There is no doubt that our species face an existential crisis in the 21^st century. Climate change effects are accelerating around the world, affecting billions of lives and exacerbating existing inequalities. The migration crisis, pandemics, famines, political instability – the list of symptoms is quite long indeed.

Governments, businesses, and most important of all, billions of people around the world realise the need for a change in the status quo. And millennials and the younger generations, whose future is at stake, are starting to demand more action.

This change in attitude is also reflected in the realm of investing – there are many “buzzwords” in the mainstream media to reflect this zeitgeist of ‘do good’ investing. They include terms such as impact investing, ESG investing, and SRI/ethical investing.

While they may share a common desire for “change,” there are significant differences, some subtle, others quite drastic. In this article, I hope to shed some light on these differences and provide you with a better understanding of impact investing, and its position in the evolving world of investments.

The basic features of impact investing

The Global Impact Investing Network (GIIN) defines impact investing as – “investments made with the intention to generate positive, measurable social and environmental impact alongside a financial return.”

Impact investing has four defining characteristics:

• Intentionality – the investor must have a clear intention to create positive change in society/environment
• The expectation of returns – the investments should be capable of generating a financial return on capital, or at the very least, a return of capital.
• A wide spectrum – investments can be in any asset class – VC, private equity, fixed income, cash equivalents or others, with targeted returns that range from below market to risk-adjusted.
• Impact measurement – the investor should be committed to transparency and accountability, in measuring and reporting the actual positive impact generated by the investment.

As a result, impact investing is more exacting and has a tighter focus – instead of looking at larger corporations, its focus is often on smaller projects and startups with transformative potential in specific locales and communities.

Also Read: Why is impact investing suddenly so hot?

What makes impact investing differs from philanthropy is its expectation of financial returns on top of creating positive social/environment impact, whereas philanthropy focuses on the latter with no expectation of financial returns.

At first glance, impact investing may even seem like taking on the role of public services or NGO, which makes one wonders if it brings any distinguishable benefit? The answer is yes and it lies on self-sustainability and efficiencies.

The operating model of public enterprises and NGO are not created to be financially self-sustainable – they rely on continued financial supports from government findings and ultimately taxpayers monies to support its philanthropic causes.

For the case of efficiencies, it is widely known that the public sectors do not share the same level of efficiencies compared to a business enterprise. In part this is due to incentive structure – businesses have an incentive to be efficient because increased efficiency means greater profitability for the businesses which then leads to greater compensation for the mangers.

Impact investing, on the other hand, is based on a model that fits economic reality as allows the invested enterprises to be financially self-sustainable and profitable, while bringing positive impact to its desired causes with businesslike efficiencies.

Impact investing v/s traditional investing

In traditional investing, there is only one prime motive – generating positive financial returns, no matter the negative externalities. If a stock is profitable, you invest in it regardless of its impact on society or the environment. The sole purpose of the company looking though the lens of traditional investing is to maximise shareholder value.

Impact investments are also expected to generate positive financial returns – they are not philanthropic investments. But unlike the traditional model, impact investing plays a huge emphasis on generating positive change in society/environment alongside a financial return.

Also Read: [Update] Denmark’s 3B Ventures launches new US$60M fund for impact investing

Impact investing v/s socially responsible investing (SRI)

Also called ethical investing, SRI arose primarily in the 1950s and 1960s. It is based on the idea that some businesses can have an overtly harmful impact on people and society and should be avoided. Investors avoid such “sin stocks” – alcohol, tobacco, gambling, weapon manufacturers, and others – on religious, moral, or political grounds.

Both SRI and Impact Investing share a desire to generate positive ROI, but beyond that, the intentions are quite different. In SRI, the investor desire is to avoid supporting companies or industries that pose harm to people, society, or the environment. There is no intention or attempt to proactively induce a positive change, which is a core tenet in impact investing.

Understanding the basics of ESG investing

ESG, which stands for Environmental, Social, and Governance, gained credence in the early 2000s as a buzz-word in the investing world, particularly after the publication of “Who Cares Wins” in 2004 by the UN Global Compact. Global Sustainable Investment Alliance (GSIA) and The Forum for Sustainable and Responsible Investment (US SIF) are the main proponents of ESG. Funds that follow and integrate broad ESG principles to some extent are valued at over US$45 trillion by JP Morgan in 2020.

ESG shares the basic rationale behind SRI – avoiding certain stocks due to their negative repercussions for society/environment. What ESG does differently is in redefining the perception of “risk” to include other factors besides financial risk. For example, an oil spill or chemical leak would be an environmental risk. Racial discrimination, gender inequality, and pay gaps would fall under governance risk.

All these factors have the potential to create negative PR and drive down the value of the company in the stock market. Integration of ESG ratings allows investors to make an educated choice when selecting stocks – avoiding high-risk ESG stocks, opting for stocks that either has a low risk or even rewarding companies that actively try to improve their ESG issues.

Impact investing v/s ESG investing

ESG does have the potential to create a positive impact on the environment and society. As more investors incorporate ESG risk factors into their portfolios, companies are incentivised to address these issues.

