What’s It Really Like Working For/With FinTech Start-ups?

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I get asked this question a lot by the corporate community with whom I am typically engaged with, usually this would comprise of senior figures from the BFSI community. The people I am usually in conversation with have never worked for a start-up, let alone have had any professional dealings with any. For those that know me well, I am not short of an opinion or two on this subject or anything else for that matter.

My Start-up Journey

Before leaving the UK in 2015 to embark on my own professional journey to Asia where I am firmly based, I had no idea of what is was truly like working for/with the start-up community. The UK, in particular London, is a hotbed for FinTech talent and is laden with a number of great start-ups. I had the privilege of knowing a few of these guys but wasn’t really involved in what they were doing to the extent I am now and have been these past 2+ years.

Making the move to APAC was probably the best thing that could have happened to me, and I am in no regret for swapping a very comfortable life in the UK for the opportunities that Singapore, APAC and now India and South Asia present to me. The FinTech ecosystems in this part of the world have developed very quickly in the last couple of years, Singapore more so than any other region and India isn’t too far behind in some respects.

The Start-up World

Having worked for a young start-up in Singapore, I am fully aware of the challenges that these guys have to go through and it really is a different world to the corporate environment I have grown up with. Firstly, I didn’t have the resources (people) available to me and had a very limited budget to do what I needed and had to adjust very quickly to a different way of working. Secondly, I had more autonomy and decision making freedom compared to my previous life which was refreshing in order to get things moving along quickly. The above points seem obvious in black and white, but once you’re in this environment you only begin to realise it.

There are obvious pros and cons but I am certainly glad that I had the opportunity to live and breathe the start-up world for myself, otherwise my opinions would be pretty meaningless and not really based on anything tangible.

Advisory and Mentorship

My experiences working within the start-up world has really had an impact on my professional career to-date. I am now working in an advisory/mentorship capacity for start-ups across India and APAC via three FinTech accelerator programmes. If I am able to support start-ups through these programmes, I am more than happy to do so. It’s a combination of giving something back to the community, but in my case an opportunity to learn. I am continually amazed by the intelligence, determination and desire to make a difference by young people at the ages of 19-25. The FinTech world is a chaotic seen globally right now, there is a lot of noise and continual media frenzies. However, away from the noise, on the ground, I am seeing young teams of start-ups doing some amazing things from a product/solution level.

In summary, I would recommend anyone to at least try and work for a start-up once in their careers, it’s a roller coaster ride of emotions, energy, happiness and adversity to name but a few.

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Innovation Labs, Hackathons & Accelerators – Fad or Fab?

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There has been a tremendous amount of debate as to whether innovation labs, hackathons or accelerators are indeed a success or just another way to garner public attention. The FinTech world has been awash with a lot of hype over the last 3-4 years but those working at a product/solution level see things very differently.

As someone who is heavily involved working within these domains, I thought it was my duty to at least past some objective comments. I recently moderated a panel discussion at Bank Tech Asia in Kuala Lumpur November of this year, it was probably the most riveting panel discussion over the two days. The future of what the banking world will do is largely underpinned by the success of these types of events. That’s tremendously important if we think about FinTech and it’s meaning, and the foundation for success.

Let’s first focus on all three types individually.

Innovation Labs

Innovation labs are really nothing new but in the context of FinTech over the last few years, the banking world has embraced the opportunity to try and do more when it comes to co-creation, ideation and building small PoC’s (proof-of-concept) and small point solutions with the start-up community. Indeed, I’ve spent time at a few innovation labs and both the banks and start-ups are taking this very seriously, it’s not just a show or publicity stunt to prove to the rest of the world that they’re doing something. Banks like many large financial institutions are in desperate need of trying to stay relevant in the digital world we’re now in. Working with a handful of clever start-ups is just one way to try and tackle problem statements they’re trying to address, creating the relevant use cases and then building solutions for the future.

Hackathons

I’ve been involved in several hackathon events with more being planned and I absolutely love them. It’s been a couple of decades since I’ve coded in anger and even then I wasn’t very good at it. Hackathons are a great way for large financial institutions to work with start-ups and then select the best ones based on the problem statements/use cases the bank for example is trying to address. If you’re a techie you’ll love the vibe and commitment of the teams as they have a very limited time frame to build something they’re able to demonstrate to the judges.

Having been a judge at a recent hackathon run by DCB Bank in Mumbai, I was mightily impressed with the young start-ups. They demonstrated their technical abilities but built solutions that would be a great benefit to the banks but also consumers and business clients alike. The teams thought very hard as to how to make the lives of the consumer and business clients better utilising the new and emerging tech we’re reading about today.

