What The FinTech #161 - 26 Nov 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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What The FinTech #70: Fireblocks - Navigating the Future of Digital Asset Security
🚀 Excited to share our latest "What The FinTech" episode featuring Amy Zhang, VP of Sales at Fireblocks.
🌐 Dive into the heart of digital asset security as we explore Fireblocks' innovative approach to protecting and managing digital transactions and storage. Amy sheds light on the challenges and solutions in building secure, scalable infrastructures for digital assets.
🔍 Key insights:
The synergy between security and efficiency in Fireblocks' operations.
Navigating the complex world of cryptocurrency regulations.
Fireblocks' role in the growth of DeFi and the future of digital finance.
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🎙️🎧 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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Apple Podcast ⭐⭐⭐⭐⭐
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Amazon Podcast ⭐⭐⭐⭐⭐
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What was the FinTech this week in: 📰
HONG KONG
Hong Kong’s RD Wallet to combine currencies for cross-border payments
A digital wallet produced by fintech company, Technologies, will integrate banking and e-commerce applications that enable traditional cross-border payments to be made as well as crypto. Digital wallets have a fragmented place amongst Hong Kong’s cash-legacy economy much like mainland Europe and the rest of the world excited about wallets but still fine-tuning their openness on standards and technical interoperability while even navigating the potential to intermix real and cryptocurrencies. With 9 in 10 consumers having used a digital wallet, China has been just as receptive to digital credentials but enwrapped in the necessary licensing requirements. With no national wallet, bankers like the fintech founder, Norman Chan Tak-lam, or other firms focused on stablecoins or Web 3.0 could emerge in the near future, but China is looking to stabilize the emerging digital banking space at least by 2024. The RD Wallet will see other fintechs pushed to innovate China’s economy further into the financial capital of the world, converting multiple dominant currencies: the Hong Kong dollar, the yuan, the US dollar, the yen, and the euro. A stored-value facility license for the RD wallet came into effect in December, giving the final approval from the Hong Kong Monetary Authority (HKMA) in April.
J.P. Morgan first to launch Hong Kong dollar pair foreign exchange warrants
J.P. Morgan announced the launch of new Hong Kong dollar pair FX Warrants in the Hong Kong market, making it the first issuer in Asia to introduce FX Warrants with CNH/HKD (Chinese Renminbi traded outside Mainland China / Hong Kong dollar) and JPY/HKD (Japanese Yen / Hong Kong dollar) as underlying currencies pairs. The new FX Warrants will begin trading on the Hong Kong Stock Exchange on November 23, 2023. J.P. Morgan’s new FX Warrants linked to currency pairs with foreign currencies as the base currency and HKD as the quote currency, align with growing investor demand. This convention not only supports investors’ ability to analyze currency movements but also empowers them to capitalize on directional views. These FX Warrants also enable investors with overseas assets to easily manage foreign exchange risk and hedge against currency fluctuations.
SINGAPORE
Singapore-based Climate Alpha analyzes the impact of climate change on real estate
Climate Alpha’s AI-based platform helps real estate owners and investors analyze the impact of climate change on their portfolios. The Singapore-based startup has raised $5 million in seed funding led by Jungle Ventures through its new First Cheque@Jungle program for second-time founders and operators with a lot of experience. Climate Alpha’s customers include institutional investors like Oaktree Capital Bentall GreenOak, and American homebuilder Lennar Corporation. The platform uses Geographic Information System (GIS) data and economic modeling to help real estate owners understand the impact climate change will have on their property. It also uses public and private data streams and proprietary machine learning algorithms to generate forecasts of climate change’s financial impact.
PayMate launches in Singapore, Malaysia, and Australia to streamline B2B payments in supply chains
Digital B2B payments firm PayMate is now doing business in Singapore, Australia, and Malaysia. Based in India, PayMate’s service digitizes, automates, and streamlines B2B payments in supply chains to help companies move away from paper-based workflows. The company’s expansion to these new territories follows recent expansions in Central Europe, Sri Lanka, Saudi Arabia, Oman, and South Africa. PayMate has worked with Omani bank Sohar International on a partnership designed to digitize, automate, and streamline B2B payments in Oman using bank-issued corporate credit cards. PayMate is also considering setting up operations in other Asia-Pacific (APAC) region countries, including Vietnam, Thailand, the Philippines, Hong Kong, and New Zealand.
