Digital Transformation
InsurTech

APAC Insurers Must Ramp up System Modernization Efforts

									by Fintech News Singapore
March 18, 2021

The COVID-19 pandemic has accelerated the adoption of digital technologies in all sectors and across all regions. In Asia Pacific (APAC), insurers have recognized the importance of system modernization for the long-term success of their business. Yet, most are still allocating slim financial resources on such initiatives, an important hurdle that insurers need to overcome to make a successful move to the cloud, Arvind Swami, director of financial services for Red Hat’s APAC operations, told Fintech News Singapore.
These statements come on the back of the release of a new research his company commissioned Forrester Consulting to conduct. The study polled more than 100 insurance decision makers in APAC and found that although 61% of them view their core system modernization initiatives as the most critical component of their digital business strategies, 69% say their firms spend less than 10% of their IT business on these initiatives.
These findings aren’t surprising at a time when the COVID-19 crisis is forcing companies to cut costs as demand gets muted and as the global economy enters a deep recession.
Arvind Swami
“When times get tough, finance teams get tougher. Business cases that demonstrate a fast, substantial return on investment (ROI) will be funded, driving quick improvements and impact for insurers in the short term,”
Swami explained.

But delaying system modernization initiatives can prove to be highly detrimental in the long run, he said, as the gap between innovators and laggers widens.
“While financial impact drives which modernization efforts win now, insurers must prepare for the future with solutions offering flexibility on multiple dimensions, including integrations, deployment models, and marketplaces for value-added capabilities, in order to support success in the long-term,”
Swami said.
“Investments have to be made if businesses want to reap the full benefits of system modernization, and to prove business value to executive leadership, APAC insurers must embed their system modernization strategies into their companies’ overall strategies and involve the right business stakeholders and ecosystem from the start.”
Ramping up digital transformation amid COVID-19
In just a few months’ time, the COVID-19 crisis has brought about years of change in the way companies do business. A 2020 McKinsey Global Survey of executives found that companies have accelerated the digitalization of their customer and supply-chain interactions, and of their internal operations, by three to four years.
In APAC, insurers’ system modernization efforts have been centered on improving customer experience by, for instance, reducing claims processing time (91%) and lowering underwriting cycle time (76%). There’s also eagerness to achieve better cost savings with 82% of respondents working on modernizing their policy administration systems, and 81% seeking to improve their fraud prevention capabilities.
Core systems with the highest priority for modernization, No Time To Wait- Start Your System Modernization Journey Now, Forrester, Jan 2021
In the long run, APAC insurers believe these system modernization efforts will pay off by enabling for improved customer experience (70%), as well as increased IT speed (65%) and agility (60%) – the top three benefits respondents either have already observed or are expected from these initiatives.
“Leading in the APAC insurance market requires greater customer centricity and meaningful differentiation,” Swami said.
“Modernizing their core systems allows insurers to work better, faster and smarter, which in turn gives them a leg up on customer experience. These then go on to help insurers achieve the expected ROI, demonstrating positive financial impact such as improved customer retention due to better service delivery.”
Benefits realized or expected from modernizing core systems, No Time To Wait- Start Your System Modernization Journey Now, Forrester, Jan 2021
When asked about the top technology challenges they’ve faced in their modernization initiatives, APAC insurers cited data migration (71%), integration with up/downstream systems (61%) and cloud migration (57%). These results are unsurprising given the complex construct of insurance legacy systems and infrastructure which creates migration and integration challenges.
Technology challenges experienced with system modernization efforts, No Time To Wait- Start Your System Modernization Journey Now, Forrester, Jan 2021
To overcome business and technical roadblocks, Swami advises insurers to embrace solutions that provide both agility and flexibility in their system modernization initiatives such as leveraging cloud computing, widening their range of deployment options and adopting low-code capabilities for changes and updates. A hybrid cloud approach can also provide insurers with the ability to move, adapt, and adjust as they see fit, based upon business requirements and at the same time complying with the regulatory requirements for the insurance industry, he added.
Swiss Re Institute forecasts global insurance premiums to grow by 3.4% in 2021 after contracting an estimated 1.4% in 2020. China will remain the fastest growing market with non-life premiums up an estimated 10% annually over the next two years, largely thanks to a strong health business. The other emerging markets will see aggregate premium growth of nearly 4% annually.
In the life market too Swiss Re Institute predicts a rebound led by emerging markets, particularly emerging Asia where premiums are forecast to increase by 6.9% in 2021.

Featured image credit: Freepik

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Regtech

DBS Enables SMEs to Open Accounts Using Facial Biometrics

									by Fintech News Singapore
February 23, 2021

DBS is using facial biometrics for online corporate account opening for SMEs to speed up information authentication and verification.
This new feature runs on the Government Technology Agency of Singapore’s (GovTech) SingPass Face Verification technology, and DBS claims to be the first bank to be deploying the technology for the business community.
DBS first introduced SingPass Face Verification as a pilot for SME account opening in November 2020 and since then, more than 100 customers have used the feature.
With the success of the pilot, DBS will offer SingPass Face Verification as an authentication option for all qualifying applications from today.

Coupled with further enhancements to the customer onboarding journey, SME accounts can now be opened and accessed online in 20 minutes.
Joyce Tee, Group Head of SME Banking at DBS, said,
Joyce Tee
“We are pleased to partner GovTech to deploy SingPass Face Verification for the benefit of our SMEs in Singapore. Getting a corporate account opened is the gateway for SMEs to access the critical banking services they need, including working capital support, supply chain financing, digital transformation solutions, property loans and more.

That’s why we have doubled down on our digital innovation efforts to make the customer onboarding journey as seamless and intuitive as possible. This in turn enables SMEs to remain focused on their business operations and stay ahead in today’s business environment.”
The integration of SingPass Face Verification to speed up corporate account opening comes less than six months after DBS announced that it was the first bank in Singapore to use the same technology to expedite the opening of DBS digibank accounts for retail customers.
To date, over 10,000 retail customers have used SingPass Face Verification to register for their DBS digibank access.

Featured image credit: DBS

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Regtech

Fenergo Bolsters APAC Presence With New Head of Sales for Asia

									by Fintech News Singapore
February 25, 2021

Fenergo, provider of digital transformation, customer journey and client lifecycle management (CLM) solutions, announced the appointment of Gary Brookes as its Head of Sales in Asia. In his new role, Brookes will spearhead growth and execute Fenergo’s cloud strategy across the Asian continent.
Brookes brings with him an extensive background in driving revenue for disruptive and fast growth technology firms across Asia and Australia with sales leadership roles at Datasite, eFront and Ansarada.
Brookes will look to expand Fenergo’s sales presence in Singapore, Tokyo and Hong Kong and will be responsible for growing and strengthening Fenergo’s partner ecosystem to boost market share and accelerate implementation.
Brookes also aims to further establish Fenergo’s presence in capital markets while accelerating growth in commercial, business, retail and private banking as firms seek to accelerate digital transformation and automate Know your Customer (KYC) and anti-money laundering (AML) compliance processes.

Commenting on his new role, Gary Brookes as its Head of Sales in Asia said,
Gary Brookes
“Our research shows that financial institutions (FIs) in APAC were fined more than anywhere else in the world at USD $5.2 billion in 2020. They are under unprecedented pressure to satisfy regulatory requirements while meeting high customer expectations for a frictionless end-to-end client experience.

Fenergo’s deep expertise in financial services, market leading CLM solution and regulatory rules engine covering 100 jurisdictions make it perfectly placed to support the specific needs of financial institutions in APAC and I’m excited be joining at this growth juncture.”
Paul Kavanagh, Chief Revenue Officer, Fenergo said,
Paul Kavanagh
“The increasingly active regulatory environment combined with the impact of the pandemic has triggered high demand for our CLM solutions amongst APAC FIs.

We are delighted to welcome Gary who will deliver on our promise to provide cloud-based CLM solutions that enable FIs to automate compliance processes, deliver frictionless client journeys and accelerate time to revenue.”

Featured image credit: edited from Pexels

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Regtech

PwC Singapore Teams Up with NetGuardians to Help Banks Fight Fraud

									by Fintech News Singapore
February 25, 2021

Swiss fintech NetGuardians, known for its AI-based, enterprise risk platform for combating banking fraud, announced a partnership with PwC Singapore to help banks fight fraud.
With this partnership, banks in Singapore will have access to NetGuardians’ solution along with PwC Singapore’s fraud advisory and technology implementation services.
NetGuardians said that its AI-based fraud solution is already being used by established Tier 1 to Tier 3 banks as well as new and emerging digital banks in Asia Pacific and across the world.
The move comes as banks are increasingly offering innovative digital services to meet the needs of their clients and remain competitive.

These digital services including mobile and online banking are evolving at pace, which brings opportunities as well as challenges such as an increased risk of fraud. Banks need to be vigilant about protecting their customers and their brands.
Working together, NetGuardians and PwC Singapore aims to help banks protect their customers and employees from the growing number of digital fraud types including social-engineering attacks, love and CEO scams, business email compromise (BEC) fraud, account takeovers, fake invoices, investment fraud, internal fraud, and many more.
Peter Marini, NetGuardians MD APAC said,
Peter Marini
“Frictionless banking is of paramount importance to customers today. While trying to meet the needs of its customers, banks also need to ensure the services offered are well protected to keep all stakeholders happy.

