What The FinTech #162 - 3 Dec 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.
Grab your favorite beverage, and get ready to ignite your curiosity with the latest and greatest from the fintech universe! Let's dive in! 🌊💡💸
***
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.
-
🎙️🎧 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! 💪🎉
Spotify ⭐⭐⭐⭐⭐
Apple Podcast ⭐⭐⭐⭐⭐
Google Podcast ⭐⭐⭐⭐⭐
Amazon Podcast ⭐⭐⭐⭐⭐
-
The Fintech Frontier: Powering Today, Disrupting Tomorrow
Asia is the hottest destination for groundbreaking ventures and unprecedented opportunities. With boundaries shattered like never before, the moment to shape the future has never been greater.
In 2024, our Money20/20 Asia programme will delve into the ‘Now’ and ‘Next’ of fintech in Asia through the three conference themes:
Integration: Breaking Down Barriers, Creating Opportunities
Virtualisation: The Rise of Digital Finance
Eastward Expansion: Asia's Fintech Frontier
Do you have a story to tell? Call for speakers is now open! Read more to learn more about the conference themes to prepare for your application. Apply to become a speaker by 24 December.
-
What was the FinTech this week in: 📰
HONG KONG
RBI in discussions with US, Hong Kong, Swift on digital bank payments
The Reserve Bank of India is in discussion with its counterparts in the United States and Hong Kong, along with the Society for Worldwide Interbank Financial Telecommunications (SWIFT), on cross-border digital bank payments or central bank digital currencies (CBDC). The RBI, which initiated wholesale and retail CBDC pilots in December 2022, is committed to promoting the “e-rupee” for domestic transactions and expanding its use cases. Additionally, countries, including China, the European Union, the US Federal Reserve, and Brazilian authorities, have been actively exploring and piloting CBDCs. Therefore, collaborative efforts with like-minded counterparts may help determine whether wholesale CBDC can generate non-USD cross-border settlements while reducing transaction costs. The RBI, along with the National Payments Corporation of India (NPCI) aims to streamline CBDC usage, making digital payments as straightforward as traditional cash transactions. To this end, the RBI has established a sandbox allowing startups to experiment with various CBDC use cases, specifically targeting offline and feature phone-based payments.
Read more: RBI in discussions with US, Hong Kong, Swift on digital bank payments (business-standard.com)
Klarna targets $1 trillion travel sector with Cathay Pacific tie-up
Klarna, the AI-powered payments network and shopping assistant, has partnered with premium airline Cathay Pacific to offer fairer, flexible payments to travelers in six countries across Europe. The agreement is the latest in a series of travel tie-ups for Klarna as the company aims to further expand into the travel sector. Globally, credit cards are used for 70% of the $1 trillion spent on flights each year according to McKinsey. Klarna‘s credit products are a healthier, fairer way for consumers to access credit, with clear repayment plans and customer-protection features like freezing access to its services when a payment is missed. Cathay Pacific customers over the age of 18 can now choose Klarna as a payment option at check-out in six European countries. Travelers in the UK, Spain, France, Italy, and the Netherlands can pay for their flight in three, interest-free installments using Klarna‘s Pay in 3 service. In Germany, Klarna financing allows travelers to spread the cost of a flight over 6 - 24 months, interest-bearing.
Read more:Klarna targets $1 trillion travel sector with Cathay Pacific tie-up (finextra.com)
SINGAPORE
Singapore banks make headway on programmable digital money trials
Blockchain technology may not be new, but it heralds the start of a new era in the financial world and has fired up global excitement among central banks and financial institutions, including Singapore’s three local banks. PBM is a form of tokenized digital currency that allows issuers to set specific conditions on how it is used. Currently, OCBC Bank and UOB are looking at how PBM can be programmed to maintain the fungibility of digital money across different digital money issuers, or how digital money can be traded or exchanged for one another. Wholesale central bank digital currencies (CBDCs) will be the common settlement asset in this test. Wholesale CBDCs are digital currencies issued by a central bank. They are to be used only by central banks, commercial banks, or other financial institutions to settle large-value interbank transactions. PBM can play a role in government disbursements as it can be programmed to allow money, goods and services tax rebates or care subsidies to be disbursed to people when needed.
