Millennial males continue to define the face of South and Southeast Asian consumers of fintech lending, the same as a few years ago. However, there has been a clear change, increasing uniform coverage of the population with online financial services.

How people got more involved with fintech

Seven to eight years ago, only a select few customers borrowed money online. Some were “innovators”, enticed by the emerging prospects of global digitalisation.

They were keen to experience all the benefits of digital financial services, speed, accessibility and convenience then and there, long before they would become an essential part of life (or not).

With no readily available options, others were indeed in a serious need of money, knocking on the doors of banks and other financial institutions.

Borrowers combining traits of both archetypes were the most common customers of the first online lenders. This group mainly consisted of tech-savvy male citizens who had pronounced spending tendencies. The data from our services show, for example, that over the past five years in Vietnam, 71 per cent of applicants were men; in India, 89 per cent.

The urban youth, among others, is the base driver of fintech development in the region. Various experts have claimed this, one of which was the Singapore-based banking corporation UOB and their 2017 analytics.

Indeed, the generation of 25-35-year-old urban millennials, as the most consumer-active and tech-savvy of all, became the segment’s defining audience for years to come. This is especially true for Asia, considering the overall youthfulness of its population: the average age in South Asia is roughly 28, in Southeast Asia, 30.

Still, online loans quickly grew in popularity, attracting new segments of the population. They benefited from the swift Internet penetration and other regional specificities. A significant contributing factor, especially in the Philippines and Indonesia, was geographic disunity,  which made Internet technologies the only viable way to access financing for the citizens of remote regions.

The predominantly low yet developing urbanisation also played its part. In the face of growing consumption, a common lack of employment, and consequently, no access to banking services, the rural population also turned to online lending.

The rising client mobility cannot be overlooked as one of the long-term trends defining the customer portrait of digital financial services. The smartphone is becoming an increasingly versatile tool of today, directly affecting the fintech sector.

Also Read: How this homegrown fintech is helping Singaporeans with alternate investing

For instance, across the Robocash Group footprint in South and Southeast Asia, at the beginning of 2018, every second loan application was received from a mobile device. According to more recent data, two out of three loans were received through smartphones.

The simplicity and speed of receiving funds anywhere with a smartphone have added to the popularity of online lending, making it accessible to everyone.

What comes next?

The global development of fintech certainly did not leave South and Southeast Asia behind. The penetration of banking services, in general, is on the rise (in the Philippines, for example).

More and more banks are shifting towards the digital. At the same time, regulation is being improved upon (evidenced by the recent emergence of special licences for digital banks in Singapore, Malaysia and the Philippines). 

Of course, COVID-19 has affected this process. Due to the proximity of the pandemic’s epicentre, Coronavirus had increased the rate of development of digital financial solutions in Asia.

For instance, India experienced a sharp improvement in financial inclusion with the emergence of entire “digital districts”. Due to the drop in consumption during the first and second waves of the pandemic, a surge in accumulated demand will likely increase the use of financial products, primarily lending.

Suitable options are becoming increasingly common to find online. The bottom line is that the Indian national financial technology sector promises to grow by an impressive US$100 billion to US$160 billion by 2025, showing an annual CAGR of 22.7 per cent (2020-2025). The impressive growth rates and bright development prospects also apply to fintech at the macro-regional level.

Thus, fintech services are becoming more and more widespread in South and Southeast Asia.

What changes may this bring to the customer portrait of online borrowers?

The ratio of males to females remains approximately the same (58 per cent/42 per cent in our holding for 2022). The millennial generation also remains the most active audience.

The younger generations have begun to show more engagement, and the average age of our applicants in the Robocash Group averages 32.4 years old. The new borrowers are actively adopting modern financial technologies.

However, the increasing involvement of the older population in digital lending will be the defining factor in the mid and long-term. On the one end, the natural ageing of returning borrowers will become more consolidated.

On the scale of Robocash Group, about 80 per cent of loans are now issued to repeat borrowers. On the other end, the older generations will generally become more involved in the internet space.

Also Read: 6 fintech startups you should keep an eye out for

By 2025, the age structure of internet users in India will change. The main share will consist of 35-54 year-olds, while the 55+ generation will also become significantly more active. Indeed, this trend is already emerging in Vietnam, where, according to our data, men aged 36-50 are more likely to borrow money than others.