Our partnership with PwC Singapore offers banks comprehensive protection against the fraudsters and will help them maintain customer trust by stopping ever-more creative fraud attacks.”
Richard Major, Financial Crime Leader, PwC South East Asia Consulting said,
Richard Major
“At PwC, our purpose is to build trust in society and solve important problems. The accelerated shift to remote working and the introduction of digital banking has increased exposure to frauds.

We are excited to work with NetGuardians to help banks – new and old – protect their staff and their customers with cost-effective and efficient fraud mitigation advice and solutions.”

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InsurTech
Thailand

Interest in Thai Insurtech Sector Picks up

									by Fintech News Singapore
March 2, 2021

Interest in Thailand’s insurtech sector is picking up, with companies in the space closing million dollar funding rounds, incumbents ramping up digital capabilities, and foreign companies entering the market.
So far, 2021 has seen two Thai insurtech companies securing funding. The two Series A rounds were closed by Muang Thai Broker (US$6.7 million), the operator of online insurance comparison platform and sales platform Gettgo, and AppMan (US$4.6 million), the operator of AgentMate, an electronic point-of-sale (POS) that digitizes the sales process of life and non-life insurance.

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AppMan, one of Thailand’s insurtech pioneers, said it will use the proceeds to expand and develop innovative technologies in the Asia Pacific (APAC) region, including artificial intelligence (AI) for insights screening for insurance and financial services incumbents.
Founded in 2011, AppMan has since expanded across Southeast Asia, opening offices in Ho Chi Minh City, Vietnam, and Jakarta, Indonesia.

AppMan raises US$4.6 million Series A funding round, Feb 17, 2021, Photo: AppMan
Muang Thai Broker (MTB)’s US$6.7 million Series A funding round came from parent company Muang Thai Group Holdings (MTGH).
MTB, the only MTGH subsidiary authorized by Thailand’s Office of Insurance Commission (OIC) to sell both life and non-life insurance products, launched Gettgo in 2018 in response to the increasing role of technology and digital platforms in the insurance industry.
MTB said it will spend the capital injection on improving its distribution platform and developing omni-channels to help customers gather information and easily make comparisons between complex insurance products.
Insurtech regulatory sandbox welcomes new participant
Over the past years, the Thai insurtech industry has been supported by regulators which view technology as an enabler for financial inclusion.
Earlier this month, the OIC welcomed another insurtech project to join its regulatory sandbox program: a pay-as-you-drive insurance product developed by insurance firm Mitsui Sumitomo Insurance Group (MSIG) Thailand and mobile leader Advanced Info Service (AIS).
The product, known as Prakan Kubdee (Good Driving Insurance), calculates premiums from real driving behavior, gauging five key factors: distance, speed, journey time, time of the day driven and areas driven. It uses an Internet-of-Things (IoT) device attached to the vehicle’s on-board diagnostic (OBD) port to capture more in-depth, accurate data than a smartphone app would. Data are transmitted through the AIS network to MSIG’s cloud-based system where they are processed.
The offering also comes with digital payment capabilities from the AIS digital payment gateway system, MPay One, allowing for a more convenient, digital experiences, said Alistair David Johnston, managing director of new business at AIS.
The idea for Prakan Kubdee emerged during the global pandemic, Rattapol Gitisakchaiyakul, CEO of MSIG Thailand, said, noting that COVID-19 has forced incumbents to innovate and adjust to “the new normal.”
With Prakan Kubdee, customers can save up to 50% on their motor insurance premiums and receive 24-hour customer support, MSIG said, adding that research has shown that up to 60% of drivers have never been in an accident and have good driving behavior but still end up paying the same premiums as rickers customers.
Promoting innovation in the insurance sector
The OIC launched its insurtech sandbox in 2017 after establishing the Center of Insurtech Thailand for research, technological exchange and insurance product development. The sandbox allows insurance firms and tech firms to beta test their insurtech innovations.
Dr Suthiphon Thaveechaiyagarn, the OIC’s secretary general at the time, said in an interview with Asia Insurance Review that policy makers were “more than ready to amend our regulations if it will yield higher benefits to society,” showcasing willingness to increase digitalization in the sector.
Before these key initiatives, Thailand was already home to several insurtech startups that provided a wide range of services from distribution channels and sales support, to claim handling.
Sunday Insurance is perhaps one of Thailand’s most notable insurtech players. Founded in 2017, Sunday uses machine learning (ML) algorithms to provide customers with a broader range of policies, covering properties and possessions, with highly customized premiums.
Sunday raised US$9 million in a pre-Series B bridge round in September 2020 which it said it would use to grow in its home country, expand to Indonesia and develop its Sunday Service app with health and motor insurance products and services.
Foreign tech startups eye Thai market
Though still relatively small, the Thai insurance sector has grown rapidly over the past years with still plenty of opportunities for players to tap into.
Between 2008 and 2017, gross premiums written grew at an average annual rate of approximately 16.9%, substantially above nominal GDP growth of 9.9% during the same period, according to a 2019 assessment by the International Monetary Fund (IMF).
As the result, the insurance penetration ratio (the ratio of premiums written to GDP) gradually increased from 3.63% in 2008 to 5.39% in 2017.
Several overseas insurtech have expanded to Thailand to capitalize on the opportunity. Singapore’s Vouch Insurtech teamed up with six Thai insurers in 2018 to launch a digital insurance platform in Thailand called FairDee.
Igloo, another insurtech startup from Singapore, recently announced a partnership with Foodpanda Thailand to provide delivery riders with a comprehensive insurance coverage plan.
Formerly known as Axinan, Igloo raised US$8.2 million in April 2020 to broaden its foothold in Southeast Asia. In addition to Singapore and Thailand, Igloo operates in Vietnam, the Philippines, Indonesia and Malaysia.

Featured image: Photo by Alexandr Podvalny from Pexels

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Regtech

Clearstream Selects BearingPoint to Comply With Singapore’s Compliance Reporting

									by Fintech News Singapore
March 4, 2021

European supplier of post-trading services Clearstream has selected BearingPoint RegTech, a Netherlands-based compliance technology provider, for its Abacus360 Banking solution for MAS 610 reporting.
BearingPoint RegTech said that Abacus360 Banking is a standard software for national and international prudential reporting, statistical reporting as well as granular reporting and ad-hoc reporting.
Starting January 2021 onwards, there will be a testing phase with go-live scheduled for July 2021.
MAS 610 is the core set of reporting requirements within Singapore’s financial services space, and contains the balance sheet and off-balance sheet information of banks and their underlying details

MAS 610 reporting contains the balance sheet and off-balance sheet information of banks and their underlying details with the objective to promote market transparency for banks in Singapore.
MAS 610 applies to all banks in Singapore, including foreign-owned entities and has considerably increased the reporting requirements for banks.
Bella Lai
“We are delighted to enable Clearstream Singapore for MAS 610 reporting. With increased complexity on regulatory reporting within shorter timelines, the implementation of BearingPoint’s award winning Abacus360 Banking mitigates risks associated with regulatory reporting.

The implementation marks an important milestone for the firm in Asia. We look forward to further success with Clearstream and to extend our footprint in the region”
said Bella Lai, Head of RegTech APAC at BearingPoint RegTech.

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Funding
InsurTech

Insurtech Symbo Secures US$9.4 Million Funding to Scale Its Platform in SE Asia and India

									by Fintech News Singapore
March 4, 2021

Symbo Platform Holdings, a Singapore-based insurtech platform, announced the completion of a US$9.4 million funding round led by the CreditEase Fintech Investment Fund.
The round also saw participation from San Francisco-based investment firm Think Investments along with follow on investment from existing investors Integra Partners, Insignia Ventures and AJ Capital.
With the new investment, the Symbo aims to bolster its core technology platform and leadership team to bring its offerings to scale across India and Southeast Asia.
Key areas of investment include recruitment across senior technology and product functions, in addition to senior business development hires in Singapore, Malaysia and Indonesia.

A large portion of the funds has also been earmarked for investment into Symbo’s Indian affiliate, with the intention of acquiring complete ownership of the business, subject to applicable regulatory approvals.
The latest funding round follows Symbo’s acquisition of Singapore-based digital health platform Vivant, bringing on a complementary digital health offering to its platform and deepening its client base across India and Southeast Asia.
Established in 2017, Symbo’s insurtech platform seamlessly supports agents, third party administrators (TPAs), brokers, corporates and insurers in the purchase, distribution and administration of insurance across India and Southeast Asia.
Symbo’s notable engagements include AXA Affin General Insurance Berhad (Malaysia), PM Care (Malaysia), Bajaj Finserv Health, and many more leading corporates, insurers and national retailers.
Its platform reportedly has over 80,000 agents and 45 technology licensing partners, supporting over USD 100 million in annual GWP across India, Malaysia, Singapore and Indonesia.
Commenting on the Series A raise, Adrit Raha, Co-Founder and CEO of Symbo said,
Adrit Raha
“My colleagues and I are thrilled to welcome CreditEase Fintech Investment Fund and Think Investments to the company, and are also extremely grateful to Integra Partners, Insignia Ventures and all our investors for their continued support.