But it is also plagued by a lack of clarity and precision – there is no single unified ESG rating system. There are multiple agencies like Vigeo Eiris, Oekom, and MSCI – they all have their leanings towards Environment, Governance, or Social end of the spectrum.

Also Read: Ecosystem Roundup: UOB’s VC firm makes 1st close of its impact fund at US$60M; Indonesian startups raise US$1.9B by Q3 2020

And to make things worse, there is no established reporting paradigm for companies to follow. For instance, it is completely voluntary for companies in the US to make ESG disclosures. When the ratings are based on inadequate data, it also significantly reduces the chance for the positive impact that an ESG investment can have.

Impact investing fares somewhat better in this aspect. Since ESG factors are imprecise/vague, Impact Investing is closely aligned with the UN Sustainable Development Goals (SDGs). Investments are channelled towards initiatives that have clear potential in contributing towards SDGs.

Reporting is still a challenge, as the business world is still in the early days of creating universally accepted tools for measuring the non-financial impact of investments. But as reported by Harvard Business Review, new metrics like Social ROI and Impact Multiple of Money (IMM) have shown a lot of promise.

But the main thing that sets impact investing apart from ESG is the intentionality – there is a desire for proactive action to generate change through impact investments. This is lacking in ESG, which is still based on the avoidance principle.

Currently, the size and scale of ESG market dwarfs impact investing by a huge margin at US$45 trillion and US$715 billion, respectively. This is understandable, given the tighter focus of impact investing – far fewer stocks would be in a position to fulfill its requirement criteria.

Both have their limitations, but are also vital in the quest for a sustainable future. There is abundant space for the growth of both these forms of investing, particularly in Asia, home to nearly 60% of the human population.

It is already a global hotspot for impact investing with a CAGR of 23% between 2015 and 2019 (second only to Europe at 25%), according to GIIN. ESG investments are also on the uptick among fund managers in the region, a knock-on effect of strong performances in Europe and North America.

With the ongoing crises and increasing public awareness, I would expect both impact investment and ESG investment will have a massive role to play in the coming years, but in their own unique ways.

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The United States Agency for International Development (USAID) and RTI International, through its partner Villgro Philippines, has named the winners of a virtual hackathon to find new solutions to long-standing family planning (FP) and teen pregnancy challenges.

The winning team Aster Alliance was awarded PHP1.5 million (US$31,200) in award subsidy while runner-up teams Yaka.ph and Edukasyon.ph received PHP750,000 (US$15,600) each.

Twenty-one participating teams went through the various stages of design thinking to ideate and create prototype solutions. Over the course of 48 hours, the teams took turns meeting 20 innovation mentors, refining their ideas, and developing their pitch to win.

“Teenage pregnancy rate in the Philippines remains high and the pandemic has made it more difficult for Filipino women and girls to access FP information, commodities, and services. This is a great time to create new, innovative solutions to address these issues,” said USAID/Philippines Office of Health Director Michelle Lang-Alli in her event opening message.

Also Read: Meet the 10 startups selected for Habitat for Humanity’s ShelterTech accelerator

Aster Alliance, formed by four engineering students from the University of the Philippines, is a direct-to-consumer adolescent and youth reproductive health platform that enabled smarter family planning.

Yaka.ph is a unified platform for reproductive health tracking, online counselling and prescription deliveries, while Edukasyon.ph utilises a personalised Artificial Intelligence chatbot and study materials to address the lack of sexual and reproductive health education among youths.

In addition to closing a Series A funding round, Edukasyon.ph has recently named Grace David as its new CEO.

The winners will receive three months of incubation support from Villgro Philippines to help develop the innovations and connect with partners who can lend further support.

“We were thrilled by the innovations we witnessed unfold during the Innovation Challenge hackathon. We look forward to working with the winners to further refine and develop their solutions over the next three months,” said Priya Thachadi, Co-founder & CEO of Villgro Philippines.

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Image Credit: Joey Pilgrim on Unsplash

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If there’s one major impact that the pandemic has brought in 2020, it is how people communicate. With reduced opportunities to physically interact with each other, people have started utilising tech in work like never before. From Zoom meetings to virtual coffee to online conferences, the list goes on.

Since communication is such an important part of my role as a writer in e27, a large portion of my year went towards experimenting with strategies to network effectively with people.

In the process, I discovered that I was suffering from an illness widely known as the Zoom fatigue.

This is characterised by periods of exhaustion as a result of meetings lined up on one’s Google Calendar. I think we can all safely say that we have been a victim to that at least once during 2020.

While some may argue that vaccines have started to roll out, and with that, mankind has found a way out of virtual meetings, chances are high that the new working normal will likely continue throughout 2021.

I say this because tech giants such as Twitter, Google and Facebook have already announced the continuation of their work from home policies to the next year, and many other companies are likely to follow their lead. Also, many nations are yet to figure out a way to roll out the vaccine extensively.

Also Read: Work from home risks every employer needs to be aware of

While initially, I was experiencing moments of mental explosion by hopping on two-to-three calls a day as I had to finish cooking my meal on the side and take my dog out for a walk, I have truly started embracing the process now.

