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  • Adapting for Uncertainty - a research brief from Kapronasia and Equinix
    Adapting for Uncertainty - a research brief from Kapronasia and Equinix The recent pandemic has been an extreme example of financial institutions (FIs) finding themselves blindsided by disruptive events. But meeting unexpected demands is a constant across all aspects of an FI’s business. Customer priorities can also shift according to economic and environmental circumstances, necessitating FIs to respond by providing customers…
  • Ecosystems for Success - a report from Kapronasia sponsored by ASX
    Ecosystems for Success - a report from Kapronasia sponsored by ASX The advent of electronic trading in the 1980s in the United States introduced a new era of algorithmic or high frequency trading (HFT) whereby firms tried to get their trading applications as close as possible to an exchange’s matching engine to lower latency and speed up trade execution. By the…
  • State of Regtech in APAC - a report from Kapronasia and Enterprise Ireland
    State of Regtech in APAC - a report from Kapronasia and Enterprise Ireland Asia, with its gleaming skyscrapers dotting some of the world's major financial centers and home to more than half the world's population, is at an inflection point. Facing spiralling compliance costs and a dynamic regulatory environment, financial institutions have turned to regulatory technology (regtech) to help acheive compliance while minimising…

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Latest Insight

Why did Grab invest in LinkAja?

Written by Kapronasia || November 18 2020

Grab has long had its eye on Indonesia, the home turf of its rival Gojek and Southeast Asia's largest economy. If Grab is going to be region's dominant super app, it needs to have a strong foothold in Indonesia, which by population is nearly as large as the Philippines, Vietnam, and Thailand combined. By leading a US$100 million Series B funding round in Indonesia's homegrown e-wallet LinkAja, Grab is signaling its intention to challenge Gojek more forcefully in the country's burgeoning digital finance segment.

On November 2nd, the People’s Bank of China (PBoC), the China Banking and Insurance Regulatory Commission (CBIRC), the China Securities Regulatory Commission (CSRC) and the State Administration of Foreign Exchange held talks with Ant Group’s management executives, including its founder Jack Ma. The next day, regulators issued new draft rules to tighten China’s rapidly growing online microlending sector. Ant Group’s IPO in Shanghai and Hong Kong was subsequently suspended after Ant said there had been “material changes” in the regulatory stance on financial services, which could result in Ant failing to meet the conditions for listing and providing information disclosures.

Singapore steps up fight against financial crime

Written by Kapronasia || November 17 2020

After banks in Singapore were ensnared in the 1MDB scandal, Singaporean authorities stepped up their fight against financial crime. Having strict anti-fraud and anti-money laundering controls in place to fraud is essential for Singapore to strengthen its status as a global financial center for wealth management and major fintech hub. Yet some financial crime in the digital realm is posing new challenges to Singapore. The city-state's involvement in the Wirecard scandal is a case in point.

Xinja's future looks uncertain

Written by Kapronasia || November 16 2020

For digital banks, the pandemic is a double-edged sword. It is increasing demand for digital banking but revealing the fragility of the typical neobank business model. Many of the neobanks that couldn't make money in better times are now in varying degrees of financial trouble. Australia's Xinja finds itself in such a predicament. It needs to borrow a page out of the book of Revolut or N26 and secure another massive capital injection. That is proving to be easier said than done though. An investment of A$433 million led by Dubai-based World Investments Group (WIG) announced in March has yet to be confirmed.

Fintechs could boost pandemic-hit remittances in Asia

Written by Kapronasia || November 12 2020

After years of solid growth, global remittance flows are set to shrink in both 2020 and 2021, weighed down by the pandemic and its associated economic fallout. Asia, one of the fastest growing regions for remittances in recent years, will be one of the hardest hit regions, the World Bank estimates. Remittances in East Asia and the Pacific are projected to fall by 11% in 2020 and 4% in 2021. In South Asia, remittance flows are predicted to fall 4% this year and 11% the following year.

Singapore's SMEs may prove receptive to digital banks

Written by Kapronasia || November 11 2020

All too often, the digital banking conversation focuses on retail customers. It makes for a good story, tech-savvy millennials doing all their banking from the convenience of a smartphone. And the promise of achieving massive scale is alluring. But in Singapore, the retail banking market will be a tough nut to crack. 98% of Singaporeans already have a bank account, while DBS, UOB and OCBC are well prepared for digital challengers. The less glamorous but more promising market opportunity for digital banks lies with small and medium-sized enterprises.