This is the dream team of investors and their deep knowledge of Asia will play a pivotal role in Symbo’s continued growth. With this significant investment, we will rapidly scale our leading technology platform to improve the delivery of insurance to millions of underinsured individuals and families across India and Southeast Asia.”

Featured image: Adrit Raha, Co-Founder and CEO of Symbo

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Open Banking
Thailand

The State Open Banking in Thailand in 2021

									by Fintech News Singapore
March 5, 2021

Though no legal regulation on open banking currently exists in Thailand, the government’s digital push with the Thailand 4.0 strategy, and the introduction the Personal Data Protection Act (PDPA) last year suggest a move to open banking frameworks is inevitable.
Compared to the likes of Singapore and Malaysia, Thailand is lagging behind when it comes to open banking with neither the central bank nor regulator having yet released any framework or guidelines.

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Instead, there has been a broader ambition by the government to elevate Thailand in an increasingly advanced digital generation. In 2016, it launched Thailand 4.0, a proposed economic model focused on innovation and high-level services, propelled by advanced digital technology.
This was followed subsequently by numerous initiatives by the country’s central bank, Bank of Thailand (BOT), the Securities and Exchange Commission (SEC), and the Office of Insurance Commission (OIC) to accelerate innovation in the banking, financial, and insurance sector.

BOT launched the fintech regulatory sandbox in 2016, which was followed a year later by the introduction of e-payment regulation. E-payment regulation aims to boost fintech innovation by providing a framework for how e-money and electronic payment services are provided. BOT has also been driving the National e-Payment Master Plan, which includes among other objectives the development of the national payment infrastructure PromptPay and its linkage to other Southeast Asian payment networks such as PayNow in Singapore.
Meanwhile, the Office of Insurance Commission introduced its insurtech sandbox in 2017 to allow incumbents and other market participants to test out innovative products.
Thailand’s SEC has so far taken two main initiatives: in June 2017, it launched a series of sandboxes for securities, derivatives, clearing houses, know-your-customer (KYC) initiatives, and e-trading, and in January 2018, it introduced an API portal for financial product information, exchange rates and more.
Since Thailand embarked on its digitalization journey, the country has experienced a shift towards a cashless economy, according to the Ministry of Foreign Affairs. Mobile and Internet banking transactions increased by 83% in 2016, with mobile and Internet banking accounting for 33% of total payment transaction volume, a sharp increase from only 8% in 2010.
Open banking market initiatives
Despite very little regulatory conversation about open banking in Thailand to date, banks are proactively launching developer portals with open banking APIs in tandem with the government’s push to encourage innovation.
Bangkok Bank was the first bank in Thailand to do, introducing in January 2017 its developer portal. Initially, the portal had just four APIs but it nevertheless paved the way for other banks in the country, including Siam Commercial Bank, Kasikorn Bank and Bank of Ayudhya (Krungsri), to develop similar platforms to encourage innovation.
In parallel, these banks are launching new products and services related to open banking and which leverage APIs. For example, Krungsri announced in July 2018 that it had developed a new application for mortgage loans as part of a broader suite of digital solutions. Designed for business partners, including property developers and property search portals, these solutions are meant to be offered with API access to mortgage applications.
Meanwhile, Siam Commercial Bank has opted for a more collaborative approach, teaming up with social media group Line Thailand in May 2018 to allow corporate users to research notifications of deposits, withdrawals and card spending. It also partnered with Mall Group in August 2018 to launch a number of new banking and financial services, with several of them leveraging the bank’s APIs.
As of Kasikorn Bank, the bank said in January 2020 that more than 50 partner companies had linked with its API system.
These efforts sit alongside the implementation of the Personal Data Protection Act (PDPA), a new legislation introduced in May 2019. PDPA, which will come into full effect on June 1, 2021, mandates that data controllers and processors who use personal data must receive consent from data owners and use it only for expressed purposes.
Based on experiences in the UK, the European Union (EU), and Australia, consumer data legislation is oftentimes the first step in open banking implementation. According to an analysis by tech and management consultancy Capco, these recent developments in Thailand suggest that an open banking framework could be just around the corner.
In Australia, the introduction of the Consumer Data Right (CDR) on July 1, 2020 saw the launch of the first phase of open banking. In the EU, the revised Payment Services Directive (PSD2) combined with the General Data Protection Regulation (GDPR) are forcing banks to both open up and protect their customers’ data.

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Open Banking Makes Inroads in Vietnam

Open Banking
Vietnam

Open Banking Makes Inroads in Vietnam

									by Fintech News Vietnam
March 8, 2021

In Vietnam, banks are becoming increasingly aware of open banking and recognizing the need to embrace open APIs to keep up with the rapidly evolving financial landscape.

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So far, at least two local banks have launched developer portals and are today providing open APIs this includes: Asia Commercial Joint Stock Bank (ACB); and Orient Commercial Joint Stock Bank (OCB), which launched its open banking platform in January 2020.
Saigon Commercial Bank (SBC) have shared plans to implement open banking practices, while Techcombank recently hosted a webinar to educate professionals on the merits of open banking.

Data from the State Bank of Vietnam (SBV) shows that 94% of banks in Vietnam have initially implemented or been researching and developing a digital transformation strategy, of which 35% of banks are implementing a digital transformation strategy.
While open banking is already a reality in jurisdictions such as the UK, the European Union (EU) and Australia where regulatory requirements are in force, the concept is still relatively new in Vietnam where little regulatory discussion has taken place so far. Instead, the central bank has been actively pursuing partnership opportunities to accelerate development.
In Vietnam, the SBV is leading the country’s push towards greater digitalization in the banking and financial services industry. The SBV Fintech Steering Committee was established in March 2017 to spur innovation particularly in electronic know-your-customer (eKYC), peer-to-peer (P2P) lending, digital payments, blockchain and open APIs. One of the core tasks of the committee is to research and develop an open API platform.
In October 2018, Vietnam signed a Memorandum of Understandings (MoU) with Korea’s National IT Industry Promotion Agency (NIPA) and Korea Financial Telecommunications and Clearings Institute (KFTC) to develop a standardized Open API in the banking sector.
SBV’s Information Technology Department, Korea’s National IT Industry Promotion Agency (NIPA) and Korea Financial Telecommunications and Clearings Institute (KFTC) sign MoU on Open API in the banking sector, Photo: SBV
A year later, the SBV inked a partnership with the Australian Department of Foreign Affairs and Trade (DAFT), and the Asian Development Bank (ADB) to promote the development of fintech, including open APIs, and a related legal framework to aid in the adoption of a new method of banking.
Deputy Governor Dao Minh Tu of the SBV, on behalf of the SBV Governor, signs a MoU on the development of the financial sector and financial inclusion with the representatives from the Australian DFAT and ADB, Photo: SBV
The central bank is now in the process of revising existing regulation to create a complete framework for fintech and support digitalization in banking, SBV governor Le Minh Hung said in September 2020.
The regulator is currently cooperating with related government agencies in drafting a new decree on fintech regulation sandbox in the banking sector, Hung said.
In addition to that, it will be revising existing legislations to support banks and financial institutions applying new technologies including new guidance in cashless payment, the adoption of remote verification process (eKYC), and the revision of the Law on Prevention of Money Laundering, among others.
Compared to Singapore, Malaysia, the Philippines and Thailand, Vietnam is lagging behind when it comes to open banking.
In the Philippines, the central bank released in December 2020 the first version of the draft Circular on Open Finance, a proposed framework to implement open banking in the country.
Meanwhile, Singapore has adopted an organic approach to open banking with adoption being nevertheless facilitated by the Monetary Authority of Singapore (MAS).
Similarly to Singapore, Malaysia has taken a market-driven approach to open banking with a non-mandatory guideline framework for working with open data and open APIs.
In Thailand, open banking has been largely driven by banks themselves, but the introduction of the Personal Data Protection Act (PDPA) last year suggest a move to open banking frameworks could be imminent.

Featured image credit: Unsplash

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InsurTech
Vietnam

How COVID-19 Served as a Catalyst for Digital Insurance in Vietnam

									by Fintech News Vietnam
March 10, 2021

In Vietnam, COVID-19 has been a catalyst for digital transformation in the insurance sector, forcing incumbents to ramp up their digital capabilities and embrace technology.

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Post and Telecommunication Joint Stock Insurance Corporation (PTI), one of the Vietnam’s top three non-life insurance firms, has put digital transformation as one of its top strategic priorities.
In 2020, the firm invested heavily on upgrading its core information technology (IT) system, partnered up with tech startups and launched new digital products, including the PTI mobile app for motor vehicle insurance.