Notably, the lending services themselves are changing, which entails a client transformation. The BNPL loans, which enable the purchase of goods in equal instalments, are gaining popularity.

Thus, according to UnaPay, the Robocash Group’s BNPL service in the Philippines, its average client today is still the same millennial (23-38 years old, 84 per cent), and two-thirds of the clients are women, who are more inclined to consume “here and now”.

Final thoughts

Shortly, we will see the evened-out distribution of fintech services among customers in terms of gender and across different age groups. This could be attributed to the inevitable global growth of digitalisation, which includes the financial sector.

In the developing countries of South and Southeast Asia, with their huge potential for growth in consumer activity and internet penetration, the trend promises to manifest itself especially clearly and rapidly.

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As passionate gamers, their vision was to create a high-quality and action-packed blockchain game. They wanted to think beyond the idle, farming, clicker, turn-based games available in the market that came with no proper graphics and animation or even music and sound.

“We were determined that our games should be what they are actually meant to be — fun. So, we came up with a business plan and presented it to several regional investors. We were lucky that they all shared the same opinion and even recommended us to big investors in the west. The rest is history,” recounts Tin Nguyen.

With the confidence gained from their meeting with the investors, Nguyen and the team went on to start Sipher.

A blockchain gaming studio based in Vietnam, Sipher aims to provide compelling gaming experiences. Here, players control avatars to interact with each other through PvE (player vs environment) co-operative dungeons and battle each other in PvP (player vs player) multiplayer battle arenas, engaging with the virtual world, battling for virtual lands, and earning items and rewards.

Sipher’s founders come from varied backgrounds. Nguyen is the CEO of Trung Thuy, a real-estate firm in Vietnam and on the Vietnam Forbes 30 Under 30 list of 2015. His partner Loi Luu is CEO and Co-Founder of Kyber Network. This on-chain liquidity protocol powers decentralised applications, including exchanges, funds, lending protocols, and payments wallets.

The third co-founder is Victor Tran, CTO and Co-Founder of Kyber Network. Tran has been involved in blockchain and cryptocurrency development since early 2016.

Also Read: Sipher closes US$6.8M seed round to develop metaverse game World of Sipheria

Unlike most blockchain games available in the market, the Sipher team not only aims to onboard the crypto- and NFT-savvy crowd but to introduce Sipher to the traditional gaming community to play a fun game worthy of e-sports.

“We are in the process of developing and onboarding experiences for the traditional gaming market to make it as smooth as possible. Think of it as mixing web2 practices with web3 technologies,” says Nguyen.

As Nguyen mentioned, Sipher’s games are yet to hit the market. Once they are launched, the company will introduce SIPHER as the governance tokens, which can be used for staking, cloning new characters, and crafting new rare equipment. Users will also have a share of the marketplace fees and voting rights on future decisions of the game development team.

ATHER will be the reward token, which will be burnt to level up characters, skills, equipment and other in-game items and features.

“We plan to target the global markets with our games titles. We don’t want to attack the markets such as Southeast Asia, which have taken the blockchain gaming industry mainstream. We aim for worldwide adoption,” Sipher CEO Nguyen tells e27.

Even though Sipher’s games are not launched yet, its community has grown with 108,000 followers on Twitter and 163,000 members on Discord.

Last October, Sipher closed a US$6.8 million seed financing round, co-led by Arrington Capital, Hashed and Konvoy Ventures. Defiance Capital, Signum Capital, Dragonfly Capital, CMT Digital, BITKRAFT Ventures, Delphi Digital, Alameda Research, Fenbushi Capital, Sfermion, Hyperchain, GBV, Kyber Network, Coin98 Ventures, YGG and Merit Circle, also joined the round.

Angels, including Holly Liu (Kabam), Kun Gao (Crunchy Roll) and Alex Svanevik (Nansen.ai), also co-invested.

The capital is being used to develop its upcoming ‘World of Sipheria’ game.

The gaming startup is now looking for a follow-on round. The goal is to onboard strategic partners that could help Sipher grow further. “We will prioritise investors with a good reputation and partners, who help us conquer new emerging markets outside of SEA like Latin America, Africa and India,” he remarks.