Suspended Ant IPO creates uncertainty for Chinese fintechs

Written by Kapronasia || November 10 2020

With the suspension of Ant Group's IPO, Beijing is once again signaling that its patience for fintech-induced disruption has limits. In the past, Chinese regulators throttled entire fintech industry segments - cryptocurrency and P2P lending - that they deemed excessively risky to the financial system and a threat to social stability. To be sure, Ant Group plays an integral (some would say peerless) role in the Chinese financial system which makes it very different from P2P lenders and crypto firms. However, Beijing places a premium on controlling systemic financial risk. No company can expect the enthusiastic backing of regulators if it appears too gung-ho about disruption and somewhat contemptuous of the system. China officially remains a socialist market economy, lest fintechs or their investors forget.

Grab and Singtel close in on Singapore digital bank license

Written by Kapronasia || November 04 2020

The Grab-Singtel consortium is in many ways the ideal candidate for a Singapore digital full bank license (DFB), which allows the holder to serve both retail and corporate clients. Both firms are based in the city-state but have a strong regional presence. Grab is Singapore's most prominent unicorn, Singtel its foremost telecoms firm, backed by Temasek. Joining forces, they could draw on large troves of user data to tailor digital banking services for a target demographic of millennials and SMEs. In Singapore, Singtel has 4.3 million subscribers.

GCash sees surge in downloads and transaction volume

Written by Kapronasia || November 03 2020

By at least a few metrics, Ant Group-backed GCash is the Philippines' top e-wallet. GCash, a subsidiary of the Globe Telecom-owned fintech startup Mynt, recorded 10 million downloads in the first nine months of the year, more than any other finance app, according to analytics firm AppAnnie. User growth rose 130% over that period. GCash expects transaction volume to reach P1 trillion this year, an amount that it took the company the three previous years combined to reach.

How is BNPL developing in Southeast Asia?

Written by Kapronasia || October 29 2020

Buy now, pay later is taking the payments world by storm in Europe, the United States and Australia. Firms like Klarna, Afterpay, Sezzle and PayPal (with its "Pay in 4" product) are tapping strong consumer demand for interest-free installment payments. In Southeast Asia, however, BNPL remains at a nascent stage. None of the big BNPL players have launched their services in the region yet. There are some promising local startups though.Singapore-based hoolah is one of Southeast Asia's ascendant BNPL startups. In March, Hoolah raised an undisclosed eight-figure sum in its Series A round. Hoolah will use the cash to expand regionally. Investors participating in the round included venture-capital firm Allectus, iGlobe Ventures, Genting Ventures, former Lazada group CEO Max Bittner, and FNZ CEO Tim Neville.

Hoolah has been in Singapore since 2018 and works with merchants including HipVan, Castlery, Sennheiser and Skin Inc. The firm charges merchant-partners a fee for every successful transaction. Hoolah's BNPL service lets shoppers make purchases in three interest-free monthly installments. The company's key customer segments are youngsters (aged 18-26) who are not yet able to qualify for a credit card, some 26 to 35-year-olds and gig-economy workers. The latter segment likes using hoolah because the workers do not receive fixed salaries.

Hoolah enjoys a first-mover's advantage in Singapore. In an interview with Vulcan Post last year, co-founder and COO Arvin Singh explained why BNPL has been slow to arrive in Southeasts Asia. “There’s a high degree of complexity of achieving a seamless checkout experience while managing a flexible payment solution that includes risk management, consumer payback, direct merchant integration, merchant side funding and the commercials," he said.

In September, hoolah launched its BNPL service in Singapore's physical retail stores, where it sees an opportunity to grow sales as the pandemic eases in the city-state. To use the service, customers scan a QR code at the point of sale with hoolah's app. They then enter the total order amount, which is divided into three monthly payments.

Hoolah launched in Malaysia earlier this year and plans to expand to Hong and Thailand before the end of 2020.

Meanwhile, of the major global BNPL players, Afterpay is likely to be the first to expand to Southeast Asia. The Australian firm is reportedly mulling the acquisition of EmpatKali, which like hoolah is based in Singapore, but is focused on the Indonesia market. EmpatKali has "an established, albeit, very early stage position in Indonesia,” Afterpay's CEO Anthony Eisen told Reuters.

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