These developments came on the back of rapid growth in the online insurance market in 2020 which Hoang Thi Yen, director of PTI’s digital arm, estimates was “more than two digits.”
“The pandemic had negative effects on the overall growth of the insurance market, but also provided a growth opportunity for the online insurance market,” she told To Quoc in a recent Q&A.
“In 2021, Vietnam’s insurtech market will not see many breakthroughs because businesses are still in the process of building and investing to create the foundation for longer development. Since technology will be a long-term investment, in 2021, insurance companies will focus on product experience to make a difference in the market.”
Foreign insurtech startups eye Vietnamese market
Though Vietnam’s insurtech startup landscape is still small and nascent, it is developing rapidly, she said, noting that these young ventures could very well emerge as competitors to traditional insurance companies.
“In 2021, the race to apply technology to insurtech will still be fierce,” Hoang said. “Insurance companies must not only compete with each other, but also with insurance startups themselves. Shaking hands with these startups will also be a good choice for businesses to both promote their experience in insurance product deployment and take advantage of the technological advantages of insurtech companies.”
Vietnam’s insurance sector has grown steadily over the past years. This, coupled with a low penetration rate and emerging middle class, makes the country an attractive market for insurance businesses.
Total premiums collected by insurance companies reached about 160 trillion VND (US$5.4 billion) in 2020, up 20.5% from the previous year, but penetration remains low with just about 8.5% of the population having a life insurance policy, according to the Vietnam Insurance Association.
This promising market has led a number of foreign insurtech startups to expand to Vietnam.
Singapore-headquartered Igloo, a full-stack insurtech firm, launched in Vietnam last year after raising fresh funding.
Founder and CEO Wei Zhu has qualified Vietnam as “a massively growing market,” citing its high levels of digital penetration, a relatively young population and a fast-growing middle class as the key drivers for his firm’s decision to expand to the country. To date, Igloo has sold over 100 million policies in Singapore, the Philippines, Thailand, Vietnam and Indonesia.
In 2019, 9Lives, a startup from South Korea, launched in Vietnam where it inked a partnership with PTI. 9Lives provides a contextual and unbundled small ticket insurance platform, targeting middle-income customers.
9lives
PasarPolis, an Indonesian startup operating an online insurance comparison platform, recently closed a US$5 million funding round which it said it would use to strengthen its foothold in Southeast Asia, and most particularly in Vietnam and Thailand. Around 30 million users have purchased insurance through PasarPolis’ platform.
Vietnam’s nascent insurtech startup scene
In addition to foreign players, Vietnam’s insurtech sector also comprises a number of homegrown startups.
Papaya is perhaps one of the most notable names in the industry. The startup offers a one-stop shop for employee benefits and has secured contracts with two major insurance companies in the country: FWD and Bao Minh.
Papaya currently processes health insurance claims for 8,000 employees and has ambitions to become an ecosystem of healthcare and wellness options for company employees. It’s striving to bring the entire healthcare journey onto one platform, allowing customers to search for healthcare providers, pay medical bill, and manage their illnesses and wellness needs in one place.
Another Vietnamese insurtech startup is INSO. Founded in 2018, INSO provides a mobile app that allows customers to choose insurance packages based on their requirements and make claims. In addition to traditional products such as personal car insurance, health insurance, home insurance and property insurance, INSO also offers specialized insurance plans covering incidents like flight delay and goods return.

Miin, which focuses on microinsurance, launched its platform in 2019. Today, it serves more than 100,000 customers and has sold over 680,000 insurance packages. Miin provides health insurance, student insurance, and more.
INSO and Miin are both partnered with PTI.

Featured image credit: Edited from freepik (Background vector created by pikisuperstar – www.freepik.com) and Unsplash

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India
InsurTech

Insurtech Gets a Boost in India Amid Rising Digital Adoption

									by Fintech News Singapore
March 12, 2021

Fundamental shifts in consumer preferences, favorable regulation, and rising interest from investors are stimulating the growth of insurtech in India.
Results of a survey conducted by the Boston Consulting Group (BCG) and the Federation of Indian Chambers of Commerce and Industry (FICCI) found that 65% of general insurance customers in India had a digital footprint in the purchase journey, and 30% got influenced during the journey. The digital trend is expected to grow moving forward with 88% of Indian customers expressing willingness to purchase through digital channels.
Internet use in the last policy purchase process, Source: Consumer survey 2019, BCG analysis, via India Insurtech Landscape and Trends, BCG and the India Insurtech Association, Feb 2021
These findings come on the back of rising investors’ interest in the country’s insurtech sector, which continued to pour money into startups in the space despite COVID-19. Between 2016 and 2019, insurtech funding grew steadily at a three-year compound annual growth rate of 225% to reach US$376 million in 2019.
Equity funding in India’s insurtechs, Source: India Insurtech Landscape and Trends, Boston Consulting Group/India Insurtech Association, Feb 2021
Though in 2020, funding contracted in response to the global pandemic, signs of recovery were already visible in the second half of the year with considerable deals taking place including Turtlemint’s US$30 million financing round, and Plum’s US$4.1 million funding round.

2021 already saw notable developments in Indian insurtech space. In January 2021, the sector welcomed a new unicorn when Digit Insurance raised nearly US$100 million at a US$1.9 billion valuation.
On the regulatory front, the Union Budget 2021-2022 announced in February is proposing to enhance foreign direct investment (FDI) limits in the insurance sector from 49% to 74%, a move aimed at taking insurance to a larger sector of the Indian population. Industry players have welcomed the proposal, stating that this could help digital insurance companies scale up their businesses, bring in better technical know-how and innovation, and ultimately, improve insurance penetration.
Insurtech in India
India is home to about 100 insurtech companies, according to India’s Dynamic Insurtech Map by the India Insurtech Association and the Digital Insurer, among which unicorn startups PolicyBazaar (valued US$2.4 billion) and Digit Insurance. With two insurtech unicorns, India is neck and neck with China, but behind with the US with six insurtech unicorns.
India’s insurtech sector has historically been dominated by multi-insurance players including PolicyBazaar, an insurance aggregator, Coverfox, an insurance broking firm, and Renewbuy, a health and motor insurance specialist, but since 2018, the general insurance segment has recorded strong growth with players like Acko and Digit Insurance emerging as champions.
India’s Dynamic Insurtech Map, Source: India Insurtech Association, the Digital Insurer, Q4 2020
This trend is further evidenced by surging investment going towards general insurance companies. Funding to general insurance-focused insurtechs increased from a negligible share in 2014-2016 to almost 75% of the overall funding in 2020.
On the other hand, the health segment has seen relatively low traction so far, signaling an untapped opportunity for innovation in India.
Equity funding split by product lines, Source: India Insurtech Landscape and Trends, BCG and the India Insurtech Association, Feb 2021
Following global trends, India’s insurtech sector continues to mature, with the pace of late-stage investment and the number of US$10+ million funding rounds increasing considerably since 2014-2015.
Number of rounds by funding stage, Source: India Insurtech Landscape and Trends, BCG and the India Insurtech Association, Feb 2021

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India
Open Banking

India’s Open Banking Landscape Thrives on the Back of Digital Public Infrastructure

									by Fintech News Singapore
March 15, 2021

Pioneered by banking incumbents, India’s open banking ecosystem has grown to become part of the Indian financial landscape and is now among one of the most advanced in the world. The development of open banking in India has been facilitated by the digital public infrastructure put in place by the government.
Sameer Singh Jaini and Shashank Shekhar from Indian fintech consulting and advisory firm The Digital Fifth, identify five key layers in the India open banking ecosystem as: the banking layer, the technology layer enablers at banks, the third-party API layer, the customer layer, and the enabling layer.
Banks and non-banking financial companies make up the bottom layer of the ecosystem as they provide the APIs to perform services including payments, lending, and collections. This layer is powered and supported by technology stack partners such as API integrators and API gateway players, as well as data validation and analytics specialists.
The next layer comprises the creators and providers of new solutions around and/or leveraging open banking. These include neobanks, digital banks, and bigtechs that use bank APIs for their underlying operations as well as to provide customers with specialized and tailored services.

Finally, the enabling layer comprises the investors as well the digital public infrastructure used by banks themselves and financial services providers to onboard customer seamlessly and conduct business efficiently.
India’s Open Banking Ecosystem, The Digital Fifth, July 20
The India Stack as the foundation for open banking
Jurisdictions like the UK and Australia have adopted a regulatory-driven approach to open banking, while in countries including the US and Japan, open banking development has been driven by the market.
India on the other hand has opted for a hybrid approach where both the market and government take active roles in the ecosystem’s development. In particular, the development of the digital infrastructure known as the India Stack is often praised for being a key enabler of India’s booming open banking ecosystem.
The India Stack, an initiative introduced more than ten years ago, aims to create a unified software platform for governments, businesses, startups and developers. The initiative seeks to promote financial inclusion through increased access to financial services, improve the delivery of public services and benefits, and increase competition in the Indian financial sector.
Several APIs currently make up the India Stack. The Unified Payment Interface (UPI) is a system launched in 2016 that allows individuals to access their bank accounts from registered apps such as mobile wallets to make transactions to any other bank.
The UPI has been a major driver of accelerated payment digitalization in India, which, over the past five years has grown about 10.5 times to now constituting about 30% of retail transactions, according to a new report by Credit Suisse.
Share of digital transactions in India, Source: India Fintech Sector: A Guide to the Galaxy, Credit Suisse
The Aadhaar identification system is another key initiative by the government that has helped accelerate digital finance and open banking. Aadhaar is a 12-digit unique identity card launched by the government in 2010 to promote digital transformation. It can be used to digitally authenticated individuals for a variety of public and private services, enabling biometric checks to reliably verify the identity of the holder.
The Aadhaar system has been extended to enable electronic know-your-customer (eKYC), allowing banks to digitally onboard customers and drastically reduce operational costs of verifying the identity of customers.
Aadhaar is reportedly the world’s largest biometric identity system, crossing the 1.25 billion mark in 2019.
Other APIs available include eSign, an online electronic signature service to facilitate an Aadhaar holder to digitally sign a document, and DigiLocker, a digital locker facility for documents.
In September 2020, the government released a draft policy, titled the Data Empowerment and Protection Architecture (DEPA). The proposed framework aims to build a consent-based data sharing infrastructure to accelerate financial inclusion.
These systems are the four layers of the India Stack: the first is the “presenceless layer,” featuring the Aadhaar digital identity system; the second is the “cashless layer” built on the UPI system; the third is the “paperless layer” with eSign and DigiLocker; and the fourth is the “consent layer” that’s now being built.
India Stack, Source- Source: India Fintech Sector: A Guide to the Galaxy, Credit Suisse, Feb 2021