Read Article: Singapore banks make headway on programmable digital money trials | The Straits Times
Jebhealth partners with Airwallex Singapore and Visa in health services
Singapore-based health technology Jebhealth has partnered with Airwallex and Visa to launch corporate health and employee benefits payment cards. Through this alliance, Jebhealth will leverage its digital software products to address inefficiencies and reduce costs in the delivery of health services to the community. Moreover, it aims to overcome challenges associated with accessibility, accuracy, and affordability through innovation and technology. By collaborating with Visa and Airwallex Singapore, Jebhealth launched two Visa Business cards – the Helix Health Card and J World Card, designed to integrate online, outpatient, and abroad healthcare payments. Furthermore, the alliance led to the creation of a novel digital health wallet and payment product and a new class of health-fintech solutions. Visa Business Cards are addressed to employees and underserved worker communities, and it will remove the traditional upfront pay for medical bills, saving time for organizations on reimbursement and manual reconciliation. Employers and HR professionals can remotely manage cards via a web portal in real-time for pre-hires and employees. This can be done by Google Pay and Apple Pay self-onboarding, without the need for physical medical chits or additional identity proofs.
Read Article: thepaypers.com/cards/jebhealth-partners-with-airwallex-singapore-and-visa-in-health-services--1265600
Banks in Singapore introduce money lock anti-scam security option; funds cannot be digitally transferred even between own accounts
From 30 November, 2 million OCBC Singapore customers will be able to lock funds in their existing OCBC bank accounts. The option is available via OCBC Money Lock, designed to safeguard against unauthorized transfers. Locked funds cannot be digitally transferred or used for the following purposes: Local and overseas transfers, even between a customer’s own accounts; New or existing payment arrangements e.g., GIRO, standing instructions or future-dated transfers; Bill or credit card payments; Fixed deposit placements or investments; Insurance purchases or payments; Loan or tax repayments, or ATM withdrawals or transfers. Customers will be able to transact as usual with the remaining balances in their account which have not been locked. If these remaining balances are insufficient, they must unlock their funds before carrying out their transactions.
Read more: OCBC launches OCBC Money Lock feature (retailbankerinternational.com)
Ravi Menon sees private crypto on its way out
Private cryptocurrencies that failed the fundamental tests of financial services will eventually exit the monetary scene. That will leave a future monetary system made up of three key components: central bank digital currencies, tokenized bank liabilities and ―well-regulated‖ stablecoins, Monetary Authority of Singapore‘s Managing Director Ravi Menon said. Private digital coins ―have miserably failed the test of money because they can‘t keep value,‖ Menon said at a panel discussion on the Future of Monetary System as part of the Hong Kong Monetary Authority[1]Bank for International Settlements event. ―The beauty is it‘s in token form and it can be used for variety of innovative applications.‖ Meanwhile, a top Indian central banker said he sees central bank digital currencies enjoying greater success if it meets unmet user needs and is implemented using accessible existing technology and infrastructure. Rajeshwar Rao, a deputy governor at the Reserve Bank of India, said at the same panel. Rao sees the scope for the central bank digital currency to be expanded further to include interbank money market transactions.