According to Nguyen, Southeast Asia is leading the charge toward the future of blockchain gaming. Vietnam, in particular, is consistently developing very innovative and state of the art technology. The region will continue to be a leader in this space.

Also Read: Metaverse is around the corner and you should play a role in it

Although the blockchain/metaverse gaming industry is still in its early stages in the region, its vulnerabilities have started manifesting.

The recent Axie Infinity hacking incident is a case in point. The hackers stole about US$615 million in USDC and ethereum from the metaverse game’s Ronin Network. As per media reports, the FBI and the US Department Of the Treasury investigation have found out that Lazarus Group, a hacking organisation based in North Korea, was behind this attack.

Nguyen feels that the highest priority should be given to cyber security to prevent such possible events in the future. “To prevent hacks and exploits affecting the users should always be our priority. Thanks to our connections at Sipher, we are consulting experts with experience providing cyber security services for the US National Defense,” he concluded.

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Image Credit: Sipher

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Global e-commerce markets are increasing, creating plenty of opportunities for local small and medium-sized businesses (SMBs) to grow beyond their borders. In 2021, over 300 Singaporean companies ventured overseas, in an expansion estimated to generate SG$4.6 billion in overseas sales.

Consider the United States, the largest export partner for Singapore. While just 12 per cent of the e-commerce market comprises international sales, cross-border shopping has grown 42 per cent since 2019, which points to the substantial growth potential.

According to the PayPal Singapore Online SMB Survey 2021, 81 per cent of SMBs in Singapore are already engaged or planning to engage in cross-border trade. A successful cross-border strategy equally needs a robust international payments approach.

As we see more SMBs make the step into cross-border trade, I believe that five key principles will help bring them one step closer to success.

Winning new customers through payments security

Most people are security conscious when shopping online. In Singapore, 82 per cent of consumers consider security as the most important factor in online transactions. These security concerns are amplified when consumers shop from merchants overseas.

Creating a secure checkout experience is key to easing customer concerns. Using payment processors with poor security standards exposes customers to risk and can harm a brand’s reputation.

By contrast, merchants who adopt reliable and secure digital payment options can gain customer trust and brand loyalty.

Localise payment options

Understanding local payment preferences is a fundamental part of driving conversion. In Japan, consumers overwhelmingly choose credit cards; in mainland China, the digital wallet Alipay is the payment method of choice; while in France, debit cards are the preferred payment method for online shopping.

Adapting to these different methods has never been easier with global payment solutions that can present consumers across different markets with their locally preferred options.

Know your consumer trends and preferences

Catering to consumer trends and preferences requires another layer of consideration, the unique characteristics of local market consumers.

Concerns about delivery time and costs and the proliferation of counterfeit goods remain the major cross-border barriers for American online shoppers. While in mainland China, Singapore’s third-largest export market, mobile-friendly e-commerce websites with Chinese language options are a major draw for cross-border shoppers.

For continued success across markets, merchants must keep a pulse on evolving consumer behaviour and adapt accordingly. Sasha’s Fine Foods, one of our local merchant partners in Singapore, provides a great example.

Launched in 2011, the company was Singapore’s first online-only grocer. Fast forward to 2020, demand increased by 300 per cent at the pandemic’s peak.

By pre-empting consumers’ needs and demands, founder Sasha Conlan had systems in place to ensure that her suppliers overseas continued upholding sustainable modes of farming and that her business could keep up with orders.

Also Read: How can you get ahead of the game with e-commerce in the Australian market?

Harnessing readily available analytics through e-commerce and payment platforms can provide merchants with real-world insights to optimise their business.

Capitalise on holiday seasons

Discounts are universally appealing, and gift-giving traditions are relevant among price-conscious consumers.

The global e-commerce phenomenon called Singles Day, or “11.11” in mainland China, in 2019, saw an impressive US$115 billion of online sales across 11 days. Similarly, seasonal events like Diwali also attract strong online participation in India.

Tracking holiday events across the international market can help merchants become locally relevant and top of mind as consumers hunt for deals.