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InsurTech
Thailand

Insurtech Qoala Acquires Thai’s FairDee; Expands to Thailand

									by Fintech News Singapore
March 24, 2021

Qoala, an insurtech startup backed by the likes of Sequoia and MDI Ventures announced today the acquisition of FairDee, a Thai insurtech to expand their reach into the Thailand market.
Since its 2018 launch, Qoala said that it now processes over 2 million policies per month, with a diversified partnership portfolio serving core industries such as motor vehicle, health, life, travel, fintech, consumables, logistics, and employee benefits.

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Harshet Lunani
Founder and Chief Executive Officer (CEO) of Qoala, Harshet Lunani, says:
“FairDee and Qoala share the same vision in how insurance can be reimagined. Hence, we are doubling down on developing technology to deliver an excellent insurance experience to the community digitally in Thailand on the back of our strong SEA presence. With this acquisition, we are taking a big leap in the group’s regional ambition to be the number one insurtech in SEA. Given the shared vision and expertise that FairDee’s team has been able to cultivate since its inception, we are confident to continue to serve millions of underinsured in the region.”
Qoala partners with leading insurance companies such as Allianz, Zurich, Chubb, Great Eastern, Tokio Marine, and leading SEA digital platforms such as OYO and GrabKios, Traveloka, OVO, Dana, and Momo.

In the past 18 months, FairDee has grown its annual Gross Written Premium by seven times despite the pandemic under Yujun Chean, Prateek Jogani, and Thanasak Hoontrakul, co-founders of FairDee. The entire FairDee team will be joining Qoala to continue the pace of rapid growth in Thailand.
Yujun Chean
“We started FairDee to bring the best insurance experience to customers across the region. Being part of Qoala will greatly accelerate that vision, and together, we are more than excited to deliver further innovation in Thailand and beyond. Drawing upon Qoala’s regional expertise and support, we are committed to elevating our service quality to our partners and customers in Thailand,”
added Yujun Chean, Co-Founder and Chief Executive Officer (CEO) of FairDee.
In 2020, Qoala also expanded its regional footprint to Malaysia and Vietnam.

Featured image: Qoala Co-Founders Tommy Martin (left) and Harshet Lunani (right)

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State of Open Banking 2021: Indonesia

Indonesia
Open Banking

State of Open Banking 2021: Indonesia

									by Nadiva Aliyya Aryaputri
April 5, 2021

In this current era of digitalization and personalization, the concept of Open Banking has been rapidly disclosed among experts, and perhaps consumers. The term itself refers to a business model where data can be exchanged in order to be used for various inquiries inside the financial ecosystem.
According to fintecsystems, the starting point of Open Banking goes a long way back to the 1980s when online banking services were made available through dialing. In 2018, Open Banking legal framework was established within the EU’s Payment Services Directive 2 (PSD2). This regulation allows the creation of APIs that enables third-party providers (TPP) to request customers’ data retrieval.

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Although disclosed among experts, there are still few conversations about this initiative with bank institutions and other regulatory makers, including in Indonesia. While regulators in Indonesia have yet to establish any legal framework regarding the implementation in the country, initiatives from banking institutions, non-banking institutions, and regulatory parties are emerging up to the current year of 2021.
Developments of Regulatory
Open Banking regulations are driven by the sense of improving financial inclusion while also putting consumer data safety on top-of-mind. In Indonesia, regulatory bodies like Bank Indonesia (BI) and Otoritas Jasa Keuangan (OJK) had given their statements on how they would support non-banking institutions, such as fintech companies, to adopt Open Banking strategies by establishing the legal framework. This is led by how fintech and Open Banking innovations aid the country’s economy, especially when extraordinary circumstances like COVID-19 emerge. One of the examples is how online loans made through P2P lending platforms reached IDR 146.25 trillion back in November 2020 (Source: OJK).

In 2016, BI announced the construction of the Indonesia Payment Gateway System / Sistem Pembayaran Indonesia (SPI) and also its regulatory sandbox for fintech. In 2019, the blueprint for SPI 2025 was officially launched to the public. The blueprint has five initiatives and one of them includes how BI would support Open Banking implementation through Open API standardization. Open API standardization by BI will include the technical, security, and the governance side of things.
Another regulatory party, OJK, which is the authorized government party that regulates and supervises financial sectors, granted licenses to a total of 152 Indonesian P2P or fintech lending platforms as per December 2020. Alongside BI’s SPI 2025, OJK has just recently launched its Financial Sector Master Plan / Master Plan Sektor Jasa Keuangan 2021–2025 (MPSJKI) back in December 2020. One of the five main priorities of MPSJKI stated that OJK will support innovation and digital financial transformation, including Open Banking.
Additionally to data compliance, Indonesia’s Perlindungan Data Pribadi (PDP) issued by Ministry of Communications and Informatics (KOMINFO) back in 2016, has also regulate about data protection in context of data retrieval, collection, analysis, broadcasting and etc. for Penyelenggara Sistem Elektronik (PSE). PSE can refer to companies that provide gateway systems or called Open Banking enablers. Although not as specific as to regulate financial innovations like BI’s SPI or OJK’s MPSJKI, KOMINFO still serves as the main regulatory body for consumer data protection.
Market-Driven Initiatives
As the basis of why new regulations emerge in the country, market-driven initiatives from banks, fintech, and other non-regulator parties plays a major key role in the implementation of Open Banking. Moving from the year of 2015, adding from Accenture, Banks like BCA, BRI, BNI, Mandiri, Permata, CIMB Niaga, Bukopin, BTN, BTPN, and Panin Bank have started to give open access to their API for fintech companies to explore with. Most banking institutions have segmented their API products in certain categories for different use cases, such as account verification, payment initiation, real-time balances, historical transaction, and others.
Other than providing Open APIs, banks have collaborated with fintech through hackathons and accelerator programs. For example we have Finhacks from BCA, Sembrani Wira Program from BRI, and BnV Labs from Bukopin. The program itself anticipates the creation of new opportunities in financial services through enhanced collaborations between the said banks and fintech participants.
While on the banking side of initiatives, it would not feel fair if it does not complement what initiatives fintech has in store. One of the most mainstream use cases of Open Banking is within the payment gateway. Payment has been a major focus within the Open Banking strategies. Players like Midtrans, Xendit, Brankas enable the Open Banking — payment system to be adopted by merchants that use their services. On the other hand, players like Brick, born in 2019, focus on financial data APIs for data verifications and account aggregations. The existence of these fintech startups become a catalyst and a bridge for the implementation of Open Banking by providing other companies with services, like integrating key APIs.
Various use cases appear before one another throughout the time, as products rely on consumers’ demand. Different fintech verticals will most likely apprehend the Open Banking implementation based on their use cases. For example, P2P platforms would probably prefer to use it for reducing manual KYC collection by directly verifying user financial statements, while investing platforms would probably prefer direct payments API.
Looking Ahead: Opportunities for Growth
With the rise of consumers’ demand in regards to financial ecosystem digitalization, it is expected that the financial trends, like payment initiation, online loans, e-commerce utilization, and others will exponentially increase in terms of number of users and also transaction volume. For instance, BI recorded a 30.44% YoY growth for electronic money transactions in December 2020.
Banks and fintech are expected to accommodate these demands with key innovations, specifically in Open Banking and Open API, to maximize both business growth and financial inclusion in Indonesia. It is expected that the adoption of Open Banking and Open API enables more room for innovation between banks and fintech. The Open Banking model allows institutions to create a more personalized financial product amongst consumers. Along with it, regulating a standardized Open API system in Indonesia, which will be expected to launch by 2025, is a necessary step to create a safer and more massive adoption of these innovations.

Featured image: Photo by Afif Kusuma on Unsplash

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InsurTech

Insurtech Firm 360F Appoints Former Temenos APAC MD

									by Fintech News Singapore
April 14, 2021

Singapore-based insurtech 360F announced that it has appointed Martin Frick as a member of its advisory board, where he will support the ramp up of the bancassurance business.
Martin will be an advisor to 360F operating under the legal umbrella Amsantix.
Martin brings nearly 30 years of extensive industry knowledge, regional expertise and leadership experience in providing technological solutions to the financial services industry. His experience spans across both the developed and emerging countries in Asia Pacific.
Over the last decade, he has successfully spear-headed numerous large and complex projects in multiple financial services organisations in their journey to achieve competitive advantage through business and technology innovation.