Accelerators

I’ve been mentoring for a number of different accelerators now for the last year or so now and I throughly enjoy it. Being part of the FinTech ecosystem is throughly rewarding, not only from a giving perspective, sharing knowledge and experience but I am continually learning from start-ups too. Accelerators are very important to drive awareness of known problem statements and to attract the very best start-ups who can look to kick-on if they’re successful through investment and reach. Typically there are two formats which exist, firstly independently run programmes backed by large MNC’s who help support the programme or banking led accelerators where these programmes are run exclusively by the banks themselves. Both programmes ultimately have have the same objective and goals.

Final Thoughts – Fad or Fab?

I believe all domains provide some form of value in their own way which contributes to this ecosystem. The single biggest objective across the start-up and banking world is centered on the consumer or business client with whom you’re trying to serve. How do we make their lives easier? How we keep them engaged? Most of the time there aren’t the huge successes we’d all like to see, but that’s ok as this is a test and learn exercise anyway. In my experience though as part of the process we’re never exactly sure what we’ll unearth at such events and for me that’s always the fun and exciting part.

Is The FinTech Bubble About to Burst?

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It’s been well documented that the financial services industry needed some form of disruption and a move away from the traditional models. The industry as we know it has become too out-dated in the modern, digital world that we now live in. True product innovation, improved customer UX/UI were always going to be a problem for large financial institutions to manage and rectify. FinTech was seen as the holy grail to address the bulk of these issues, and for the most part there has been some progress.

I’ve been fortunate to work closely within the FinTech ecosystem in Singapore/APAC and now presently here in India. The hype to a certain degree is still there but I feel after the last 12-18 months, this has reduced from before. It’s also worth noting that venture capitalists and investors have equally been reserved from a funding perspective. We’re definitely seeing signs of a slowdown, which is why it’s vitally important that those start-ups continue to focus on building solutions which address tangible problem statements. I don’t necessarily subscribe to the viewpoint that start-ups are purely in this market to create momentum and publicity, with a view of being bought out by a bigger player.

Working closely with the banking community in APAC, they themselves are very keen to try and address a lot of the reasons FinTech start-ups exists and what they’re trying to do. It takes a brave financial institution to admit they have problems in certain areas, are willing to accept change and to be more collaborative in order to rectify them.

We’re now deep into collaborative FinTech amongst the community of start-ups, banks and insurance companies. This collaboration (via innovation sandboxes/use of development API’s) is a positive move and I’ve certainly witnessed this first hand, with some meaningful proof-of-concept solutions co-created within innovation labs/accelerator programmes. The focus being on the consumer, providing them with an engaging product/service, a great experience and fit for the digital age we’re now in.

In terms of the future for FinTech – I don’t see the bubble bursting, but I do see it getting smaller, we will see some form of rationalisation and a different landscape. This may well be driven by a number of factors, regulation will no doubt play it’s part, specifically on a region-by-region basis from my understanding. The net result will see the established financial institutions and only a handful of start-ups which have survived, co-offering the next wave of solutions to business and consumers.

We may also need to consider the other major technology companies, such as Google, Amazon, Apple and Facebook making a play into the banking world. We know that these organisation are adept at capturing, managing and monetising business and consumer data. This is a real threat to the traditional banks and as such, this is where their focus should be targeted, esp. at the millennial and upcoming generation Z customer segments.

There is a great quote taken from Walter Wriston, a former CEO of Citibank (1967-1984)

“Information about money is more valuable than money”

This quote is still true today and will continue to be so.

Blockchain: It’s a solution; now what’s the problem?

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I felt compelled to write something about the so-called Blockchain hype that we’re seeing today and to provide an alternative viewpoint.

It’s a buzzword dominating the BFSI world and beyond and is seen as some form of saviour to a lot of different problems that exist today. The pros & cons have been well documented, either in white papers, articles, blogs or discussed at many global conferences. The intention of this post wasn’t to document these specifically or to describe what Blockchain is and how it works.

I am not a hardcore technology person by any means, but I understand the benefits of using Blockchain technologies and the varying use cases they could be applied to. I attended Indian Blockchain Week recently in Mumbai, a fascinating event in which I was surrounded by passionate entrepreneurs, industry experts and businesses showcasing the good work they’re doing with the technology.

We all know the benefits of what Blockchain technology can offer and the known barriers to a successful global adoption across the many industry verticals. Time will tell as to whether we move ahead from proof-of-concept (PoC) stage, small point solutions developed regionally to a fully global commercial roll-out.

