will be donating part of its proceeds from its personalised cards to the Society for the Prevention of Cruelty to Animals (SPCA) and Save Our Street Dogs Singapore (SOSD) on Sept 14. The SPCA and SOSD will be onboarded to Revolut Singapore’s in-app donations platform, where the app’s customers can donate to their favourite charities and non-profit organisations easily. The role of animal welfare organisations like SPCA and SOSD has become increasingly important to promote education, rehabilitate and find a new home for these animals. To encourage its customers to support both charities, Revolut Singapore is now enabling its customers to personalise their cards. Previously available only to Revolut’s paid customers, the platform’s standard customers can personalise their cards with text messages, emojis and freehand sketches from now until Nov 4. The cards will cost $9.99 each, of which $2 will go directly to the charity partners (SPCA and SOSD will receive $1 each).
Regulator MAS of Singapore tests blockchain Purpose Bound Money voucher promotion with Grab ride hailing and Singapore Grand Prix
Leading Asian taxi and delivery platform Grab has launched a blockchain-based voucher promotion linked to the Singapore Grand Prix. Last year the Monetary Authority of Singapore (MAS) unveiled Project Orchid for programmable payments or purpose bound money (PBM). The Grab web3 initiative that uses NFTs is one of several PBM trials. Conceptually, a visitor buys a voucher pack described as an “NFT voucher” because each pack is unique. Under the hood, the NFT unlocks a quantity of straitsX XSGD stablecoins with conditions attached. Users can only spend the stablecoins at certain outlets. At a few merchants, the user receives a digital collectible NFT when they make a purchase. The web3 firms involved are the Singapore regulated stablecoin issuer straitsX, and Circle, which in this case provides its new web3 services platform rather than its USDC stablecoin. Grab uses the Polygon blockchain.
MAS Singapore regulator tests blockchain Purpose Bound Money with Grab ride hailing
Leading Asian taxi and delivery platform Grab has launched a blockchain-based voucher promotion linked to the Singapore Grand Prix. Last year the Monetary Authority of Singapore (MAS) unveiled Project Orchid for programmable payments or purpose bound money (PBM). The Grab web3 initiative that uses NFTs is one of several PBM trials. Conceptually, a visitor buys a voucher pack described as an “NFT voucher” because each pack is unique. Under the hood, the NFT unlocks a quantity of straitsX XSGD stablecoins with conditions attached. Users can only spend the stablecoins at certain outlets. At a few merchants, the user receives a digital collectible NFT when they make a purchase. The web3 firms involved are the Singapore regulated stablecoin issuer straitsX, and Circle, which in this case provides its new web3 services platform rather than its USDC stablecoin. Grab uses the Polygon blockchain.
Digital trading platform MetaComp offers clients Stablecoin-to-TradFi security path, claiming Singapore First
MetaComp, a digital asset platform, said it is offering clients the ability to buy traditional securities such as money market funds and U.S. Treasury bills for stablecoins – which it converts to fiat – in a first for Singapore. The firm has accepted stablecoins tether (USDT) and USD Coin (USDC) from as many as 10 of its institutional and accredited investors. The service kicked off last month and has already resulted in volumes of around $50 million. MetaComp is providing the service across Asia. Tether is the most-traded cryptocurrency, with volume of $22.6 billion in the past 24 hours, more than bitcoin and ether – second and third placed respectively – combined.
Grab Shares dip as Singapore launches review of ride-hailing regulations
The Land Transport Authority (LTA) of Singapore will review the ride-hailing and taxi industries, causing shares of Southeast Asian super provider Grab to dip 8%. Grab, whose services include ride-hailing, saw its shares lose the gains they had made over the past three weeks. The LTA of Singapore has launched a review of the Point-to-Point (P2P) industry structure and regulatory framework to ensure its continued relevance and adaptability. P2P transport, which includes traditional taxis and ride-hailing services, plays a role in complementing the mass public transport system and providing commuters with transportation options. The review by the LTA focuses on three key objectives, the release said. Firstly, it aims to improve the availability of P2P supply throughout the day, including addressing shortages during late-night hours. Secondly, it will assess the resilience of P2P services, ensuring minimal disruptions and downtime as these services become increasingly important in the daily lives of Singaporeans. Lastly, it will examine the inclusivity of P2P transport, which needs to cater to the additional requirements of commuter groups such as wheelchair users and families with young children. The LTA plans to consult with its partners, including operators and P2P drivers, as well as reach out to different commuter groups to gather their perspectives and feedback, per the release. The authority expects to complete the review by the second quarter of 2024.
