What The FinTech #177 - 9 Sep 2024
Medhy Souidi
Transformation Lead - Head of Innovation & Experiences at DBS HK | Host of What the FinTech | Senior Editor at Money20/20
?? Welcome back to What The Fintech! ??
Jump right into our latest fintech news with this quick-read edition – just the headlines and direct links for a swift update. And if you're up for a deeper dive, our full newsletter on Substack is packed with thorough analyses, exclusive interviews, and so much more!
In today’s edition, not only will you find the latest fintech news, but also our latest podcast episode where we explore the most pressing fintech topics. Join us for an exciting journey into the heart of fintech!
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??? What The FinTech Podcast – Tune into the Latest Episodes! ??
Catch up on the most exciting fintech insights with What The FinTech, where we dive deep into industry-shaping topics and conversations with top leaders! Here are the latest 4 must-listen episodes:
1?? Web3 in 2024: Navigating the New Frontier of DeFi and Beyond - Featuring Yat Siu, Co-Founder & Executive Chairman of Animoca Brands. ?? Explore the future of Web3 and DeFi across Asia and the West.
2?? The Global State of Payments - With Stefanie Lin Siew Koh from TerraPay, discussing cross-border payments and fintech challenges. ????
3?? Cyber Risk Management and Fintech Security - Featuring Germaine Tan, VP at Darktrace, diving into strategies for navigating cybersecurity in fintech. ????
4?? The Future of AI in Finance - An exciting discussion on how AI and machine learning are transforming the financial landscape, featuring key industry leaders. ????
Don’t miss out on these insightful conversations! ?? Click below to listen now and subscribe:
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???? ?? Hong Kong Finance Frontier
ZA Bank, Hong Kong’s largest virtual lender, has become the first among the eight online-only banks to make a monthly net profit since launching in 2020, aided by growing deposits and fee income from its newly launched mutual fund and US stock trading business. Calvin Ng Chung-ho, alternate CEO of ZA Bank said the profit, which came in July, was driven mainly by higher interest income. It was also helped by an increase in deposits, which rose 70 per cent from a year earlier to HK$16.8 billion (US$2.15 billion) at the end of June. Loans grew in the single digits, Ng added. Ng said the bank also earned more fee income from the sale of its mutual fund and insurance products to retail investors in the first half, as well as from the launch of US stock trading services. ZA Bank has 800,000 customers, the most among the eight virtual banks. Looking ahead, Ng said the bank plans to launch campaigns to compete for clients to shift their payroll accounts to the lender when the Faster Payment System (FPS) supports more payroll services. FPS allows registered users to transfer money between different banks with the use of a simple identifier, such as a phone number.
A Hong Kong-based startup, AEX Markets, is looking to launch a futures exchange in the city that would cater to mainland-China based generators of renewable-energy certificates in a markets-based environment. “Carbon caps need a carbon market to trade, and that requires governance,” said Jeff Huang, founder of AEX Holdings, the company behind the prospective marketplace. He says Hong Kong’s Securities and Futures Commission can provide the kind of international regulation and standards that don’t exist in mainland China’s capital markets, while also offering Chinese power generators a home base and Beijing a trusted business arena. AEX is a long way from a full launch, but it is now incubating a project within Cyberport, a government-backed technology startup institution in Hong Kong, that is meant to serve as a proof of concept. Huang hopes to attract multinational issuers and traders from global financial institutions – and convert some of them into AEX shareholders. The idea of cap-and-trade in carbon is to enable market forces to put a price on emissions. A government caps the total amount of fossil fuels its private sector is allowed to produce, and then establishes a market to trade those allotments. Polluters can pay to augment their output while low-carbon-footprint companies can get paid for their unused quotas. Cap-and-trade is more effective than a simple, one-size-fits-all carbon tax, it provides a market-based price for carbon, and it helps companies prepare for decarbonization, as governments set schedules to gradually reduce their caps.
???? ?? Singapore Financial Innovations
Revolut's head of business says the fintech is 'agressively doubling down" on the B2B market as annual revenues at the unit surpass $500 million. Revolut has so far signed up 250,000 businesses to its offering since launch in 2017, with 20,000 new businesses onboarding each month. Live in 40 markets, Revolut is preparing to roll out the business line in Singapore as global monthly processed transaction volume reaches ￡17B. James Gibson, head of Revolut Business, says: “Shaped by our experience serving millions of retail customers, Revolut Business is growing rapidly. In the last year, we’ve made huge strides forward in our mission to be the number one finance automation system for businesses. With the support of a significant and growing number of customers behind us, we’re aggressively doubling down on B2B and are ready to revolutionise business accounts for even more businesses around the world." Gibson was speaking on the release of a new product, BillPay, integrated with major accounting platforms QuickBooks, Xero, and FreeAgent and designed to save time managing and paying bills to suppliers in over 150 destinations with just a few clicks.