Here are four tips to improve your virtual networking experience:

1. Creating your own “power spot”

This is something that I learnt from Japanese author and lifestyle guru Marie Kondo in her book Joy at Work which I personally found to be very effective.

Kondo encourages working professionals to have their own “power spot” which consists of items that they love –-a personal space that is aimed to bring a joyous vibe.

For example, if someone loves plants, they can create a spot in their home filled with greenery. The very fact that the spot is filled with everything that one deeply loves can automatically be therapeutic in nature.

In my case, I attempt to fill my power spot with music. Keyboard and speakers in the room helps me unwind and relax my mind after every short meeting.

2. Making a good virtual impression

Remember how you used to dress up smart for any networking events so that you make a good impression? That rule still applies during virtual video calls with people.

Also Read: This is the only work from home advice that you need to read

As we near the end of 2020, the bar has been raised and people are now investing in professional setups for their video engagements to make a good impression.

To avoid making a bad impression during a virtual networking session that includes a shoddy background, dark lighting and cluttered background, one can always invest in low-cost products to build a great first impression with your virtual network.

Some of the things you can use: a selfie ring (for brightness), a plain white background and Krisp.ai for effectively cancelling the noise around you.

3. Keep it short

Making small talk is out while brief and focussed conversations are in.

Since people have more fixated time slots to communicate, respecting people’s time and keeping the meeting focussed on discussion points will go a long way.

To do this, I make a note of the topic of discussions during the interview so that I know exactly when a conversation is going off-track and can effectively reroute it.

Also Read: 7 tips for even the most timid entrepreneurs to succeed at networking events

But keeping it short also doesn’t mean we are completely robot-like and fail to ask people meaningful questions like how their day was.

4. Secret weapon

One of my best findings this year has been a chrome extension called Crystalknows, an extremely effective tool in networking effectively with people outside of your work/country.

Crystalknows uses a technology called personality AI that makes use of machine learning and AI to predict someone’s personality using their online footprint. Since building a good rapport is such an important quality of networking, this software can help you do just that with people you have never met before. The software even tells you how you can handle conflict or please your interviewer. Creepy, but useful.

Hope these tips helped, even if you pick just one out of the four I can guarantee you that you will enjoy the process of virtual networking.

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Image Credit: Abbie Bernet

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Skuad, a digital payroll platform for remote teams, has secured US$4 million in a seed funding round, led by Singapore-based VC firm BEENEXT and venture investment platform Anthemis Group.

Other investors in the company included Alto Partners Multi-Family Office and Rohan Monga, CEO of Zenius Education.

With the new funding, Skuad intends to develop its remote employment infrastructure and scale its growth team across multiple geographies.

The idea for Skuad sprouted into the minds of the three co-founders –Sundeep Sahi (former CPO at Brand Networks), Naman Singhal (former CEO of AppStreet) and Dave Fall (former CEO Brand Networks)– after they experienced the pains of running a remote team with their previous companies. This included setting up legal entities and ensuring remote compliances for each country.

Since every country has its own unique requirement, the trio decided to come up with one “global employment platform” where companies can hire remote employees without setting up subsidiaries or local infrastructure in other countries.

Skuad employers are able to pay their remote workforce seamlessly on one platform. Beyond automating global payroll, local compliance and taxation, the platform also manages benefits for remote employees across the globe. In order to use these services, employers have to pay a flat fee per employee they hire via its website.

Also Read: The beginning of the decentralised office — are you ready for a remote working future?

In addition to these services, Skuad also helps working professionals find the right kind of remote working opportunities.

“We started building Skuad pre-COVID-19 with a vision of a flat world where great talent can have an amazing and fulfilling career in their own city or country while working remotely for thriving companies that would love to hire them. The pandemic reinforced further this idea across the globe and we are already seeing a significant uptick on this demand in various corridors,” Sahi told e27 in an email interview.

“We are a platform that simplifies the global team hiring by standardising employment contracts for various countries, digitising global payroll and compliances as well as automating payments to remote employees to pay them in their local currencies. We charge a flat fee per remote employee per country to hire, pay as well as manage their local compliance and taxation,” he further explained.

Skuad’s platform for hiring has been used by many large companies such as Indonesian tech giant gojek and Indian telecom giant Airtel.

As of now, it has over 90 people in its team, distributed across four continents.

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Image Credit: Skuad

 

 

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DRVR, a fleet analytics software provider for logistics and passenger vehicles, announced today that it has raised an undisclosed amount of funding from Smart Axiata’s Digital Innovation Fund.

With the funding, the company wants to expand its services into Cambodia and hire across the board, DRVR co-founder and CEO David Henderson told e27 in an interview.

The Bangkok-based startup was founded in 2014 by Henderson (CEO), Yevgen Peresada (Chief Architect), and Damien Williams (CFO).

The way it works is that vehicles that use the DRVR technology are attached with sensors that transmit data into the DRVR app. The application then processes and analyses the collected data, and turns the information gathered into actionable insights that shows fleet performance metrics.

“Suppose you have a fleet of trucks delivering goods. As soon as a truck leaves your warehouse, you lose the visibility of it. You don’t know where exactly the truck is, how it’s being driven, or if someone is pinching your cargo or valuable fuel, etc. What if you could make a digital clone of the truck and put that on the internet? You could suddenly see in real-time information about the way it is being driven,” Henderson said.