What comes first, the problem or the solution?

I am a big believer in applying technology to solve problems that exist today, as a product guy that is engrained in my DNA. However, we can occasionally get carried away and overthink where we don’t necessarily need to. The general feeling I’ve developed over the last 18 months or so, given my involvement is that the majority believe that many different types of Blockchain can solve all of their problems. This is a common trap to fall into.

Problem statements are important

It’s really important to fully understand the known problems affecting consumers and businesses today. As someone who builds product strategies and solutions, I am forever questioning and asking myself – is this a genuine problem for a consumer/business today?

Common trap

It’s very easy to apply a form of emerging technology to deal with problems that exist in industry but the process needs to be flipped around. The simple steps I tend to follow are:

  • Fully understand the problem you’re trying to address using whatever methodologies required.
  • Build your use cases once you’re fully satisfied you have a problem statement worth pursuing.
  • Apply the correct technology to address that problem – it may not require a Blockchain remember that.

It’s a common theme I have seen across the industry, it’s also very easy to use technology to try and fix problems that aren’t really a problem or don’t necessarily exist in the real world. All that is needed is a change in thinking, approach and constantly questioning yourself.

Digitised Banking is Now… Digital Banking is the Future

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The intention of this short article is not to talk about digital banking being the future, we all know it is and will be. I do feel there needs to be a clear distinction between what we’re seeing now, what we’ll see in the future and terminology.

There has been a lot written about digital transformation and quite rightly so, if one industry is in desperate need of it, that is banking and the move away from the traditional models which have existed for years.

Digitised Banking

Many are led to believe that what we’re seeing today is a move into digital banking, the fact of the matter is that is not the case. All that we’re seeing are services which have existed for a long time being adapted to the digital era we’re now in. These are then distributed over platforms which have existed for years, namely the Internet and smartphones. The key challenge for banks and their supporting vendors is not modernising the digital experience (although very important) but thinking about what digital capabilities they could offer to their consumers in the future.

Digital Capabilities

  • Digital Customer Experience – Including for On-boarding
  • Personalisation and Individualized Experience
  • Cross-sell/Up-sell
  • Leverage data/Big data
  • Emerging Technologies – AI/IoT/Blockchain

Digital Banking – The Real Focus

Digital banking is about creating new opportunities and these are underpinned by what is delivered against the list I have noted above. The key in all of this as it has been for years is the data, and how it is going to be contextually used to generate the true value. Digital banking should also be focused on customer engagement and deriving new insights on existing customers whilst trying to obtain new ones.

I certainly look forward to playing a part in contributing to the future of digital banking capabilities.

FinTech vs. TechFin

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As someone who has worked within the FinTech scene for the past 3 years now, I’ve seen a lot of ups and downs. The industry continues to grow, even amid the challenging regulatory environments.

I attended a conference in Malaysia in July 2017, I heard one of the presenters talk about TechFin. The term was coined by Jack Ma a year or so back and I started to think more and more about its meaning.

Interestingly, I don’t believe there has been any formal market evaluation on the TechFin industry model.

The Industry Differences

I don’t believe there is a massive difference between FinTech and TechFin, to many people whom I have spoken to the differences are very small. Albeit, the approaches which both take are very different.

I believe both reflect the ever increasing overlap between finance and the use new/emerging technologies. Success for both is usually underpinned by ensuring large financial institutions:

  • Collect enough tangible data on their customers/clients as a first step.
  • Analyse and learn from the data collected and translate these into improving customer engagement as a second step.

Janos Barberis, a well renowned FinTech / RegTech influencer and founder Supercharger FinTech Accelerator based in Hong Kong noted that:

Today, we are entering an area of data analytics and artificial intelligence. These in turn transform data from being simply a byproduct of human interaction into a core commodity for economic growth. Data has been designated “the new oil” because it pushes companies to find, extract, refine and monetise it.

We are indeed at the beginning of a new cycle simply because less than 1% of the world’s data is analysed, and over 80% is unprotected.

[Reference from Asian Banker]

The timeline of the future of FinTech:

FinTech 1.0: Was about Infrastructure

FinTech 2.0: Was about banks

FinTech 3.0: What about Start-ups

FinTech 4.0: Will be about TechFin

[Reference from Asian Banker]

Separating FinTech & TechFin

I would say both have some commonalities but there are some considerable differences in the approaches.

FinTech exists with an objective to maximise the use of emerging technologies to disrupt existing ‘old world’ financial services models. A good example of this would be the use of Blockchain.