Singapore regulator launches live pilot for wholesale CBDC in Singapore Dollars
The Monetary Authority of Singapore (MAS) unveiled a pilot program for the live issuance of a wholesale Central Bank Digital Currency (CBDC) denominated in Singapore dollars. Previously, MAS had only simulated the issuance of a CBDC in controlled test environments. The new initiative aims to explore the feasibility and efficiency of using a CBDC for instantaneous settlements across commercial banks. As part of the test program, MAS will collaborate with local banks to explore the use of CBDC as a settlement asset for domestic payments. participating banks would issue tokenized liabilities representing claims on their balance sheets. Retail customers could then utilize these tokenized liabilities for transactions with merchants, with settlements occurring via an automatic transfer of wholesale CBDC.
MAS and BNM launch cross-border real-time payment tool
The Monetary Authority of Singapore and Bank Negara Malaysia have partnered to launch a cross-border real-time payment system connectivity between PayNow and DuitNow. Customers will be enabled to transfer funds instantly between the two countries by leveraging the recipient‘s mobile phone number or Virtual Payment Address (VPA). Furthermore, the product will allow person-to-person (P2P) cross-border fund transfers via PayNow and DuitNow in a secure and efficient manner, in order to meet the needs, preferences, and demands of clients from the regions of Singapore and Malaysia. The PayNow-DuitNow linkage is set to allow instant, secure, and cost-effective P2P fund transfers and remittances, as it focuses on providing access to cross-border payments and transfers to a broader group of customers and individuals. Clients of participating financial institutions are given the possibility to send and receive funds of up to SGD 1.000 and MYR 3.000 daily by leveraging the recipient‘s mobile phone number or VPA.
CHINA
Mastercard secures bank card clearing authorization in China
Mastercard has obtained the green light from Chinese regulators to begin bank card clearing operations in the country, marking a significant step in China’s efforts to open up its financial sector to international players. The People’s Bank of China (PBOC) and the National Financial Regulatory Administration approved the Mastercard NUCC joint venture’s operation for Yuan-denominated bank card clearing on Sunday. This approval allows for the issuance of Mastercard-branded cards within China, indicating a more inclusive approach by the Chinese authorities towards foreign financial services companies. Mastercard follows American Express (NYSE:AXP), which entered the market in 2020, becoming the second foreign card-clearing company to set foot in the world’s second-largest economy. The entry of international entities like Mastercard into China’s payment industry is expected to enhance the depth of the market, offering more choices for consumers and businesses alike. It also reflects China’s pledge to foster an environment conducive to innovation and international cooperation in its financial sector.
Chinese firms in sprint to cultivate generative AI
China’s technology giants are racing to develop generative artificial intelligence (AI) to compete with US companies, launching their own large language models (LLM) to support a wide array of uses, ranging from weather forecasts and financial analysis to 3D e-commerce. The goal is improved enterprise productivity and delivering an immersive experience to users. There is tremendous opportunity in the coming decade for AI growth in new sectors in China, including areas where innovation and R&D spending have traditionally lagged behind global counterparts, such as automotive, transport, manufacturing, healthcare, and life sciences.
Metaverse No More? ByteDance and Tencent scale back VR ambitions
Two years after ByteDance acquired Chinese VR (virtual reality) headset manufacturer Pico for a whopping $1.3 billion, the tech giant is now reportedly downsizing and restructuring its VR division. Tencent is reportedly partnering with Meta Platforms to serve as the exclusive distributor of new, more affordable VR headsets in China with sales expected to begin in late 2024. Meanwhile, Meta‘s Quest 3 VR headset also failed to meet expectations in the U.S. The latest survey by analyst Ming-Chi Kuo indicates that Meta has reduced its Q4 shipment volume for Quest 3 by approximately 5%–10% this year, after market demand fell short of expectations. The company aims to sustain its research endeavors at a minimal cost, while awaiting a potential resurgence in the VR market at a later date.
Chinese tech giants, including Alibaba Group Holding and Tencent Holdings, are feeling the pinch of the latest US chip export controls but have plans to minimize the impact. Tencent boasted ―one of the largest inventories of AI chips in China among all the players‖ because it was first to put in orders for Nvidia‘s H800, a data center GPU tailored-made by the US chip maker for its mainland Chinese clients. Tencent will try to make the most of its AI chip supply by offloading inference work to lower-performance chips and reserving most of its high-performance AI chips for training purposes. However, under the new export rules, the future looks even dimmer for China‘s AI industry, as the restrictions will slow the country‘s progress in developing large AI models.