Grab super app Web 3.0 features launched for users in Singapore
Ride-hailing app Grab has announced the addition of Web3 functionalities to its service, designed to offer Singaporean users novel ways to interact with the platform. The app’s latest functionalities will allow users to create a Web3 wallet with the push of a few buttons without the need to exit the application, Tech in Asia reported. Per the report, Grab will offer customers non-fungible token (NFT) vouchers from eligible restaurants in the country. The NFT vouchers, depicting famous landmarks, have the additional functionality of earning holders new rewards, such as discounts on purchases. The NFT vouchers can be used to make payments at select enterprises, including the Mint Museum of Toys, stored on the digital wallet hosted on the Polygon network.
Citibank Singapore is Ranked No. 1 among banks for customer experience in report by independent research firm
Citibank was the top-ranked bank for the second time in three years, in an annual Singapore customer experience study by global research and advisory firm Forrester. The global bank took top spot among multichannel banks in the Forrester Singapore 2023 Customer Experience Index (CX Index™) released today. The study focuses on the quality of customer experience among the financial services brands in the banking and automotive/home insurance sectors. The latest Forrester recognition follows Citibank being ranked the #1 bank in the Singapore’s Best Customer Service Award by The Straits Times and Statista in 2022, and winning The Asset Triple A Digital Award in 2022 for Best Retail Online Banking Experience in Singapore.
Standard Chartered-Backed Zodia custody now available in Singapore
Zodia Custody, a cryptocurrency storage provider and a subsidiary of Standard Chartered (STAN), has launched in Singapore, to provide digital asset custody services for financial institutions. Custody in Singapore is not a licenced activity yet and therefore Zodia Custody does not need a licence but it wants to be in pole position for when the time comes. The development marks a rare marriage of a traditional financial institution and a digital asset firm in Singapore. Zodia Custody is already registered in the U.K., Ireland, Luxembourg and has an application pending in Japan. Standard Chartered has been working in collaboration with the Monetary Authority of Singapore (MAS) and other financial institutions on an initiative called Project Guardian to test asset tokenization. Standard Chartered is also developing an initial token offering platform to issue asset-backed security tokens listed on the Singapore Exchange.
Singapore regulatory sandbox lacks qualified crypto payment providers
The Monetary Authority of Singapore (MAS) has said that no businesses have qualified to participate in its FinTech Regulatory Sandbox framework as cryptocurrency payment providers. Responding to a letter criticizing the Singaporean government’s lack of public consultation and oversight on crypto adoption published in the Financial Times, the MAS clarified that the country does not have a “crypto sandbox” but rather a sandbox that supports a broad range of fintech experimentation. The letter criticized Singapore for “unwisely” allowing crypto companies access to Singapore’s Fast and Secure Transfers (FAST) interbank payment system. The electronic funds transfer system enables customers of participating entities to transfer Singapore dollar funds from one entity to another in Singapore. All businesses with a valid bank account can access the FAST system, including crypto businesses, stating, “Payments through FAST are in fiat currencies, not cryptocurrencies.”
CHINA
China economy shows stability signs as credit and inflation improve
China’s credit demand improved, deflationary pressures eased and the yuan rallied, adding to a recent trickle of signs that the economy and financial markets may be stabilising after a sharp downturn. The yuan gained after the central bank escalated its defense of the currency. Those add to the encouraging signs from the weekend, with consumer prices returning to gains after a drop in July — albeit by the slimmest of margins. Factory-gate deflation also narrowed. The world’s second-largest economy is trying to regain traction as an ongoing property crisis and weak confidence drag on its recovery, creating risk for the government’s annual growth target of about 5 per cent. The improvement in the August data suggests July’s grim figures — which showed consumer prices tipping into deflation and monthly loans plunging to a 14-year low — may have been the worst of the slump. The benchmark CSI 300 Index rose 0.7 per cent on Monday, snapping a four-session losing streak. The yuan also rallied after falling to its weakest since 2007 against the dollar last week as the People’s Bank of China issued forceful guidance and stressed its confidence in keeping the yuan stable.
Tencent Cloud and Ankr join forces to unveil cutting-Edge blockchain service
Tencent Cloud has partnered with Ankr, a prominent decentralized blockchain infrastructure provider, to introduce Tencent Cloud Blockchain RPC. This innovative Web3-native product is geared towards empowering organizations and enterprises with more efficient and robust access to blockchain infrastructure. Now available on Tencent Cloud‘s online marketplace, this service offers instant access to key blockchain networks such as Ethereum Mainnet, BNB Smart Chain, and Polygon PoS.The Blockchain RPC Service is specifically engineered to handle a substantial volume of requests, with the capacity to support up to an impressive 1,800 requests per second per chain. Tencent Cloud Blockchain RPC is designed with efficiency and accessibility at its core. It provides a seamless gateway for organizations to tap into the potential of blockchain technology without the complexities typically associated with blockchain infrastructure setup and management. One of the standout features of Tencent Cloud Blockchain RPC is its ability to grant instant access to major blockchain networks. Whether you‘re looking to engage with the Ethereum Mainnet, BNB Smart Chain, or the Polygon PoS network, this service provides a userfriendly portal to these vital blockchain ecosystems. This accessibility opens up a world of possibilities for businesse looking to integrate blockchain into their operations.