Read more:Ravi Menon sees private crypto on its way out (theedgesingapore.com)
CHINA
Standard Chartered to offer support for China’s digital yuan
Standard Chartered Bank has announced its upcoming participation in China‘s digital yuan, also known as digital renminbi (RMB). The bank will provide customers with digital yuan exchange, redemption, and other services. Additionally, the bank indicated it would access the digital currency‘s interconnection platform via City Bank Clearing Services Co., Ltd. Standard Chartered is ―optimistic‖ about the digital yuan and its potential use in international merchant payments, trade financing, and supply chain financing. The bank also highlighted its previous involvement with the digital yuan, which includes a proof-of[1]concept test conducted in September 2022 and a collaborative report with PwC China published in May 2023.Standard Chartered acknowledged the digital yuan‘s status as a central bank digital currency (CBDC), noting that these forms of money can be used in transactions by individuals and businesses alike. It added that China was one of the first countries to carry out a large-scale pilot and said the program covers 26 pilot areas.
Read more: Standard Chartered to offer support for China's digital yuan (cryptoslate.com)
ByteDance establishes new AI division to accelerate consumer product deployment
ByteDance has recently established a new AI division called Flow to accelerate its AI-based product deployment, according to Chinese media reports. Flow has already launched two chat bots called "Dou Bao" and "Cici" and is incubating several other consumer-facing AI products. The new unit will be headed by Zhu Wenjia who is leading ByteDance‘s generative AI team. ByteDance‘s investment in AI has been relatively low-key compared to other Chinese tech giants such as Baidu, which has launched its ChatGPT-equivalent products earlier this year. The establishment of the Flow team indicates that ByteDance is shaping a holistic AI development framework, extending from foundational model layers to application layers. Given ByteDance‘s track record in the mobile internet era of launching numerous viral apps, the industry is keenly observing how the company will leverage generative AI to create the next wave of popular consumer AI products.
Huawei and Xiaomi outshine Apple in China’s Singles‟ Day sales
The smartphone market in China is characterized by intense competition among key players such as Huawei, Xiaomi, and Apple. Apple strives in China and India amid a global smartphone slowdown Armed with innovative features, competitive pricing, and diverse product offerings, Huawei and Xiaomi have been reshaping the dynamics of the Chinese smartphone market in recent months, challenging Apple‘s longstanding dominance. This success poses challenges for Apple, the world‘s most valuable company, which has relied on nearly 20% of its revenue coming from greater China in recent quarters. Xiaomi, Honor, and Huawei Technologies were the main forces behind the growth in the Chinese smartphone market. ―The clear stand-out in October has been Huawei with its turnaround on the back of its Mate 60 series devices, Counterpoint China analyst Archie Zhang said in the report, referencing the Shenzhen-based company‘s latest handsets launched in late August, including the Mate 60 Pro. On the other hand, Xiaomi‘s latest flagship, the Xiaomi 14, released on October 26, experienced a 33% sales surge in China within four weeks. ―Huawei is continuing its strong run along with Xiaomi, which is enjoying a further spike in sales with the launch of its new 14 series devices.
Read more: How did Apple do against resurgent Huawei on Singles' Day? - TechHQ
WeRide to launch paid self-driving taxi service in Beijing
Self-driving company WeRide has been granted approval to commercially operate driverless taxis in the Chinese capital of Beijing. The firm can now charge for its self-driving taxi service in Yizhuang, an area of Beijing that has become renowned as a pilot zone for automated transport. This enabled WeRide to operate autonomous shuttles on a round trip of 10.5 miles between the airport and the China International Exhibition Center earlier this year, ferrying VIPs to the World Intelligent Connected Vehicles Conference. And now the company can commercialize its service in Yizhuang, with customers again using the company app to hail a ride. As before, the taxi will arrive at a specified pick-up point, and the passenger will have to verify their identity by scanning a QR code to gain entry to the vehicle. Up to three passengers can be accommodated at any one time, and again they will be able to specify a designated destination – there are 242 in total. Operating hours initially will be between 9 a.m. and 5 p.m. and although the taxis will not have a human behind the wheel, they will be monitored remotely to ensure safety.