DBS has successfully piloted programmable grant disbursements to streamline government disbursements to businesses. The pilot demonstrates how government agencies can explore the use of this solution to execute disbursements more efficiently with greater governance controls and an enhanced user experience. The solution could also provide businesses faster access to government cash payouts. In collaboration with Enterprise Singapore (EnterpriseSG), a pilot was run for grants disbursed under the agency’s Local Enterprise and Association Development (LEAD) Trade Fairs and Business Missions programme, through the Singapore Fintech Association (SFA). Using DBS’ permissioned blockchain, government agencies like EnterpriseSG and its designated intermediaries like SFA can determine and programme conditions, through DBS, governing grant disbursements. These include disbursements to approved recipients only, and upon the fulfilment of certain business conditions. Once smart contracts verify that the conditions are met, the grants are automatically disbursed as cash to beneficiaries.
?????? China's Tech Landscape
Ant Group has unveiled its AI financial manager, Maxiaocai, at the 2024 NCLUSION·Conference on the Bund in Shanghai. The AI personal financial manager can be accessed via the Alipay app and the Ant Fortune app. Maxiaocai leverages Ant Group’s self-developed foundation model capabilities and partners with financial institutions to deliver expert-level, customized financial services for users. It offers tailored market insights, simplifies complex financial concepts, and provides personalized investment advice. For instance, Maxiaocai can swiftly generate visual summaries of company financial reports, highlighting key details for users, and breaking down intricate financial terms into easy-to-understand language. Ant Group has been public-testing the AI financial manager since early 2024. As of August 2024, it has attracted 70 million monthly active users, with 45% of them living in cities below the third tier. Over 200 financial institutions, including asset management companies, securities firms, financial media, and more than 15,000 financial content creators, are now connected to the platform.
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Ant Group has launched a new 'life assistant' app, Zhixiaobao, connecting users to a multitude of AI-agents trained for shopping, fitness and language learning. the app is powered by Ant Group’s BaiLing foundation model with a mission to make everyday tasks easier through user-friendly interactions. Through typing or voice chat in Zhixiaobao, users can order meals, hail taxis, book tickets, and discover local dining and entertainment options, accessing third-party services in Alipay more easily. The app also provides a number of built-in AI agents, each with specific domain knowledge. This includes an 'English Language Tutor' agent which can help users make a learning plan and provide tips for learning the language. A 'Fitness Pro' agent is also available to help users design workout routines and come up with personalized training advice. In addition to Zhixiaobao, Ant Group also unveiled a new AI Agent Development Platform enabling merchants to create customized AI service agents which can be deployed in just one minute, without the need for coding.
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Facing liquidity challenges, affluent people in Hong Kong and mainland China are increasingly turning to private lenders and using stocks as collateral for borrowing. As public capital markets have yet to fully recover, traditional banks remain cautious about lending. Meanwhile, property market woes continue, leaving stocks as the best collateral option for some ultra-high-net-worth individuals (UHNWIs) to generate liquidity. Driven by distressed developers and wealthy families in Hong Kong, the private credit market grew to at least US$124 billion in Asia-Pacific in 2023. Lenders expect more affluent people to borrow against stocks this year as interest rates are expected to begin falling, which should boost stock performance. HSBC, one of the biggest private banks, is also seeing a resurgence of lending against marketable securities, such as stocks, among wealthy clients. The Bank noted that clients are increasingly interested in rate protection structures such as collars, which are options used to hedge exposure to interest rate move.?
?? Asia Pacific Fintech Pulse
Sakana AI, the Japanese startup founded by former Google researchers David Ha and Llion Jones and former diplomat Ren Ito, has announced it has raised $100 million in a series A round of funding. The investment has been led by several industry heavyweights, including New Enterprise Associates, Khosla Ventures and Lux Capital, with participation from Nvidia–signaling strong traction for the year-old company. Sakana made a striking appearance last year with its high-profile founders and a novel, nature-inspired collective intelligence approach to developing high-performing foundation models. The idea was to bring the best of multiple smaller AI models together, much like a swarm, to deliver complex results. Most recently, it shared research on the AI Scientist, an LLM-based system that automates the entire research lifecycle, right from ideation, writing code, running experiments and summarizing results to writing entire papers and conducting peer-review. In a blog post published today, Sakana said Nvidia will offer infrastructure support on two fronts. First, it will provide the latest GPU systems to develop advanced models using novel techniques and then it will give access to Nvidia-powered data centers within Japan for running experiments.
