Singapore has been the epicenter of the financial services, payments, and fintech world over the past three days, with thousands of influencers, innovators, entrepreneurs, and visionaries coming together for Money20/20. Presentations, Q&A sessions, networking breaks, meet-ups, and the sector’s most stylish party, Industry Night, overlooking the stunning Singapore skyline, have allowed ideas and friendships to flourish.
Audience participation was up this year, with 1,000 questions from the floor in just the first two days of the show, double the total for 2018. Here are our top three queries:
- Do you believe traditional banks will be able to develop digital banks inside themselves?
- What will it take for QR-based checkout payment to become mainstream?
- What are the biggest challenges for AI?
The value of vision
VC legend and GGV Capital managing partner Jenny Lee has some advice for company founders. Your vision is the core that drives your company. The right vision will guide you for decades, so it’s vital that you can crystalize your vision into a very specific mission statement that can be dissected into actionable tasks for your senior and mid-level management and staff on the ground. If your vision has clarity, then it is easier to hire the right people and execute on a day-the-day basis.
The invention of gunpowder
Nguyen Nguyen, founder and CEO, Trusting Social, is extremely optimistic that lending will never be the same again. “The traditional way of underwriting, looking at demographic data and repayment history data, is a very biased view of humans.” We now have the data to prove that the social graph (which maps personal relationships via social media) is critical, especially in emerging markets, since it shows that family and friends provide a safety net for borrowers. For example, there are about six degrees of separation among everyone in Vietnam, so providing services to one person adds value to everyone. Adding this understanding into underwriting methodology is like the invention of gunpowder – we can’t ignore it and it’s going to be an integral part of credit scoring for decades to come.
The importance of trust
Tokopedia president Patrick Cao says it all starts with trust. Once a business is a digital payments customer, Tokopedia can provide micro- and macro-insurance, access to money markets and mutual funds, and more. In some emerging markets, like Indonesia, the sweep into gold is very close to established local behaviour. “There is a lot of extensions once you build the trust—and our business is all about trust.”
The future of nano-financing
In the developed markets, development has been modularized: companies are good at different things. But we can learn from China. In ecommerce, Alibaba had to build all the infrastructure. That’s what Oriente is doing today – building the entire integrated end-to-end solution – says co-founder Geoffrey Prentice, legendary founder of Atomico and Skype who is now turning his attention to Southeast Asia.
The rise of the super-apps
Many attendees are keenly eyeing the efforts of big tech players to offer financial services to Southeast Asia’s underserved consumers and SMEs, particularly women, with “platform ecology”, Asia’s super-app model connecting finance and retail to deliver seamless customer experiences. Southeast Asian banks, too, are looking to replicate China’s experience with banking super-apps that drive customer acquisition and engagement.
- Angela Carcheska, Overseas CEO at Hundsun Technologies, said that replacing legacy banking infrastructure with a super-app means that the entire organization can share the underlying infrastructure and data, but each department has its own specific solutions to meet user requirements and enhance efficiency.
- Eugene Huang, CTO at OneConnect Singapore, the company that insurance giant Ping An launched late last year, is also on a mission to use its tech to help banks acquire customers, manage risk, and automate customer service. Its super-app combines technologies like blockchain and AI with an ecosystem to deliver products across three product lines: banking, insurance, and investment.
The golden rule
Henry Ma, VP and CIO at WeBank, shares his golden rule of fintech: “Any technology we apply has to be able to either optimize our operating efficiency, improve the user experience for customers, allow us to scale up, or help us reduce cost and mitigate risk.” How does relate to the A, B, C, D pillars of fintech at WeBank?
- AI: onboarding tens of millions of customers using facial recognition for remote KYC; chatbots to handle over 98% of 1 million daily customer enquiries; chatbots for collection
- Blockchain: syndicating out loans with shared ledger on blockchain; building an arbitration chain to resolve disputes in 7 days rather than 45 days
- Cloud computing: allowing a substantially different cost structure
- Data: leveraging big data for underwriting, risk management and precision marketing
The power of education
Y Combinator-backed student financing platform Dana Cita took this year’s Money20/20 StartUp Pitch crown, winning over the judging panel and Matrix Stage audience with its approach to making education affordable as a way to advance impact and financial inclusion. The cost of tertiary education compared to average income is so high in Southeast Asia that few people can afford to attend university. Dana Cita provides affordable education financing in partnership with universities (for referrals and risk management). It has so far funded 500 students in Indonesia, with a default rate of below 5%, and will launch in the Philippines soon.
And finally, what do fintech’s movers and shakers really think about industry buzzwords…
- Artificial intelligence: “It’s important, but there’s a lot of ‘BS Bingo’ going on when you hear it.” Geoffrey Prentice, co-founder of Oriente, Atomico and Skype.
- Artificial intelligence: “I don’t hate AI, but I hate the bastardization of AI.” Prajit Nanu, CEO and co-founder, InstaReM, objects to calling what we have today “AI” – pathetic chatbots or anti-fraud mechanisms that don’t really work. AI is supposed to be massive; we’re misusing the term to raise capital.
- Customer experience: “If you can create…living services, it’s priceless.” Deniz Güven, CEO Virtual Bank, Standard Chartered cautions that customer experience is not about UX and UI…pushing with branding, marketing, pricing. It’s about services that are relevant, engaging, and useful—that wrap around us, like our bank alerting us to check the taxi fare just charged to our account because it was too high for the traffic conditions and route.
- Hackathons: “I am not against hackathons per se, but hackathons for ‘open innovation’ by large corporates—I hate it, I hate it, I hate it!” Suniti Nanda, fintech officer, Government of Maharashtra – India, abhors that hackathons get thousands of excited students and start-ups to participate and create solutions. But then, once the winners are announced, nothing happens! The corporations do not implement the solutions.
- Big data: “Big data is meaningless.” Dan Ring, VP Global Communications, ACI Worldwide, tells us to look to the US to see that the combination of big data and social media is not healthy. As an industry, we have to ensure data is used with permission and consent. We should toss out “big data” and focus instead on something like “payments intelligence”.
- Hockey sticks: “Who on earth can predict the future?” Liz Oakes, Mastercard EVP of Market Development of New Payment Platforms, sees a lot of business cases where owners seek to show how they are going to succeed. They all have the same sort of “hockey stick” curve (with a sudden sharp increase after a short time) for revenue projection, but there is a huge gap between that and the adoption curve. Hockey sticks serve no purpose because you can’t rely on the data to be accurate at all.
And while none of us can predict the future, we can be sure that Money20/20 will be the place to be when it returns to Singapore from 24 -26 March next year. We hope to see you there.