Read more: WeRide to Launch Paid Self-Driving Taxi Service in Beijing (iotworldtoday.com)
XTransfer and Tencent Cloud team to digitize foreign trade enterprises
XTransfer and Tencent Cloud have signed a cooperation agreement in Shanghai to facilitate the digital transformation of the foreign trade industry. In this strategic partnership, both parties will fully cooperatively share their respective advantages, including technology, brand, and resources, to jointly create more competitive product solutions in foreign trade digitalization, contribute to the digital transformation of the foreign trade industry, and support the development of SMEs. XTransfer is collaborating closely with Tencent Cloud to enhance the digital experience of foreign trade companies in areas such as cross[1]border payments and finance, risk control services, marketing and customer acquisition, customer management, and employee management. Tencent Cloud will provide technical support to XTransfer for building large-scale models, assisting in the digital transformation of XTransfer‘s products, and jointly expanding the application of AI technology in various foreign trade scenarios.
Read more: XTransfer and Tencent Cloud team to digitize foreign trade enterprises (ibsintelligence.com)
Huawei is pushing its tech into the EV world with new cars, automaker partnerships
Chinese telecommunications and smartphone giant Huawei are doubling down on selling its tech in the competitive electric car market. The company has emphasized it doesn't manufacture cars. Instead, it sells tech components such as its Harmony OS operating system and driver-assist product or works with automakers to create new EV brands. Huawei is working with at least four traditional automakers in China on new car brands, after news over the weekend of a joint venture with Changan Automobile for car technology. Changan and Huawei are already partners for the Avatr electric car brand, created in 2018 with electric car battery giant Contemporary Amperex Technology. Avatr's SUV and sedan each sell for slightly more than the equivalent of $42,000. Huawei is also working with Chery on the Luxeed electric car brand.
Read more: Huawei is pushing its tech into the EV world with new cars, automaker partnerships – NBC Los Angeles
ASIA
Visa study: 97% of Asia Pacific travelers opt to go cashless when travelling
Top destinations of choice: Japan secured the top spot among destinations that respondents travelled to the most, with 25 percent of respondents having visited the country this year, followed closely by Australia (18%) and Singapore (12%). Australia (16%), Japan (16%), and Mainland China (9%) topped the list for international business leisure, or ‘leisure’, trips, where consumers combine leisure with business activities during their span of travel. Rising trip expenses: Travelers are also spending more in 2023, with an average of $2,525 per trip – a significant jump from $1,708 in 2020. Motivations for travel: In addition, the survey highlighted that the main motivations for travel are relaxation (39%), followed by the desire to explore and learn something new (14%) and visiting family and friends (13%). Other motivators include shopping (8%) and going on an adventure (8%). Sustainability takes centerstage: 63 percent of respondents indicated an interest in sustainable travel, citing choosing sustainable accommodation, utilizing energy efficient modes of transport, and avoiding use of single-use plastics during their trips as ways to travel sustainably. Inspiration for future trips: When planning future trips, travelers draw inspiration from various sources, with advertising (49%) and word of mouth (48%) leading the way. Promotions (41%), social media (39%), and travel content (37%) are also significant triggers when picking a destination and choosing activities.