ASIA
Why Southeast Asia will never have an Alipay Or Tenpay
Southeast Asia’s largest platform companies all reported second quarter earnings recently. Some results were better than others, but Sea Group, Grab and GoTo all continue to struggle with the fundamentals. In their early years, the two had almost no serious competition, which meant that they did not need to spend constantly to subsidize customers like Sea, Grab and GoTo. The clock is ticking: Sea was founded in 2015, Grab in 2012 and the two companies from which GoTo was formed in 2021, Gojek and Tokopedia, were founded in 2010 and 2009 respectively. While Alipay and Tenpay built their respective super apps from e-commerce and messaging, with which they later integrated digital financial services, both Grab and GoTo are betting that they can thrive starting off from ride hailing. If we look at UberUBER -2.1% and Lyft – companies that the Southeast Asian platform companies emulated – they respectively lost $8.8 billion and $1.2 billion in 2022, and have never been profitable. In its second-quarter earnings release, the Singapore-based company reported that its mobility gross merchandise value for the quarter was $1.32 billion, up 28% from $1.03 billion a year earlier. The good news for Sea, Grab and GoTo is that even if they cannot be Southeast Asian super apps, their respective fintech businesses all have strong potential. GoTo has a foothold in the digital financial services market thanks both to its investment in the local lender Bank Jago and its GoPay app. Compared to Grab and GoTo, Sea’s fintech business is more mature, with full-fledged digital banks in Singapore, Malaysia, the Philippines and Indonesia. In the second quarter, Sea’s digital financial services revenue rose 53.4% annually to $427.9 million, while adjusted EBITDA was $137 million, as compared to a loss of $111.5 million for the second quarter of 2022. Overall, Grab, GoTo and Sea may eventually have to pare down, spin off or otherwise exit loss-making businesses if they want to be successful in digital financial services, where they compete against many competent pure-play fintechs.
UBS to cut hundreds of wealth jobs in Asia as activity slows
UBS Group AG is cutting hundreds of wealth jobs in Asia just months after completing its takeover of rival Credit Suisse as the bank responds to muted client activity and China’s slowing economy. The lender is set to eliminate a few hundred roles that include relationship managers in Hong Kong and Singapore, the majority within teams newly acquired from Credit Suisse, the people said. The number of cuts hasn’t been finalized, they said. The lender plans to keep the majority of private bankers in Australia and India for now.
Asia’s ultra-rich population records largest drop in the world
Asia’s ultra-high-net-worth population declined by about 10.9% last year, marking the largest regional drop in the world. Tech-heavy markets like South Korea and Taiwan bore the brunt of the compromised exports and consumption that arose from the war. Ultra-high-net-worth (UHNW) individuals are those with a net worth of more than $30 million. The combined net worth of Asia’s super rich population was at $12.13 trillion compared with Europe’s $11.73 trillion. Europe recorded the second-worst regional performance, with a 7.1% fall to 100,850 high-net worth individuals. The “direct fallout” from Russia’s invasion on Ukraine was substantial. North America, the world’s largest ultra wealth market with a combined net worth of $16.47 trillion, posted a 4% fall to 142,990 individuals.
Why going 100% digital might not be the solution in Asia
Three companies unveiled a project to enable offline digital rupee payments using feature phones. In a rapidly digitizing world, many Asian countries are going cashless in order to create better, faster, and cheaper payment infrastructure. While cashless transactions offer clear benefits, significant barriers exist to achieving a completely cashless society. Infrastructure limitations, inadequate digital literacy, and disparities in access to technology hinder the widespread adoption of digital payments in many Asian countries. Cash transactions are anonymous, whereas digital payments leave a digital trail. Cashless payments require access to smartphones, card readers, or other digital payment devices. In regions with limited access to technology, such as rural areas or underdeveloped countries, going cashless can exclude a significant portion of the population. While the benefits of cashless payments are enticing, achieving a completely cashless society has several practical limitations. While the younger generation may be more comfortable with digital technology, there are still significant portions of the population, particularly the elderly, who are not as proficient in using digital devices or understanding digital payment systems. This lack of digital literacy can hinder the adoption of cashless payments, as individuals may be reluctant to embrace technologies they do not fully understand. As technology continues to advance and become more accessible, the barriers to adopting cashless payments are likely to diminish. Striking a balance between cash and cashless payments is essential to ensure that individuals from all walks of life can participate in the economy. By considering the needs of the unbanked and underbanked population, addressing security concerns, and investing in infrastructure, societies can embrace the benefits of cashless transactions while safeguarding financial inclusion and accessibility. Infrastructure limitations, inadequate digital literacy, cultural preferences, and the role of cash in informal economies pose significant barriers to achieving a completely cashless society. Striking a balance between cash and cashless payments is essential to harness the benefits of digitization while ensuring financial inclusion for all. Only through careful consideration of practical limitations and a focus on inclusivity can we create a future where cash and cashless payments coexist harmoniously, empowering individuals and economies alike.