Most recently Martin was the APAC Managing Director for the banking software firm Temenos.
The new appointment comes on the heels of the recent announcement of accelerating the growth of 360F with expansion plans to increase its presence in the region.
Michael Gerber
Michael Gerber, CEO of 360F said,
“We’re thrilled to have Martin’s commitment to help us drive our growth plans in Asia Pacific. Despite these challenging times, we remain committed to serving and transforming the financial services industry.

We continue to be dedicated to strengthening our relationships with existing clients and forging new ones, and we’re certain that Martin’s strong industry credential and track record in the financial services sector will be vital in achieving our target of building a 100m SGD business by 2025.”

Featured image: Martin Frick,member of its advisory board of 360F

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Regtech
Wealthtech

Julius Baer Rolls Out Digital Advisory Platform for Regtech Compliance in Asia

									by Fintech News Singapore
April 16, 2021

Julius Baer has rolled out its Digital Advisory Suite (DiAS) in Asia that aims to simplify the complexity of regulations for relationship managers, enabling them to offer compliant advice to clients.
The suite acts as a fully integrated solution, ensuring a seamless end-to-end advisory process, providing relationship managers with a holistic overview of client situations and identifying opportunities for engagement.
DiAS was designed to boost efficiency by navigating regulations, automating administration and saving time in delivering investment advice.
It screens Julius Baer’s investment universe and recommends investment ideas that meet clients’ investment objectives and risk appetite levels.

It goes beyond previous systems by blending machine learning algorithms with the precise requirements of relationship managers.
Nicolas de Skowronski
Nicolas de Skowronski, Co-Head of Investment and Wealth Management Solutions, Bank Julius Baer commented,
“At Julius Baer, we believe that it is paramount to leverage technology to innovate and constantly enhance our services. Julius Baer is one of very few international private banks to have all their major booking centres on one digital advisory platform.

To achieve such significant efficiency gains while still keeping the platform connected to our vast technology architecture, we needed a bespoke solution such as DiAS which was created from scratch by our teams across Zurich and Asia.”
Jimmy Lee
Jimmy Lee, Head Asia Pacific, Bank Julius Baer said,
“In light of changing market conditions and the evolving needs of clients in Asia, it is increasingly imperative for the financial industry to accelerate innovation and digital transformation.

Integrated digital advisory platforms such as DiAS will empower relationship managers to manage portfolios efficiently and serve our clients in the region with best-in-class advice and customised solutions. Julius Baer will continue to invest significantly in technology to help relationship managers strengthen personal connections with clients.”

Featured image credit: Edited from Unsplash

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Open Banking

Mambu: Significant Misunderstanding Hampers Open Banking Adoption

									by Fintech News Singapore
April 20, 2021

Most customers still don’t understand what open banking is and its benefits, a misunderstanding that’s hampering adoption, found a new survey by Mambu, a software-as-a-service (SaaS) banking platform provider.
Out of 2,000 global banking customers surveyed, more than half (52%) said they have never heard of open banking and 61% said they have never used it, despite a large majority of respondents (80%) using one or more mobile finance apps and overall caring about receiving better financial services.
57% respondents cited data sharing as their main concern, with 43% of respondents believing that open banking is a dangerous use of data sharing.
Part of the reason for customers’ lack of understanding and skepticism could be due to banks’ doings. 49% of banking customers surveyed feel their bank did not explain the benefits of open banking when introduced or provide reassurance on the safety of open banking.

24% feel their bank could have done a better job at explaining open banking, and noteworthily, 57% said they would be more likely to use it if their bank had more successfully implemented and promoted it.
Mambu infographic of its open banking survey, April 2021
Europe is leading the open banking change, but it’s now being rolled out across Asia Pacific (APAC) at differing speeds with countries including Australia and Singapore well ahead of the pack. In APAC, many customers are already using open banking without even knowing, but fear and doubt still remain.
Considering the potential of open banking in APAC when it comes to financial inclusion, it’s imperative that banks and financial institutions in the region clearly communicate the benefits with their customers and alleviate any fears they have, particularly around data security, Myles Bertrand, Mambu’s managing director for APAC, said in a statement.
In addition to the opportunity for open banking to bring convenient and cheaper financial services to the financially excluded, the benefits of open banking also align with new customer expectations. According to the Mambu survey, 52% of global banking customers want more control over their finances, and 40% said the pandemic has changed their attitudes to privacy, and 24% to data sharing.
Mambu infographic of its open banking survey, April 2021
When asked what customers want from open banking, they cited instant money transfers (48%), the ability to see different account balances (38%), help them boost their savings automatically (36%) and receive advice on money management (34%).
Results of Mambu’s global open banking consumer survey, Mambu open banking survey, April 2021
Compared to Europe, open banking in APAC is still at an earlier stage and has mainly been driven by market forces. But a relatively greater willingness by individuals in the region to share their data could see rapid growth in the coming months and years.
A 2019 survey by Accenture found that six in ten consumers in Singapore were willing to share significant personal information like income, location data and lifestyle information with their bank and insurer in exchange for more affordable and personalized banking products.
As many as 87% of consumers were open to sharing income, location and lifestyle habit data for rapid loan approval, and 80% were willing to do so for personalized offers based on their location, such as discounts from a retailer.

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Fintech Opinion Leader
Indonesia
Open Banking

The Future of Finance: How to Cope With Open Banking In Emerging Asia

									by Kaspar Situmorang
April 22, 2021

For more than a decade, Asia has been the largest regional banking market and as the continent’s massive middle class continues to grow, McKinsey expects personal financial assets in the region to reach US$69 trillion by 2025, or 75% of the global total.
However, in recent years, traditional banks have been disrupted or have faced stiff competition from fintech startups — be they pure-play digital banks or e-commerce platforms offering quasi-banking services. These players have catered to largely ignored, low-margin, high-risk customer bases, namely those in rural areas of emerging markets.

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Despite the significant growth in Asia’s banked population, a third of the world’s 1.7 billion unbanked people live in just four Asian countries: China, India, Pakistan, and Indonesia.
Often left to state-owned financiers or developmental banks due to smaller margins, increased hand-holding, and issues assessing creditworthiness, these customer groups have been targeted by innovative fintech brands offering tailored products such as P2P lending, crowdfunding, and for micro enterprises on e-marketplaces, invoice financing.

Examining the Asian digital banking scene
A 2020 Working Paper by the Consultative Group to Assist the Poor examined three case studies of digital banking across emerging Asia, revealing some common features. The successful ones tend to:

Leverage data analytics to better understand target customers
Develop affordable products tailored to customer needs
Offer streamlined digital on-boarding processes
Blend offline and online customer engagement

The final feature above is worth highlighting for its relevance to Indonesia, an archipelago nation where even e-commerce unicorns like Tokopedia and Grab have invested heavily in online-to-offline solutions that cater to customers in rural areas.
According to a 2019 survey by the local Financial Services Authority, Indonesia’s financial inclusion rate stood at 76%, marking an increase of some 40 million unbanked adults from 2017, when the rate was nearly 50%.
One path traditional banks can take without reinventing the digital wheel is open banking, a concept centered around the sharing of bank data with third parties, with the goal of opening up the banking industry and encouraging innovation.
Emerging Payments Association Asia
Exploring the concept of open banking
If you’re still fuzzy on what open banking is, here’s an easy way to wrap your head around the concept: You’ve just picked out a new laptop on your favorite e-marketplace. It’s time to check out and make payment. When doing so, you notice that you’re able to apply for a bank loan directly through the site. In fact, the whale process is integrated. There must be some sort of technical cooperation between the site and the bank itself. This is one example of open banking.
Through application programming interfaces (APIs), customer data is shared securely and seamlessly between banks and third parties which enables the creation of new apps and services. These apps can be plugged into banks’ own systems to offer new or improved services to their customers, or non-bank services that require customers’ banking data.
Allied Market Research figures put the global open banking market at US$7.3 billion in 2018, and this is expected to balloon to US$43.2 billion by 2026 at a CAGR of 24.4%.
Key drivers of open banking
Two key financial services will drive this growth: banking and capital markets products, as well as payments. In terms of distribution, the app market far outpaces other channels.
Not only is open banking a cheaper alternative to doing everything in-house, it is also a more effective way to reach customers and collate richer, more in-depth data via partnerships with apps.
For decades, traditional banks have been seen as having “moats,” protection against the threat of new competitors or substitute products. Historically, these have been things like making it hard or expensive for the customer to switch products, or just creating and relying on economies of scale.
But today, the massive scale and market shares that traditional banks have long enjoyed no longer represent durable moats in the long term. Neither do difficult, complicated, and opaque customer onboarding experiences. Fintech brands are offering easy, seamless experiences for customers looking to open accounts, make payments, and get loans.
Nonetheless, traditional banks still have the upper hand, with years of brand name recognition among customers and access to rural areas via brick-and-mortar branches and other networks. Via open banking, banks can lend their know-your-customer expertise to third parties, while gaining access to a richer level of customer data across different apps (e.g. spending behavior and transaction volumes).
The Emerging Payments Association Asia suggests three key elements for successful open banking: open APIs, fintech ecosystem, and adoption of new technologies.
Open APIs are simply APIs that are made publicly available for developers to use and connect to their platforms, or build products from. The public nature of open APIs helps improve interoperability of new apps and services — allowing more developers to build products and more customers to access services backed by the same APIs, while giving banks easy consolidation of customer data.
Emerging Payments Association Asia
A healthy fintech ecosystem of consumers, financial institutions, and regulators can benefit from lower costs and improved products via open banking. Open banking offers a competitive and innovative environment through the transfer of consumer data.
With developers constantly innovating products with open APIs, banks will be introduced to new technologies, which they can in turn can leverage to create better products and services.
Traditional banks and stakeholders must build out their own open banking initiatives — or form strategic alliances — if they don’t want their lunches eaten by new fintech startups.
Digital transformation is no longer a ‘maybe’ proposition. It is a ‘must.’ It’s a defensive move to avoid being left behind in the open finance arena. Banks that embrace open banking while protecting customer privacy and data stand a decent shot of building digital moats.