Read More: Visa study: 97% of Asia Pacific travelers opt to go cashless when travelling (prnewswire.com)
Payment technology predictions for Asia Pacific – what to expect of 2024- SaaS is expected to burgeon
Fintech startups lead this disruption, prioritizing convenience, security, and efficiency for optimized payment speed and accessibility. Projections for the Asia-Pacific Payments Market signal substantial growth, from USD 12.29 trillion in 2023 to USD 22.97 trillion by 2028, driven by the increasing adoption of contactless payments expected to surge over 50% from 2023 to 2025. This trend reflects a significant move away from cash, driven by rapid advancements in payment technology throughout the region. Cross-border instant payments: The Asia-Pacific (APAC) payments sector is witnessing a significant transformation, driven by the rising trend of instant payments. Rapid developments in cross-border transactions, led by Indonesia, Singapore, Thailand, China, India, Australia, and Japan, are seamlessly integrating diverse payment systems into a unified network. This initiative not only enhances convenience but also facilitates peer-to-peer (P2P), account-to-account (A2A), and e-wallet instant transactions, amplifying the efficiency and accessibility of financial transactions for both ecommerce and consumers. BNPL: Reiterating the earlier point, Buy Now, Pay Later (BNPL) has asserted its dominance in the Asia Pacific region, with a projected value set to soar to USD782.9 billion by 2028. SaaS will prime: Anticipate a significant metamorphosis in the fintech sector come 2024, propelled primarily by the burgeoning Software-as-a-Service (SaaS) industry. The prevalence of cloud-based applications within the SaaS framework provides unparalleled convenience, negating the need for in-house deployment and its associated costs. Digital wallets: Mobile commerce’s rise signals a shift to digital wallets as the primary choice for online payments, which are projected to account for 65.4% of APAC ecommerce payment methods up from just over 60% in 2020. QR-codes: QR code payments, facilitating touch-free transactions, have gained broad consumer acceptance, mitigating contact with shared surfaces. Beyond consumer convenience, QR codes are crucial for businesses targeting tech-savvy audiences, particularly in high smartphone penetration countries.
Read more: Payment technology predictions for Asia Pacific – what to expect of 2024 - ThePaypers
Mizuho and Climate Impact X join forces to scale international carbon credit market in Asia
Mizuho Financial Group and Singapore-based global carbon marketplace and exchange Climate Impact X (CIX) are partnering to jointly cater to growing demand for international carbon credits among companies in Japan. The strategic partnership via investment aims to facilitate cross-border trading and connectivity between markets, which both companies believe are crucial to resolve imbalances in the demand and supply of carbon credits and help to scale the market effectively. Carbon credits are one of the primary tools available right now that can mobilize additional private financing - at the speed and scale necessary - to help mitigate climate change and build resilience to its impacts. Companies can compensate for their emissions, or contribute to global mitigation efforts, by buying and retiring carbon credits generated from projects that reduce or avoid carbon emissions. Funding from Mizuho will be used to build out CIX‘s existing platforms, deepen the company‘s offerings for the Japanese market and ultimately expand its regional footprint. This will allow both companies to better serve customers in Japan and beyond, especially those in carbon-intensive sectors.
Southeast Asia is on the cusp of a ‘supercharged' digital payments revolution
Southeast Asia is "supercharged" to power a shift toward digital payments and other innovations in digital services, thanks to an acceleration in digital transformation during the pandemic. Widespread mobile ownership, together with rapid digitalization after the pandemic, helped spur the expansion of digital financial services in Southeast Asia. The region is made up of Singapore, Malaysia, Thailand, Indonesia, the Philippines, Vietnam, Brunei, Laos, and Cambodia. Some examples include Thailand's PromptPay, which enables bank account users to receive and send payments via national IDs, mobile numbers or email addresses. In the Philippines, the government distributed Covid[1]19 financial aid via digital platforms, while Singapore encourages and incentivizes hawkers to adopt contactless QR code payment services. Southeast Asia is poised for a strong growth potential with its digital economy set to reach $1 trillion by 2030 — backed by strong fundamentals including over 460 million digital consumers, young and tech-savvy populations, as well as rising internet penetration.
WeChat launches ticket purchase service for Tokyo stations
WeChat, China’s largest super app, will be launching a ticket purchase service using WeChat Mini Programs in Japan for the first time. This new service will allow users to not only purchase tickets for all stations in Tokyo and the Keisei Skyliner Express, but also make payments through WeChat Pay. By utilizing the ―Travel Japan‖ Mini Program within the WeChat app, Chinese travelers visiting Japan can now conveniently purchase tickets in advance for all stations in Tokyo and the Keisei Skyliner Express. After purchase, users can easily obtain their tickets scanning the exchange QR code at the ticket vending machines located at each station. This service is expected to reduce the need for currency exchange and long queues, effectively overcoming language barriers.