TechFin exists with an objective to improve the existing experience or capabilities in the financial services industry. Not so disruptive compared to FinTech but more incremental in nature.

True Innovation & Measuring Success

As someone who has spent the last 12 years focused on strategy, building products, delivering true innovation is very tough. Improving the design and experience is slightly easier, if you have the right people in place and I have seen examples of this in particular.

True innovation can only be measured when products or services become mainstream. Blockchain and its technology isn’t mainstream – yet. However, when it is and everyone has come to accept it publicly, it would be classed as being truly innovative.

The approach to TechFin and its success will be slower by nature but more significant as user experience, design are things consumers crave the most when it comes to their products and services.

Having worked for and with banks, I know that they’re all very keen to adopt new technologies and the vast majority recognise that they need to change their approach. Innovation labs are popping up all over the place within the banking community across the globe. However, their success will be measured on how quickly they build and incorporate new products and services and whether the ‘corporate’ side of the business integrates them quickly.

The generation Y and upcoming generation Z community are the toughest to please, the latter group especially given their lofty expectations. Getting the basics right first would be the priority, user experience, design and basic functionality are a must in today’s world.

Interesting and exciting times ahead!

References

Asian Banker – From FinTech to TechFin: data is the new oil

 

Mobile Wallets – Is The Future Rosy?

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Mobile wallets have been talked about for years, I’ve lost count at the number of reports I’ve read citing that mobile wallets will dominate the world and that your traditional wallet will be replaced by an app on your smartphone.

The UK and Europe

My first foray into the mobile wallet world was way back in 2012, working for the European based Telefonica and its commercial UK arm – O2. There were many solutions in the market long before we at Telefonica developed ours. The obvious one which springs to mind is PayPal that we’ve all come to know and love. It’s probably fair to say that they never really took off in the UK or Europe for that matter. Most of the telcos have tried and failed to capitalise on the hype. Barclays are probably the only major bank in the UK to have stood the test of time with their Pingit solution but that’s really about it.

Singapore & APAC

Roll on a few years and I am now based in Singapore, a vibrant, well developed financial hub and I am fully entrenched into the FinTech world in this region. Singapore, as it is widely documented, has a great combination of infrastructure, high smartphone penetration and a consumer base driven by technology. It is you would say, the perfect place for mobile wallets to thrive and be successful, however, the truth is that it’s not really the case. There are local providers of mobile wallets in Singapore, coupled with offerings from the telcos and the major banks but yet adoption and usage remains modest at best.

The advent of Apple Pay, Samsung Pay and Android Pay may help change that shift and influence the awareness of digital wallets and more importantly, one of the key drivers that underpins it – mobile payments.

If I look at the other regions in APAC, the landscape is very different to Singapore which remains in its own little bubble. The neighbouring regions are aspiring to grow from being purely cash-driven societies and develop much like Singapore has, and whilst that will take time I feel strongly that this is where mobile wallets can flourish as a enabler.

Mobile Wallet Users

There are essentially two camps to which you could classify a mobile wallet user:

  • Banked
  • Unbanked

Most of the developed payments markets tend to focus on pushing mobile wallets to banked consumers and are easy to on-board. The best placed providers here are the banks themselves as they already have a large consumer base they can tap into and leverage, whilst offering additional services to drive adoption and usage. For telcos and third party providers, this will probably be a hard sell. There are the odd exceptions of course, namely Paytm in India which is currently riding the crest of a wave following the demonitization exercise in India in November 2016.

The unbanked are slightly more trickier to deal with as there are more obstacles to overcome, esp. for consumers with no formal bank accounts or credit history. Onboarding and KYC are far more important and relevant and the digital wallet offering will more than likely be some form of SVA or Stored Value Account. This would allow the consumer to top up their digital wallet and would provide them with a formal account and full money management capabilities.

Major Concerns

A major headache from a consumer perspective is the apparent lack of interoperability amongst wallet users. If you side with digital wallet provider A and your family member or friend sides with provider B then it becomes more a challenge due to the siloed nature of how mobile wallets are built. Additionally, as a consumer I am now beset with so many mobile wallets these days, if I were a layman, I know I’d be terribly confused as to whom to side with. Don’t get me wrong, choice as a consumer is a good thing but too much choice across different verticals is not good and this is where fragmentation is inevitable.

Summary & My Final Thoughts

Amidst of all this, I still remain hopeful that mobile wallets will continue to grow but there are some considerations that the providers must be aware of but the battle of who will come out on top remains intriguing. As a fan of mobile wallets, I shall be keeping a close eye on developments as they happen globally.