Featured image credit: Unsplash

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Fintech Opinion Leader
InsurTech

Why Consumers Should Not Rely Blindly on Financial Consultants for Their Financial Planning

									by Michael Gerber
April 30, 2021

The layman customer is extremely reliant on the financial consultant. The recent proliferation of simplified consumer-facing tools has helped many understand their financial gaps to a fair degree. However, when it comes down to creating a plan to close those gaps, the customer remains poorly informed about his options.
The financial consultant who is held to the suitability standards is obligated to make a recommendation with reasonable basis, but not required to demonstrate that it is indeed the best possible. Another consultant held to the higher fiduciary standards is obligated to put the customer’s interest before his own, but the customer is subject to the consultant’s best knowledge.
The financial consultant’s advice is only as good as his means
Photo by energepic.com from Pexels
Be it suitability or fiduciary standards, the financial consultant’s advice is as good as his means. Even if his means is suboptimal, in the land of the blind, he is still the king, albeit being one-eyed.
When customers are blindly reliant on their financial consultants, the industry stagnates. Regulations such as best interests duty and fiduciary rule keep the financial consultants’ integrity in check so that customers can trust the industry readily. However, over time, customers grow to rely on the regulatory protection so much that they become unmotivated to explore options and challenge their consultants.

The reliance deepens especially in a market where there is a myriad of products that can serve the same financial objective, but product complexities make it difficult for the layman to do a contextualized comparison independently.
When things go awry, such as an unprecedented market crisis that rocks the customer’s portfolio, an over-dependent customer is quick to point fingers at the consultant. It is therefore inevitable that financial consultants stick to cookie-cutter recommendations that fulfil the compliance requirements without hassle, but which are only as good as the list requires.
For example, the customer looking to close his retirement gap could be recommended an annuity product manufactured exclusively for the retirement objective or, on the same budget, a solution that complements the annuity product with some investment funds.
The former recommendation is easier to explain while the latter requires a strategy to be discussed and understood, as well as extensive post-sales servicing. Most financial consultants would choose to give the former recommendation – one that checks the compliance list easily but may not fund longevity as well as the latter.
The industry has therefore not been able to shift from product centricity to solutioning, incurring consequences which amongst them, the perennial and concurrent protection and retirement gaps.
Occasionally financial consultants may come across prosumers who want to engage in an exploratory and technical discussion. To stay on the safe side of the law, consultants prefer to minimize their own input and execute whatever their customers want, with all disclaimer boxes ticked. Under such circumstances, prosumers see little value in having financial consultants and choose to plan and execute independently.
Empowering customers to know their options
What the industry needs is a critical mess of prosumers such that financial consultants and their principles are compelled to level up their game or risk irrelevance. Empowering the customers goes beyond giving them simple financial calculators that identify gaps. Instead, customers should get to know their options before entering a conversation with their financial consultants.
Industry veterans who believe that insurance is ‘sold, not bought’ would argue that motivating the customers to self-explore without the financial consultant’s nudge is an exercise in futility. However, a generational change is in the air. 360F recently collaborated with an online life insurance platform to study the present consumers’ understanding towards insurance.
It was found that those between 18 and 30 years old are more aware of their existing life coverage than their older peers. In fact, compared to the older generations, the young adults tend to want higher insurance protection coverage. A supporting theory is that the young adults’ parents had been nudged by financial consultants to purchase insurance and the lessons passed down the generation. Whatever the reason might be, the implication is clear: the generation that has just started their economic lives have the willingness to learn about their options.
To help customers understand their options without bias, we need to make technology the facilitator. Analogous to how Google Maps can give us recommended routes before we take a stranger’s car, 360F automates suggested solutioning to help the customers grasp the possibilities and more important, to have a reliable and valid reference benchmark.
As a neutral facilitator, 360F’s technology is carrier-agnostic. Given any insurance and/or investment product universe, 360F algorithms will seek for the “best possible” solutioning design to fulfil the customer’s set of prioritized criteria in the context of constraints and everyday life probabilities.
To validate that the solutioning is indeed the best possible, 360F innovates a transparent and objective feedback mechanism in the form of a simulation metric, HappiU. This metric evaluates the customer’s holdings and portfolio, with and without the new solutioning suggestion, relative to his circumstances, values and aspirations.
It not only helps the layman to assess overall financial satisfaction but also makes contextualized product comparison a breeze. In other words, the HappiU metric is pivotal to making buyer empowerment a credible reality.
The one-eyed king can lead the blind, but it takes intelligent technology to empower the people to see. Only then can the financial advisory industry advance and raise the bar for all parties.

Featured image credit: Photo by Scott Graham on Unsplash

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E-wallets
Indonesia
InsurTech

OVO Ties up With Prudential Indonesia to Offer Shariah-Compliant Digital Life Insurance

									by Fintech News Indonesia
April 28, 2021

Indonesian e-wallet unicorn OVO has expanded its partnership with Prudential Indonesia to launch a digital shariah life insurance product with affordable premiums.
The Asuransi Jiwa Kumpulan Syariah PRUTect Care product is provided by Prudential Indonesia through insurance broker PT Salvus Inti and can be accessed through OVO’s app.

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It is designed to offer users a highly affordable, highly accessible, shariah-compliant life insurance product.
This arrangement gives Prudential Indonesia access to OVO’s large user base nationwide, spanning all of Indonesia’s 34 provinces.

Users have a choice of monthly or yearly contribution payment schemes, starting from around IDR 5,000 (US$0.34) per month.
The product provides basic death-benefit and other preferred protections, such as daily hospital cash (non-ICU-Intensive Care Unit), daily hospital cash (ICU), permanent disability due to total accident benefit, death benefit due to infectious diseases and death benefit due to accident.
In 2019, Prudential Indonesia established a long-term partnership with OVO to expand access to life insurance for the Indonesians.
In early 2020, OVO and Prudential Indonesia collaborated to provide premium-free accident and COVID-19 life insurance to help Indonesians at the onset of the COVID-19 pandemic.
Approximately 222,000 individuals registered through the OVO platform during the programme period, which ran until 31 May 2020.
Jason Thompson
Jason Thompson, CEO of OVO said,
“This launch marks OVO’s entry in the life insurance and sharia insurance space.

By combining OVO’s strong digital reach and capabilities together with Prudential Indonesia’s expertise in insurance, we can make sharia life insurance affordable and easily accessible for Indonesians all over the country, enabling them to protect themselves and their loved ones amid the country’s low penetration rates.”
Jens Reisch, President Director of Prudential Indonesia said,
Jens Reisch
“The launch of PRUTect Care – Hospital Cash Insurance reflects Prudential’s and OVO’s joint vision to create a healthier and more prosperous society, as well as our commitment to providing affordable and easily accessible life protection products amidst low insurance penetration and financial literacy in Indonesia.

The realisation of our strategic partnership with OVO through PRUTect Care – Hospital Cash will enable Prudential Indonesia to reach more users, meet their continuously evolving needs for protection, and help them to get the best out of life,”

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Indonesia
Open Banking

Payments Firm 2C2P Partners Brankas to Bring Open Banking to Indonesia

									by Fintech News Indonesia
April 28, 2021

Brankas, an Indonesian open banking provider, announced a strategic partnership with payments firm 2C2P to introduce their modern open banking solution to Indonesia.
Through Brankas‘ API integration, customers of 2C2P’s merchants will be directly connected to major Indonesian banks including Bank Central Asia (BCA), Bank Mandiri, Bank Negara Indonesia and Bank Rakyat Indonesia.

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Built on the principles of open banking, the partnership allows Indonesian businesses to offer customers a direct debit option during the checkout process to make payments from their personal banking accounts with the afore-mentioned banks immediately.
Since the payment is authenticated directly between the consumer and the bank, merchants can avoid higher transaction costs, and chargebacks generated due to fraud or an inability to capture funds.

The partnership extends the reach of 2C2P’s Direct Debit payment feature, enabling merchants to offer their Indonesian customers a seamless, secure and faster payment option.
Currently available in Indonesia, Brankas and 2C2P aim to bring these benefits to consumers and merchants in other markets in the region.
Todd Schweitzer
Todd Schweitzer  CEO of Brankas said,
“Both Brankas and 2C2P share a vision to simplify payments technology and provide new digital experiences for Southeast Asian merchants and consumers.