Also Read: News Roundup: Co-living operator Hmlet expands in Japan, appoints new CFO, CTO

“This is what we do. We can also help you predict if it’s going to break down and help you service it. We take this raw data and we transform it into actionable knowledge,” he continued.

In addition to sharing its latest funding announcement, Henderson also shared the struggles that the startup has faced recently in growing its company.

Two years ago, DRVR faced a major setback when it lost its largest customer. While there were other reasons behind it, one of the main ones was because its client wanted DRVR to build a product that was not aligned with its focus.

“In 2018, we lost our then-largest-customer because they wanted us to build a new product for them, and this simply did not align with our plans. A choice had to be made; we decided not to go in that direction but focus our efforts in another area (AI Fuel). These kinds of painful decisions sometimes have to be made,” he said.

“We had hoped that we might be able to keep them as a customer and move in our own direction, but you can’t have your cake and eat it too. You can’t be all things to all people or you end up being nothing,” Henderson stressed.

The pandemic has not been easy for the startup as it faced challenges. It had to pivot from implementing a direct sales model to a partner sales model; this helped to improve its growth in the last nine months.

Also Read: From 30 to 400: TNG Fintech Group founder and CEO Alex Kong shares how to grow your human capital

Nevertheless, the startup has been undeterred by its setback to hit its target of having six times more growth in revenue by April next year.

In 2018, DRVR secured US$450,000 from an undisclosed group of investors and had earlier secured a small round of funding from an angel investor group in Hong Kong.

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Image Credit: DRVR

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Despite a raging pandemic, the internet economy in Southeast Asia (SEA) continued to grow at an exciting pace. In the latest edition of their joint report, Google, Temasek and Bain & Company expected it to hit the US$100 billion mark and triple to US$300 billion by 2025.

It is no wonder that everybody wants a piece of the cake. But in order to be able to seize this opportunity, companies need to come out with new, creative offerings for potential customers.

This is what Clonet is trying to give to the region through their expansion plan from their home country South Korea.

As a mobile commerce platform, it aims to provide an easy and quick way for brands to produce high-quality short videos –that will eventually enable fun and different shopping experience for customers.

The startup claims that brands can produce “eye-catching” short videos at 20 per cent of the cost and 15 per cent of the time compared to the industry average. Customers can buy the products showcased in the videos “with just a single swipe” –without the need for different stages as currently offered by leading social media platforms such as Instagram or YouTube.

In fact, the startup said that it will take only 10 seconds to purchase a product from its platform, instead of the usual three minutes on other platforms.

Also Read: 15 South Korean startups set to pursue the Southeast Asian market

In an interview with e27, Clonet CEO Eric Cha explains that the app is targeting Gen-Z customers who are used to shop products through visual representation. Outside of its domestic market, it is aiming for customers of the same segment who are fans of K-beauty and fashion products.

In his time as a fashion content manager at TikTok, Cha has developed a pool of 800 influencers –including a group of so-called “super influencers” with more than one million followers– and up to 50 per cent of the followers are based in SEA.

“What I understand from my days at TikTok … users in SEA are rapidly growing and I often received queries about K-beauty and other K-products. It encouraged me to explore this further,” he says.

Clonet said it currently hosts more than 300 sales host and influencers. Within just six months since its launch, it recorded 14 per cent sales conversion rate which is said to be 3.5 times higher than that of traditional mobile commerce.

The startup also said that over the past three months, more than 250 brands in their platform have generated over 15,000 videos.

Riding the K-wave

It is no secret that Korean Wave –the flood of products and services from South Korea as triggered by the popularity of the country’s entertainment industry– has hit the SEA region hard.

According to Jang Won-ho, Dean at the University of Seoul’s College of Urban Sciences and Director at the Centre of Global Culture and Social Empathy, as reported by The Jakarta Post, the number of Korean content exports to ASEAN countries had increased from US$800 million in 2015 to US$1.3 billion in 2017.

Also Read: 15 early-stage startups from South Korea to showcase tech at Gitex Technology Week in Dubai

There is no sign of this momentum slowing down just yet, and this is the opportunity that Clonet is seizing.

As part of its expansion plan to SEA, the company started off by setting up an entity in Singapore. But their main plan is to begin by entering the Philippines.

As part of its entry to the Philippines, Clonet introduces a new service called VDVIA which combines Clonet service for fashion products and The Klippers service for beauty products.

It also set up a joint venture with Korean medical beauty company ZISHEL Group and retail giant E-Land Group to support its expansion plan.

Targetting two million downloads in the first year, Clonet also receives support from government agencies such as the Korea Institute of Design Promotion (KIDP) in its expansion plan.

“The support came in the form of extensive research, redesigning, and redevelopment of UI/UX,” Cha explains.

What is next?

In its home market, Clonet aims to widen its offering beyond fashion by including beauty, golf and luxury services. Starting in 2021, it will also include pet and food sectors as well.

Cha also stated that the company is currently fundraising.