ASIA
Etaily is a “one-stop solution” for consumer brands that want to enter Southeast Asia
Etaily announced has raised $17.8 million in Series A funding. Etaily’s ecosystem includes end-to-end solutions for e-commerce and omnichannel global brands, along with its own portfolio of brands. The startup has about 50 global clients, including Levi’s, Crocs, Reckitt and Skechers who use it to develop lifestyle products, manage selling on platforms like Lazada and Shopee and brand.com, and fulfill orders through etaily’s asset-light warehouse network. So far, it has processed over 10 million orders, and expects to reach gross sales of $40 million this year, with a target of $100 million by 2025. Etaily will use its Series A to expand in Southeast Asia, especially in Malaysia, Indonesia, Singapore, and the Philippines, work on its distribution platform for brands and expand its portfolio of brands (including its in-house brands). It also plans to invest in its proprietary tech, including an operating system, data analytics and Clarity.
South Korea to pilot CBDC for purchasing goods with citizens in 2024
Under the pilot project, jointly operated by the Bank of Korea (BOK) and financial authorities, 100,000 selected individuals can purchase goods with deposit tokens issued by commercial banks in the form of CBDC, similar to using a voucher at the store. The BOK explained that the digital currencies have the potential to significantly address challenges with existing voucher systems, such as special grants during COVID-19 and childcare grants offered by the government. The challenges include high transaction fees, slow settlement processes, limitations of post-transaction verification and concerns over fraudulent claims. However, participants will be restricted to using the currency solely for its designated purpose of payment. Other uses, including personal remittance, will not be permitted at this time. Additionally, technological experiments will be conducted to evaluate the feasibility and effectiveness of issuing and distributing these new forms of financial products. For instance, the BOK will collaborate with the Korea Exchange to integrate the CBDC into a simulation system for carbon emissions trading. This will include testing the feasibility of delivery versus payment transactions between carbon emissions rights and the payment tokens.
TikTok looks to GoTo to jumpstart Indonesian eCommerce Business
TikTok is reportedly turning to GoTo to revive its crucial Indonesian eCommerce business. The two firms are working on a plan that would see TikTok invest in Indonesia-based GoTo’s online shopping arm Tokopedia. Rather than a direct investment, the two companies could form a joint venture, building a new eCommerce platform that would allow TikTok to revitalize its online shopping business in what is the largest market in Southeast Asia. The move follows new measures announced by Indonesia in September to regulate the use of eCommerce via social media. The rules bar social media platforms from handling direct payments for online purchases, a distinction that really only applies to TikTok. That means the company could advertise products to its more than 100 million Indonesian users, but those customers would need to jump to a different site or app to make purchases.
Grab Malaysia testing fare bidding feature in selected towns
Grab Malaysia is testing a fare bidding feature where passengers can propose the ride price for drivers to accept or make a counteroffer. Some users on social media claimed to have received notifications about the feature in Grab Academy, an in-app learning section in the Grab driver-partners app. Screenshots with details about the feature have also been shared by the users on social media. The feature is described as “optional” for both passengers and drivers. Fixed fare features such as Just Grab and GrabCar will still be available. Drivers must first decide to turn on the feature if they want to participate in fare bidding rides. The fare bidding starts with a passenger request, where they will suggest a fare that they are willing to pay for the requested ride. Then drivers have 15 seconds to accept the fare or counteroffer with a different fare. The counter-offer amount will be shown on the app for the driver to propose. The passenger can then choose their preferred drive based on the offer received. Drivers will be notified in 15 to 20 seconds if they have been selected by the passenger for the ride.
Grab Thailand is planning to offer loans to merchants
Grab Thailand plans to extend loans worth up to 1 million baht to its merchants to capitalize on digital lending opportunities, aiming for profitability for a second consecutive year in 2023. 57% of restaurant operators are seeking cash loans to enhance their liquidity for daily operations, while over 25% require funds for business expansion. In response to the needs of these merchant partners, Grab Thailand has introduced such loan products for juristic merchant partners for the first time, featuring a maximum credit limit of up to 1 million baht with an instalment period of six months and a minimum interest rate starting at 1.25% per month with no additional fees. Additionally, Grab has expanded the credit limit for personal loans for individual merchant partners to 750,000 baht, up from 500,000 baht, and extended the instalment period from six to nine months. The loan offers a maximum interest rate reduction of 2.08% per month with no additional fees.
Enjoying seamless QR payments in Indonesia, Thailand, and Malaysia
UOB is expanding its cross-border QR payment service to Indonesia and Thailand, as well as its real-time fund transfer service to Malaysia. Customers in Singapore can now make payments by scanning Indonesia‘s standard QR or Thailand‘s Prompt Pay QR through their UOB TMRW app when they travel to these countries, just as they scan and pay with Nets QR back home. The new services follow the launch of QR code payment linkage between Singapore‘s Nets QR and Indonesia‘s Quick Response Code Indonesian Standard (QRIS).
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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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