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Ripple CEO Brad Garlinghouse believes that Japan presents a promising market for stablecoins and anticipates strong demand for a Japanese yen stablecoin. However, he refrained from making any promises about a Ripple stablecoin within Japan yet until the firm launches one in the United States. “People will want to hold yen stablecoins, and I think that is only a matter of time,” Garlinghouse said in an interview with Bloomberg’s The China Show. Garlinghouse explained that while he finds Japan to be a “conservative market in some ways,” he also finds the market to be “really healthy” in other respects. The Ripple head boss went on to explain that, compared to other countries, Japan has “leaned in” on offering regulatory clarity and legislation on both stablecoins and cryptocurrencies. On Sept. 5, Cointelegraph reported that Japan’s three largest banks, Mitsubishi UFJ Bank, Sumitomo Mitsui Banking Corporation, and Mizuho Bank, are backing Datachain’s new stablecoin platform Project Pax to facilitate cross-border business settlements.
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Stripe, the payments infrastructure fintech privately valued at $70 billion, is steadily growing its presence in Asia Pacific, both in terms of footprint as well as its ecosystem. It is planning to go live in Indonesia soon, adding the Southeast Asian giant to existing onshore businesses in Singapore, India, Thailand and Malaysia, as well as cross-border services in Hong Kong, Taiwan and mainland China. The new market reflects both macro tailwinds in Southeast Asia, as well as the company’s making more products available in the region. For instance, Stripe will introduce pre-payment services such as optimized checkouts, and post-transaction ones like billing and fraud detection, by the end of the year. The checkout suite will involves lots of partnerships with local payment partners – GrabPay, Affirm, WeChat Pay, etc – to boost online conversion of end-customer sales. For example, Stripe works with partners to make sure a customer’s profile is auto-filled, no matter what payment player they’re interfacing with. The company is automating ways to let merchants add new payment methods to their Stripe payments service. One new tweak is to enable a merchant to run an A/B test to determine if it’s worthwhile to onboard a specific payment partner.
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Stripe saw its cross-border payments volume in Asia increase by over 30% last year. Among the tools is Stripe’s optimized checkout suite, which lets businesses create a “high-performing checkout flow” and now uses artificial intelligence to determine which payment methods to show for a given customer. Merchants can also run no-code A/B tests for payment methods, which is an industry first, available only from its service. Stripe’s test of the effectiveness of Adaptive Pricing in the United States, the United Kingdom, Canada and the European Union showed that it led to an average 17.8% increase in cross-border revenue for businesses. The test also found that 90% of customers checked out in their local currency when given the option. Meanwhile, Stripe also is seeing an expectation among consumers in Asia for cross-border commerce to improve their shopping experience, citing company research showing that 67% of consumers in Singapore expect that by 2030, merchant location will factor less into their shopping decisions.
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India, despite being home to 20% of the world’s chip designers, lacks a significant presence in the global semiconductor market. However, in recent months, the Indian government has begun investing in an effort to establish the country in semiconductors, as companies worldwide have adopted a “China-plus-one” strategy, seeking alternatives to China. BigEndian Semiconductors aims to capitalize on this shift by kicking off development of surveillance chips for cameras. Founded in May, the Bengaluru-based fabless design startup is led by CEO Sunil Kumar, a former executive at ARM Broadcom, and Intel, and the rest of the founding team add experience at chipmakers like Broadcom and Cypress Semiconductors. BigEndian initially plans surveillance chips, working with Taiwanese fab company UMC, with its reference chip based on a 28nm node process coming in the first quarter of 2025. The startup also plans to broaden its presence over time and look at the overall IoT market, predominantly led by 16- and 32-bit microcontrollers. Unlike a traditional fabless semiconductor company, BigEndian is working on building its platform-as-a-service model to help governments avoid Chinese middleware access, which is common among existing surveillance solutions. This model will bring software solutions to help manufacturers and customers customize how their surveillance cameras work. To kick off, BigEndian has raised $3 million in an all-equity seed round led by Vertex Ventures SEA and India.
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Cheers,
Medhy,
Your Fintech Navigator
Chief Executive Officer at Atrium Consulting Inc
5 个月You should consider reading "Bad Money" by Brad Rigden. It's a fantastic resource covering these topics listed in your post. Here's a review link. https://www.dhirubhai.net/posts/kevinmccarten_fintech-fiscalpolicy-politics-activity-7108167260816510976-f6J8?utm_source=share&utm_medium=member_desktop
Great update, Medhy Souidi! Your latest edition of What The FinTech sounds exciting and packed with valuable insights. Looking forward to diving into the big fintech updates and staying informed. Keep up the fantastic work!