“We want to work with VCs with an interest in K-beauty and fashion content and short-form media who can help us hire [talents], increase sales conversion rates,” he closes.

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Image Credit: Clonet

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Indonesian e-commerce giant Tokopedia announced it has engaged Morgan Stanley and Citigroup as advisors as part of plans to accelerate its public listing.

In an official statement responding to a recent report by Bloomberg Quint on their exit plan, a Tokopedia spokesperson wrote:

“Market adoption is accelerating business growth since the pandemic. We are considering to accelerate our plan to go public and we have appointed Morgan Stanley and Citi to be our advisors. We have not decided yet which market and method, and still considering options.”

“SPAC is a potential option that we could consider but that we have not committed to anything at the moment.”

Bridgetown Holdings is a blank-check company backed by billionaires Peter Thiel and Richard Li. Published on December 15, the report stated that it is mulling a potential merger with the Jakarta-based e-commerce company.

Dealstreet Asia wrote that though a sale to a SPAC represents a faster route to a US listing, Tokopedia Co-Founder and CEO William Tanuwijaya had previously expressed his desire for a dual listing to ensure local employees and Indonesians can own shares of the firm.

Also Read: What does Peter Thiel-backed Bridgetown’s IPO mean for SEA’s startup ecosystem?

Tokopedia has raised US$2.80 billion in funding till date from investors including SoftBank, Alibaba and Temasek Holdings, making it the second-highest valued startup in Indonesia after gojek.

According to reports, Tokopedia could be valued up to US$10 billion.

Bridgetown itself has raised US$550 million in a US IPO in October. In an interview with e27, experts commented that the SPAC model that the company is implementing can be “an alternative” way to fundraise for startups in SEA.

“Having seen the more than 100 SPACs emerge in North America earlier this year, we are not surprised to see this new SPAC coming out to focus on Southeast Asia. We welcome this initiative, which will provide an alternative path to liquidity and access to public markets for one or more rising tech, financial services or media company in the region,” said Sanjay Zimmermann, Senior Associate at White Star Capital.

This is especially relevant since Bridgetown has announced that it “plans on targeting a company in Southeast Asia with operations or prospective operations in the technology, financial services, or media sectors”.

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Image Credit: Tokopedia

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In the past decade, the blockchain sector has emerged as a formidable element of the digital economy. This has led to a race by governments, institutions and businesses to incorporate the appropriate elements of these new technologies into their operations, to streamline performance and increase efficiency, as well as attract additional business opportunities. 

In 2020 and 2021, Singapore looks set to become one of the world’s largest digital asset hubs as a result of progressive government regulations such as the Payment Services Act—which has attracted large crypto businesses such as Binance into the country, as well as rumours of traditional institutions such as DBS implementing an exchange for digital assets.

However, a recent study showed that Singapore, alongside the US and UK, had the largest number of virtual asset service providers with weak ‘Know your Customer’ (KYC) processes—making it easier for nefarious actors to launder money. 

KYC processes are not only a legal requirement, but serve to allow organisations to detect and prevent criminal activities around the globe including money laundering and the financing of terrorism.

The importance of KYC is highlighted by the expense which financial institutions go to fund appropriate measurements each year—with approximately US$25 billion spent every year on financial crime risk management—the majority of this budget going to KYC processes. 

It comes as no surprise that upholding KYC best practices is necessary for both the nascent digital assets industry and the traditional financial sector at large. This is especially important for a country like Singapore that is known for its progressive policies that allow institutions to explore innovations within the financial sector ranging from asset tokenisation to Central Bank Digital Currency (CBDC).

Also Read: Legaltech on blockchain is set to be the next hot investment sector. Here’s why

‘Know your issues’ — The existing challenges in KYC processes

Despite the critical importance of KYC, current KYC methods are inefficient and plagued with manual, labour-intensive processes, thereby increasing the risks of duplication, human errors, and fraud. In fact, according to KMPG, it is estimated that up to 80 per cent of the efforts associated with KYC are dedicated to information gathering and processing, with only 20 per cent allocated to assessing and monitoring information for key insights. 

On the receiving end, prospective customers are often frustrated by the sheer amount of back and forth, repetitive questioning, and lengthy processing times which KYC entails. Onboarding new customers to buy, sell, and trade crypto is crucial for the budding digital asset industry to further develop, but inefficient KYC processes have the potential to chase prospects away as a result of drawn-out approval times and endless back and forth on paperwork. 

The good news is that emerging technologies such as permissioned enterprise blockchain platforms have the ability to solve existing KYC challenges not just for the digital asset space, but for the wider financial industry in Singapore. 

Greater customer experience through efficiency

Blockchain, originally known as the underlying technology for bitcoin and other cryptocurrencies, reduces exponentially the amount of manual data processing necessary for accurate and reliable KYC. Instead, it allows financial institutions to access real-time, up-to-date customer information through a platform that is transparent, secure and immutable. 

As the labour-intensive and time-consuming process of acquiring KYC information is reduced, financial institutions will benefit from increased operational efficiency, and resultantly become more profitable as manpower costs are reduced. A report by Goldman Sachs echoes this sentiment—stating that the banking sector can achieve a 10 per cent headcount reduction with the introduction of blockchain to KYC procedures.