Read more: WeChat Launches Ticket Purchase Service for Tokyo Stations (ticker.tv)
Bank of Korea to launch retail CBDC pilot program
The Bank of Korea plans to launch a pilot program for its retail central bank digital currency (CBDC) in the fourth quarter of 2024. The program will involve 100,000 selected South Korean citizens who will be able to use tokens in the form of CBDC issued by commercial banks for purchasing goods. This initiative aims to address the challenges faced by existing voucher systems in South Korea. It comes as part of the bank‘s efforts to explore new forms of financial products and enhance the efficiency of daily transactions for individuals and businesses. With the upcoming pilot program for the retail CBDC, the central bank aims to address the challenges associated with existing voucher systems, including high transaction fees, complicated and slow processes, limited post-transaction verifications, and concerns over fraudulent claims. The Bank of Korea is currently in discussions to select a city from three potential candidates in South Korea, namely Jeju, Busan, and Incheon, as a test bed for piloting the CBDC. Along with this retail CBDC, the Bank of Korea is conducting a pilot in partnership with the Bank for International Settlements (BIS) and other banks to test the feasibility of a wholesale CBDC used in the settlement of commercial bank tokenized deposits and the programmability of those deposits.
Read more: Bank of Korea to Launch Retail CBDC Pilot Program (pymnts.com)
Digital Payments Increases But Cash Remains First Choice
Cash is still preferred as a savings instrument for its 'store of value' feature and also for precautionary purposes. Therefore, the demand for cash would rise as the economy grows, the paper mentioned. Sustained growth in currency demand is dependent on precautionary and store-of-value motives, while the use of cash as a payment medium continues to fall. The lower rate of return on alternative investments (or even a negative real return) before 2022-23 might have transformed into increased demand for non-interest-bearing assets like currency. It is worth mentioning that while the share of currency in M3 (Broad Money) has witnessed a steady fall since the year 1951-52, it has shown faster growth than total deposits during periods of major policy shifts and crises. Also, in line with the global scenario, the pandemic led to a transitory uptick in currency demand in India, primarily driven by precautionary and store-of-value motives, the paper mentioned. The precautionary behavior in cash usage is also proven by the excess financial savings of households, which rose to 15.5 per cent of the Gross National Disposable Income (GNDI) in 2020-21 from 11.7 per cent in the previous year. The analysis also highlights that for transaction purposes, digital modes are increasingly substituting cash.
Read more: Digital Payments Increases But Cash Remains First Choice Research - BW Disrupt (businessworld.in)
UnionPay International fuels QR code payment network in Southeast Asia
UnionPay International signed a memorandum of cooperation with Laos National Payment Network (LAPNet) and Payments Network Malaysia (PayNet), to promote the use of UnionPay in the SEA payments network. UnionPay International has added Lao‘s LAPNet and Malaysia‘s PayNet to their rapidly expanding QR code payment network, enabling the acceptance of UnionPay mobile payment products by local QR code merchants, as well as the use of mobile banking apps and e-wallets supported by PayNet and LAPNet in UnionPay QR code network standards. UnionPay International and LAPNet joined forces, leveraging their expertise in bank card payments, to enhance cross-border mobile payment experiences for residents of both countries. This innovative cooperation model expands UnionPay‘s QR code network and strengthens cross-border service capabilities. It has also formed agreements with networks in South Korea, Sri Lanka, Vietnam, Cambodia, Malaysia, and other regions since its launch last year. The network interconnection agreement signed with UnionPay International in Shanghai in August has officially come into effect. Starting this October, Mainland China, Hong Kong, and Macau versions of the UnionPay App, as well as bank apps connected to the UnionPay App Network Payment Platform, can scan QR codes to pay at over a million merchants under the PayNet‘s umbrella
Read more: UnionPay International fuels QR code payment network in Southeast Asia (ibsintelligence.com)
-
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