Mastercard & Invest India launch program to redefine experiential travel
Mastercard and Invest India, with the support and guidance from the Ministry of Tourism, have launched an enhanced ‘priceless.com’ to redefine experiential travel in India and provide an immersive cultural odyssey to international and domestic travellers. The priceless.com launch in India is an extension of Mastercard’s global priceless platform that offers over 2,000+ curated experiences across a spectrum of passion points for Mastercard cardholders in 40+ countries. Priceless.com will aim to provide compelling experiences across ten dynamically evolving passion points, including culinary, sports, entertainment, and wellness. The relaunch of ‘priceless.com’ in India is part of Mastercard’s global effort to create memorable, once-in-a-lifetime experiences for its cardholders.
Bankers see risks in new voice payment feature on India’s UPI
India’s rapidly developing instant payments system, the Unified Payments Interface, drove digitization in the world’s most populous country. Now, risks need to be managed for its new voice-enabled feature to ensure further inclusion, according to bankers. The government-backed feature called Hello UPI will allow users to pay via apps and calls in Hindi and English, and will soon roll out services in other regional languages. The launch of this artificial intelligence-powered service seeks to widen access of digital payments to more people, including the elderly, though adoption could be tentative at the start. With Indians exchanging billions of messages each day on messaging apps, the take-up of this technology would accelerate even if between 1 per cent and 10 per cent of customers begin making voice-enabled payments. The voice feature is one of several additions to UPI that has helped make QR-powered payments ubiquitous across India in the last few years. Millions use their smartphones to make purchases of small items like vegetables, or to transfer salaries to household staff. More than 10 billion transactions were carried out in August and this number is steadily rising.
Companies to develop offline Indian CBDC payments with feature phones
Three companies unveiled a project to enable offline digital rupee payments using feature phones. The firms involved in the central bank digital currency (CBDC) project are identity firm IDEMIA, Airtel Payments Bank and HMD Global, which owns Nokia. There are 650 million smartphone users in India and another 350 million that use feature phones. So if the digital rupee is to enable financial inclusion, it will need to reach feature phone users, who won’t have internet access in most cases. The only drawback is if it only targets Nokia phones. Nokia only accounts for an 11% market share, which is likely new phone sales. While IDEMIA may not be a household name, the identity company is substantial, with more than 15,000 employees and €2.6 billion ($2.8bn) in revenues. It has also been active in CBDC for a little while. Together with CBDC specialist Bitt, it won the 2022 G20 CBDC Techsprint for an offline wallet. It has also been involved in CBDC work in the UK, Singapore and Japan. Meanwhile, in other digital rupee news, payments can now be made using UPI QR codes, which means the CBDC is usable at a huge number of outlets.
JPMorgan says India’s ‘trailblazing’ rules set to boost ESG market
India’s new rules for environmental, social and governance investments and ratings are likely to attract more investors to the nation’s $1.4 billion market and serve as a model for other countries. India is among the first in the world to regulate ESG rating providers and the country’s minimum requirement for funds to invest — according to their stated strategy — is “a high bar. at least 80% of total fund assets must be invested in equity and equity-related instruments that align with the stated strategy. It makes India’s the highest benchmark in Asia, Lee said. In Singapore and the Philippines, the threshold is about 67%. The European Securities and Markets Authority has proposed an 80% threshold for all funds with names that use ESG-linked labels. Europe’s strictest designation for sustainable funds, Article 9 or “dark green,” requires 100% alignment, a high bar that led some asset managers to reclassify their funds under the more lightly restricted category Article 8, or “light green.”
Singapore tokenization platform ADDX to expand to Middle East
Singapore‘s ADDX announced plans to expand into the Middle East and North Africa (MENA). The regulated tokenization platform and private exchange has raised US$140 million in venture capital, primarily from numerous major Asian financial institutions. These include the Singapore Exchange (SGX) and the Stock Exchange of Thailand (SET). Its expansion into MENA aims to help pre-IPO companies leverage blockchain to raise funds. ADDX has been one of the most prolific tokenization platforms, listing more than 80 deals so far. These have not just been for pre-IPO companies. The platform enables the so-called fractionalization of assets. While the denominations can be significantly smaller than conventional markets, investments are only available to accredited investors.
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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. 🌟
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Until next week, keep exploring the future of finance together! ✨
Your Fintech Navigator,
Medhy
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