Speeding up the customer onboarding process in a manner that is seamless and hassle-free also translates to a greater customer experience and satisfaction—as lengthy processing times become an issue of the past. 

Also Read: Blockchain for dummies: A 101 guide to the next hot fintech trend

Blockchain technology also allows financial organisations to put customer KYC details on a shared distributed ledger which can then be used by other accredited organisations—meaning customers will not have to start the KYC process from scratch when dealing with other financial companies.

As data stored on the blockchain is irreversible, transparent and secure, it would provide a single source of truth—reducing inefficiencies, errors and duplication of effort in information gathering between any financial organisations, as well as streamlining data gathering processes and providing relevant parties with secure access to customer data that is being updated in real-time. 

Privacy concerns

While customers may have concerns over their information being shared through a platform with other financial institutions with which they do not have a relationship, certain blockchain platforms—such as permissioned blockchain platforms—enable the sharing of information in a private manner on a need-to-know basis. 

With the increasing number of data hacks in Singapore in recent years—including local organisations such Singapore Red Cross, HIV registry, and SingHealth— it comes as no surprise that customers may have privacy concerns about the sharing of their personal and financial data. 

Permissioned blockchain platforms are ideal for such purposes as they allow organisations to transact directly and privately, with strict authentication requirements to access private information—dis-intermediating and decentralising information without sacrificing privacy or security. Its popularity is evident with even central banks such as the Hong Kong Monetary Authority opting to use a permissioned blockchain platform, like R3’s Corda, as it enables enterprises to reap all the benefits of blockchain technology, while allowing transactions to remain private and only available to permissioned parties.  

The future of KYC

As KYC forms the backbone of the financial industry’s anti-money-laundering efforts, it is evident that blockchain will lead us to reimagine KYC processes as we know them—offering businesses increased operational efficiencies and reduced costs, and customers smooth onboarding procedures and secure transfer of data. 

At the same time, a blockchain-based KYC system could offer regulators greater clarity and understanding of how customers have been onboarded and the application of underlying KYC information—contributing to the development and legitimacy of the digital assets industry as it gains popularity.

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Editor’s note: e27 aims to foster thought leadership by publishing contributions from the community. Become a thought leader in the community and share your opinions or ideas and earn a byline by submitting a post.

Join our e27 Telegram group, or like the e27 Facebook page

Image credit: Arlington Research on Unsplash

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Let’s face it. It has not been an easy or “normal” year at all. But let’s close 2020 with a bang! How so? By sharing your rants, thoughts, observations, or even predictions on what will come (apart from the vaccine, of course) on tech, business, startups and the SEA ecosystem.

We are all ears and the e27 Contributor Programme will make it super easy for you to do so. Become a thought leader in the community and share your opinions or ideas and earn a byline by submitting a post.

Sharing some great ones from our community in the past week. While fintech trends rule the roost, we also have ideas on HR for 2021 and how to enhance “stickiness” on your app/web apps.

Happy reading.

Rise of the SOE: Why startup M&A is a key part of a state-owned digital ecosystem by Sandhy Widyasthana, COO / Portfolio Director at MDI Ventures

“For years, state-owned enterprises (SOEs) around the world have undeservedly been branded as inefficient, with a variety of loss-making business units hampering core revenue drivers. But as the SOE landscape in China has shown, this has not been the case in recent years– not only have profits and revenues increased across the board, but China’s largest SOEs have become key dealmakers in the global acquisitions space.

In SEA, the outsized influence of SOEs has had varying effects on the aggregate productivity of the region’s ten economies.

With the influx of both private local wealth and foreign venture capital into ASEAN’s startup communities, the region’s SOEs have taken notice of this growth sector. In Singapore and Thailand, corporate venture capital (CVC) arms of SOEs like Singtel, Siam Cement Group, and Singapore Press Holdings have become major, active players in early- and growth-stage funding rounds of local startups.”

The world of fintech

3 reasons to rethink your payments strategy in 2021 by Siamac Rezaiezadeh, director of Product Marketing at GoCardless

“A recent Forrester report commissioned by GoCardless reveals some of the most common pain points businesses face when it comes to collecting payments – pain points that have become top of mind during COVID-19. Some key findings highlight the connection between failed payments and negative business impacts that have long-lasting ramifications on both a business’ bottom line and its customers.

Moreover, as payment woes come to the forefront, we are also seeing a rise in the subscription economy, with research by Zuora indicating that 70 per cent of firms in Australia and New Zealand plan to shift to a subscription model within the next two to three years. To reap the benefits of a subscription economy, however, businesses need the right payments infrastructure to support it.

Addressing both of these issues comes down to implementing a strong payments strategy.”

Cooperation will be the shortcut to recovery for financial services in Singapore and beyond by Jonas Thuerig, head of F10 Incubator and Accelerator

“It is the development of monopolies that ultimately chokes innovation. Mega-conglomerates can strangle small businesses and push them out of the market. When one company dominates a sector, they no longer have the need to improve, which limits their growth potential.

For a sustainable market, we need to invest in the infrastructure that enables innovation, whether that is the ecosystem builders or the digital networks that connect services and products to end-users.”