Together, we can accelerate Open Banking, increase access, and empower the next generation of Southeast Asian entrepreneurs.”
Agnes Chua
Agnes Chua, Director, Business and Product Development, 2C2P said,
“We are excited to work with Brankas and harness the potential of their open banking API service through our Direct Debit payment feature.

Open collaboration is key to the development of new and innovative payment solutions that will equip our merchants with the tools to unlock greater efficiency and drive business growth.”

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Regtech

BearingPoint Expands Regtech Solution to Help Firms Comply With Latest MAS Module

									by Fintech News Singapore
May 6, 2021

BearingPoint RegTech, a Netherlands-based regtech solution provider, has further expanded its end-to-end solution ABACUS/Transactions with a new MAS module.
The MAS module helps firms comply with their derivative reporting requirements imposed by the Monetary Authority of Singapore (MAS) and digitalise their reporting processes for the submission to the trade repository DTCC.
The reporting obligations are set out in both the Securities and Futures Act and in the Securities and Futures (Reporting of Derivatives Contracts) Regulations 2013 by the MAS.
The regulation applies to over-the-counter (OTC) derivatives such as interest rate, credit, foreign exchange, commodity, and equity derivative contracts traded or booked in Singapore.

Starting from October 1, 2021, local financial institutions and insurers as well as subsidiaries of international companies in Singapore enter the next reporting phase according to the Second Schedule of the regulation and must report the asset classes FX, equity and commodities.
Banks, merchant banks, and other companies dealing with the asset classes interest rate and credits are already in the productive reporting phase.
The mandatory reports must be submitted daily to a designated trade repository (currently DTCC) within two business days of the transaction.
ABACUS/Transactions offers a wide range of business logics and functionalities such as data enrichments, eligibility checks for each reporting regime, consistency and validation checks, calculations including an enhanced lifecycle management process, and the generation of valid reporting files and sophisticated feedback loops.
Full end-to-end robotic process automation (RPA) of the aforementioned functionalities facilitates fast and automated high-quality reporting. The solution has an integrated and easy-to-handle user interface to control reporting and manual interactions.
It is available on-premise or as part of the cloud-based RegTech Factory offering.
Alexander Becht
Alexander Becht, Product Manager for ABACUS/Transactions at BearingPoint RegTech said,
“We have further extended the scope of our state-of-the-art solution ABACUS/Transactions by adding the MAS module in time for the start of the second reporting phase in October 2021.

The expansion to the Singapore market supports our product vision to provide a global platform for transaction reporting and strengthens our strong market position as a leading global provider of regulatory technology.”
Bella Lai
Bella Lai, Head of RegTech APAC at BearingPoint RegTech Singapore added,
“With the amended Singapore’s Securities and Futures (Reporting of Derivatives Contracts) Regulations 2013, the Second Schedule Regulations 2020 requires financial institutions to comply with October 2021 reporting requirements on foreign exchange, equity and commodity derivatives contracts.

With our new MAS module, we offer financial institutions the opportunity to fulfill their derivatives reporting obligations to MAS. This will help affected firms improve their data quality, streamline their reporting processes and avoid costly regulatory fines.”

Featured image credit: Edited from Unsplash

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InsurTech
Wealthtech

Robo Advisor StashAway Expands Its Product Line With New Life Insurance Offering

									by Fintech News Singapore
May 17, 2021

Southeast Asian digital wealth manager StashAway has launched a group term life insurance policy underwritten by Prudential Singapore named StashAway Term Life.
StashAway Term Life is a fully digital offering available on its app to Singapore residents where application for coverage reportedly takes only a few minutes, with no in-person medical check required.
Customers can get a personalised recommendation for how much coverage they need, and then apply for coverage ranging from S$100,000 to S$500,000 by answering several health-related questions.
StashAway Term Life is a yearly renewable policy designed to give clients a flexible insurance option. Those insured can renew their plans every year as long as they reside in Singapore.

Michele Ferrario
Michele Ferrario, Co-founder and CEO of StashAway said,
“Our goal from the time we first launched our services in 2017 was to provide affordable, transparent, and straightforward financial products.

The addition of StashAway Term Life is one more way we’re doing that, with a simplified digital journey to purchase life insurance.”
Amanda Ong
Amanda Ong, Country Manager of StashAway Singapore said,
“Although it’s convenient to lump investments and cash into an insurance policy, the higher premiums for whole life insurance and ILPs aren’t usually worth the extra cost.

From a cost perspective, you’re better off buying term insurance and investing your savings in a separate investment product, or as they say, ‘Buy term and invest the rest’.”

Featured image: From Left – Nino Ulsamer, CTO and Co-Founder of StashAway, Michele Ferrario, Co-founder and CEO of StashAway, Freddy Lim, CEO and Co-Founder of StashAway

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Open Banking
Remittance

Wise Goes Live on Temenos for Transparent, Real-Time Remittance to Banks Worldwide

									by Fintech News Singapore
May 19, 2021

Swiss banking software company Temenos announced that Wise, a London-based online money transfer service formerly known as TransferWise, is now live on Temenos MarketPlace.
The Temenos MarketPlace comprises over 50 curated fintech solutions, enabling Temenos’ clients to innovate and differentiate quickly.
The addition of Wise Platform, which is its infrastructural solution for banks, enables Temenos customers to quickly and easily switch on Wise’ trusted cross-border payments within their digital banking platform.
Temenos customers will have seamless access to Wise’ technology through Temenos Infinity digital banking platform and Temenos Transact next-generation core banking product.

The Wise solution is pre-integrated for rapid implementation and time-to-value.
Adding Wise to their digital platform, financial institutions can offer a convenient, fast and transparent international money transfer experience to attract and retain retail and business customers.
Wise enables payments to 80 countries around the world where 38% of all global transfers are reportedly delivered under 20 seconds.
Stuart Gregory
Stuart Gregory, MD, Wise Platform and Wise Business said,
“We share Temenos’ ambition to modernize the international financial system. Though an email today travels around the world in a matter of seconds, for virtually nothing, moving money internationally is still incredibly slow and expensive.

We want to change this status quo and make moving money as fast, quick and affordable as sending an email. Joining the Temenos MarketPlace brings us one step closer to achieving this mission. We are thrilled to be joining Temenos in building better experiences for banks, financial institutions and their customers.”
Martin Bailey
Martin Bailey, Product Director, Temenos said,
“Together with Wise, we are making banking better. Wise brings a truly borderless experience to international banking and payments.

We’re thrilled to offer Wise Platform on Temenos MarketPlace so that our clients can leverage Wise’s unique network and infrastructure to ultimately offer faster, fairer international banking experiences to their customers.”

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InsurTech

Aviva Singlife Appoints DBS Exec as Group CEO Following S$3.2 Billion Merger Deal

									by Fintech News Singapore
May 25, 2021

Insurer Aviva Singlife announced that it has appointed former DBS’ senior exec Pearlyn Phau as its Executive Director and Group Chief Executive Officer following its S$3.2 billion merger deal.
The merger transaction between Singlife and Aviva is said to be one of the region’s largest insurance deals and the largest in Singapore. The scheme of transfer which will combine the two entities, has been approved by the MAS. It is now subject to the approval of Singapore courts and is expected to complete later this year.
Pearlyn’s appointment as Group CEO will be effective on 18 August 2021 and is subject to regulatory approval.
A veteran in the financial services industry, Pearlyn has held various senior leadership roles within DBS Group, both in Singapore and Hong Kong. She is currently its Group Head of Consumer Products, Marketing and Ecosystem Partnerships with oversight across the product lines in the region and a mandate to scale growth exponentially via strategic partnerships.

Prior to this, Pearlyn was the Deputy Group Head of Consumer Banking and Wealth Management and has also spent 4 years in Hong Kong as the Head of Consumer Banking and Wealth Management, DBS Bank Hong Kong.
Pearlyn has an exceptional track record of executing key strategies and business transformation initiatives across regional retail and wealth franchises, including being a key driver of emerging digital banking strategies. She was also instrumental in the negotiation, construction, management and delivery of DBS’ principal bancassurance partnerships and has built a deep network within the wider insurance community in Singapore and the region.
Following Pearlyn’s appointment in August, Nishit Majmudar, currently Chief Executive Officer of Aviva Singapore, will step down from his executive and Board roles and become a Senior Advisor to the Board.
Meanwhile, Walter de Oude, who has acted as Group Chief Executive Officer prior to Pearlyn’s appointment, will continue on the Board as Deputy Chairman, Aviva Singlife Holdings.
Pearlyn Phau
Pearlyn Phau said,
“The powerful Aviva Singlife combination, harnessing the best that Singlife brings in technology and Aviva Singapore in quality advice, alongside the Board’s vision and commitment to see a new breed of financial services emerge in this unique and challenging time, presents a compelling opportunity for me.

I am delighted to have been entrusted with this exciting role and look forward to delivering on that vision for the benefit of Singaporeans and the region.”
Walter de Oude
Walter de Oude, Deputy Chairman, Aviva Singlife Holdings said,
“The Singlife and Aviva businesses have demonstrated phenomenal growth over the past years.

Now as we bring them together, Pearlyn is the catalyst for our new era – one where we push for new heights to further the ambition of the Group, and continue to challenge the industry in its evolution, both in Singapore and beyond.”

Featured image: Pearlyn Phau

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