Reimagining anti-money laundering processes with blockchain technology by Indra Suppiah, APAC lead for government relations in R3, an enterprise blockchain software firm

“In 2020 and 2021, Singapore looks set to become one of the world’s largest digital asset hubs as a result of progressive government regulations such as the Payment Services Act—which has attracted large crypto businesses such as Binance into the country, as well as rumours of traditional institutions such as DBS implementing an exchange for digital assets.

However, a recent study showed that Singapore, alongside the US and UK, had the largest number of virtual asset service providers with weak ‘Know your Customer’ (KYC) processes—making it easier for nefarious actors to launder money.

It comes as no surprise that upholding KYC best practices is necessary for both the nascent digital assets industry and the traditional financial sector at large. This is especially important for a country like Singapore that is known for its progressive policies that allow institutions to explore innovations within the financial sector ranging from asset tokenisation to Central Bank Digital Currency (CBDC).”

Managing people in and out of the organisation

Transformation tenet: The digital customer experience is key to “stickiness” by Jim Cavanaugh, President, APJC at AppDynamics, a Cisco company

“Indeed, this year marked what must be the greatest acceleration of industrial transformation ever, as companies across all sectors migrated in their droves to digital and online environments. A deployment that would typically take place over the course of months, if not years, had suddenly sprung into action in a matter of weeks.

And all in a bid to maintain business continuity and ensure organisations could cope with unprecedented digital demands – from both customers and employees.

However, perhaps what is more important to note is that a whopping 91 per cent of these new users said that they planned to continue using at least one digital service post-pandemic. Which stands to reason: are we really all going to go back to the office full-time? Schools? How about ordering our groceries online, and spending an evening at home with our favourite streaming platforms?”

Looking beyond the crisis: Top 5 trends that will characterise work-life in 2021 by Leong Chee Tung, CEO at EngageRocket

“Lessons from the pandemic remain as pertinent as ever, informing the way forward for years to come. It has changed what an employee expects from the workplace, also rejigging the definition of “good” performance and productivity. In this climate, it is clear that we cannot take employee engagement for granted.

In 2021, could we expect a swift return to BAU? Or, should HR practitioners treat the pandemic as a watershed period, completely reshaping the future of work? Industry experts suggest that the answer – without a doubt – is the latter. Here are five ways the changes brought on by COVID-19 will determine the future of work.”

Coming up

How my entrepreneurial failures led me to rethink learning and upskilling by Japhet Lim, edutech entrepreneur

“Learning is a forever journey and not something that should be halted or resumed as and when it is seemingly needed. From children requiring tuition in addition to classroom education, or adults in need of self-improvement courses, education has become a necessity.

This situation has been further exacerbated by the COVID-19 pandemic threatening jobs in almost every industry, leading to the need to re-skill and upskill.

However, courses, whether academic or non-academic, have become more and more expensive over the years. Many of them charge exorbitant fees but do not impart lasting impact, knowledge, or significant skills to their students. In the end, students often walk away from these courses feeling disappointed and harbouring a recurring question: What have I learnt from this?”

How can India leapfrog into the league of the most innovative countries within the next five years? by Ravi Narayan, CEO of T-Hub

“India’s position as the third-largest startup economy with around 50,000 startups — and counting—is a good indicator that we are progressing in the right direction.

Undoubtedly, in recent years, we have made significant headways in the overall development trajectory to support and foster India’s innovation story.

However, the larger question remains: how can India leapfrog into the league of the top ten most innovative countries within the next five years? The improvement in the GII ranking should inspire the nation to work towards creating a robust, sustainable, and inclusive innovation ecosystem that encourages innovators to create new categories of solutions to address the existing innovation gap.”

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It is projected that the senior population of Thailand will reach 20 million by 2050, accounting for 35.8 percent of the country’s total population. With these estimates serving as proof that the country is entering the era of an aging society, coupled with the emergence of a global health crisis in the form of the COVID-19, the country’s healthtech sector is accelerating its plans to position Thailand as Asia’s medical hub.

Mr. Phongchai Petsanghan, Vice President of Thai Health Tech Association and CEO and Co-founder of Telehealth Platform, Dietz.asia, spoke about the overall Thai health tech in 2020, saying this year posed great challenges to the growth of Thai health tech startups. Some of them grew by leaps and bounds, such as telepharmacies, while others saw negative growth. “All in all, this year’s growth in the sector was a little bit sluggish,” he said.

However, there have been clear developments in several other healthtech sectors since the start of lockdown during which people were restricted from traveling to see doctors. Apart from the telepharmacy segment with exponentially growing businesses such as Pharmcare and Arincare, we also saw spurring growth in the telemedicine segment such as Chiiwii, OOca, doctor A to Z, the remote public health segment such as Dietz.asia, and the medical education segment such as Medic.

On the other hand, the battered health tech businesses such as private hospitals unable to cater to foreign customers due to state-enforced restrictions. Health tech businesses with corporate clients also had a hard time during the pandemic due to their clients’ delayed buying decisions.

Challenges in accelerating the country’s healthtech

 “The Thai startups’ technologies and business models as well as the size of the Thai market are second to none in Southeast Asia,” explained Petsanghan, however, he underscored that there are still important obstacles that need to be circumvented.

One key challenge is the limited access to capital for market expansion and less investments funneling in when compared with other countries. Petsanghan suggests that the Thai government needs to be more proactive in providing better investment support, such as by shortening the time it takes to process or assistance for the health tech startups.

Moreover, the Thai public sector needs to work with Thai startups more often. The problem is, based on Petsanghan’s observations, Thai organisations would rather create their own teams and technologies while their foreign counterparts tend to do otherwise.

At present, regulations or operational guidelines are also not yet conducive to development. For example, there are insufficient regulations on telemedicine, reimbursement, data integration, and disclosure of information. Petsanghan believes that “the Thai government should make more amendments to such regulations particularly concerning the issues of anonymous access to public health information, fund mobilisation, and the creation of an environment suitable for sandboxes.” He added, “lastly, Thai health tech startups still have a shortage of programmers or data scientists. Computer scientists and related occupations should therefore be promoted by the government to meet the demand of the startups.”

Also read: Thailand’s National Innovation Agency to gather support for Thai startups

Optimistic outlook

Despite the doom and gloom this year, 2021 is expected to be a good year for Thai health tech startups with growth projection of no less than 20%, all due to COVID-19 which has prompted changes in regulations as well as the recent easing of restrictions.

Apart from the pandemic, the key factors contributing to the growth of Thai health tech startups include the adoption of technology by the private and public sector with their medical services as they need to offset revenue loss with staffing cuts. The second key factor that benefits Thai health tech startups is the Medical Council of Thailand’s latest announcement on telemedicine, the Comptroller’s General Department’s announcement on civil servants’ medical expense reimbursement and private companies’ health insurances that provide higher coverage for online medical services. The third factor is the increase in health tech use by people in the working-age population and the senior citizens. Another factor is private businesses’ reduced subsidies for their employees’ medical bills with the use of medical service technology.

There have also been several developments in the funding space such as the case for Arincare, a provider of drugstore management systems and telepharmacy which has made it to Series A. Around two or three Thai health tech startups are also preparing to enter the Series A fund mobilisation, while some Thai health tech startups, such as Raksa, Doctor Anywhere, and Honestdoc have expanded their businesses by partnering with startups from Singapore and Indonesia.

Sparking innovations

 We have seen some successes not only in terms of general business growth and funding, but also when it comes to innovations both in tech as well as general system overhauls with the help of public sectors.

In the deep tech segment, more successful use cases have occurred, including Perceptra’s use of AI to help physicians read X-ray images of patients with lung inflammation. The company’s solution is an innovation developed by Thai people with the potential to compete in the global market. Another successful case is PharmaSee’s use of AI to recognise different type of medications using images as well as its face recognition system for hospitals.

In addition, we have seen more cooperation between large organisations, the government, and startups such as partnerships between IBM, CAT, and CovidTracker.asia to facilitate Alternative State Quarantine facilities in Thailand, a telehealth against Covid-19 project by the Thai health tech association with support from the National Innovation Agency (NIA), cooperation between Pharma Safe and Phayathai Hospitals Group, and the project ‘Journey to Success 2020’ by the Thailand Center of Excellence for Life Sciences (TCELs) — all to promote Thai health startups and improve the overall healthcare outlook for the country, among others.

Also read: Startup Thailand x Innovation Thailand Expo 2020: a catalyst for innovation

Onward to the future of healthtech

On the future of Thai health tech startups, Petsanghan said: “We will see Thai health tech startups join hands with large corporations such as listed companies, banks, and hospitals to further develop or expand their services. Over the past 2-3 years, large corporations proved that innovating something by themselves resulted in slow growth due to a trial and error process and the employees’ lack of a sense of ownership.”

While discussing the importance of cross-sector partnerships, he added “when large corporations work with startups which have their own products, services, and markets, having learned lessons from trial and error, there will be more collaborations at the international level. Thailand is also Southeast Asia’s hub of smart city. More takeovers and mergers could be on the horizon. Technology-wise, we will see higher adoption of deep tech with the use of AI in various fields and development of a system based on standardised data sets.”

Albeit the better outlook for Thai health tech startups next year, they still need assistance from the government on many aspects. As the vice chairman of the Thai health tech association, Petsanghan emphasised the need to develop new deep tech digital services based on medical data and the use of Thailand’s strengths such as herbal products and medicines, medical cannabis, Thai food, and healthy food.

Presently, there are around 56 Thai health tech startups in the ecosystem with the establishment of the Thai Health tech association and activities to promote entrepreneurs and networking of stakeholders. The development of systems and strategies for Thai health tech startups is expected to take place in 2021. Petsanghan urges the government to act as a bridge to connect foreign investors with the Thai startups, expand domestic and international markets and promote the strengthening of health and medical startup networks in Southeast Asia.

To view the live programme of the Startup Thailand Marketplace, you may visit the official site here or watch on the official Facebook page of Startup Thailand.

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This article is produced by the e27 team, sponsored by the National Innovation Agency of Thailand.

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