Drive engagement and optimisation through social channels

During the pandemic, social media emerged as the top growth channel for Singaporean SMBs. Of the SMBs we surveyed, 53 per cent currently use social media to sell their products compared to online marketplaces such as Lazada and Qoo10 (40 per cent) and third-party e-commerce platforms such as Shopify (25 per cent).

The borderless nature of social media makes it easier for brands to be discovered and become focal points for loyal customers. The key is to develop curated social media content such as snippets and teasers to engage consumers.

Merchants should also turn their social media feeds from a shop front into a direct sales channel by including direct payment links to drive conversion.

Anothersole is a great example of a Singaporean brand selling globally, which has a strong social media presence through its curated content, amassing nearly 50K followers on Instagram.

Their effective user-generated campaign using the hashtag #myanothersole also fuels regular follower engagement, with everyday consumers actively sharing how they style their shoes.

Punching above our weight has never been easier

While Singapore is a small domestic market, we can punch above our weight through cross-border trade. The road to success lies in customer centricity, from understanding consumer trends and adapting to their preferences to creating a secure and frictionless environment from which they can buy.

With third-party digital platforms and partners making cross-border e-commerce more accessible, it has never been easier to capture global market opportunities.

As we look ahead, I hope to see even more local merchants of all shapes and sizes become famous international brands selling to consumers worldwide. To me, this is the spirit of Singapore.

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Indonesia-based foodtech startup OFF FOODS today announced a US$1.7 million seed funding round led by Alpha JWC Ventures with the participation Global Founders Capital (GFC) and other strategic investors including Creative Gorilla Capital, Lemonilo, and United Family Capital (UFC).

The company plans to use the funding to support its research and development to offer new variations of its flagship product OFF MEAT, a chicken-like alternative protein, starting with other chicken-like options such as nuggets. The company will also continue to expand to other cities in Indonesia while also launching a direct-to-customer game plan to reach more users.

“We are doing more than just selling food. We are trailblazing a lifestyle change in Indonesia that hopefully will result in a healthier society and more sustainable earth. OFF MEAT and Indonesia are only our starting points. We are pleased to receive such enthusiasm from our new and existing investors, including established experts in the F&B industry, and we are excited to move forward with our product innovation, nationwide expansion soon, and eventually regional expansion in 2024,” said OFF FOODS co-founder and CEO Dominik Laurus in a press statement.

Founded in 2021 by serial entrepreneurs Laurus and Jhameson Ko, OFF FOODS aims to be the leading alternative protein brand in Indonesia and beyond.

Also Read: Everything from soup to nuts: Meet the 27 ghost kitchen startups in Southeast Asia

Price has been one of the key barriers for customers to adopt alternative protein products and embrace a plant-based lifestyle, and OFF FOODS aims to solve this issue by providing a more affordable alternative.

Since its launch in August 2021, the company said that OFF MEAT has seen 10x growth in adoption through business-to-business (B2B) partnerships with restaurants. Its products are currently available in seven cities in Indonesia through its partner restaurants.

OFF FOODS plans to continue expanding the list of F&B businesses that it is teaming up with.

In Indonesia, another startup that is working in the alternative protein space is Burgreens.

For lead investor Alpha JWC Ventures, this announcement was announced only a day after the announcement of its investment in Hangry, another Indonesia-based foodtech startup.

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Singapore-based global payments company Thunes has acquired a majority stake in anti-money laundering (AML) and compliance technology firm Tookitaki for over US$20 million.

This deal enables Thunes to extend and provide the AI startup’s AML and compliance capabilities to its global customers, including Grab, Deliveroo, UberEats, Moneygram, Western Union, Remitly, Revolut, Paypal, and Singtel Dash.

At the same time, the deal allows Tookitaki to deepen its presence in core APAC markets (Singapore, Indonesia, Malaysia, the Philippines, and Taiwan), the Middle East, Europe, and the Americas.

The two firms will continue to operate independently, with the alliance strengthening both companies and enabling them to accelerate their global business expansion.

“This alliance will give all Thunes customers access to next-generation tech compliance systems, reducing the cost of transferring money across borders. At the same time, all Tookitaki’s banking and fintech clients will automatically gain access to Thunes’s network, unlocking pathways to scale globally,” said Peter De Caluwe, CEO of Thunes.

Also Read: Tookitaki secures US$19.2M in Series A funding

Tookitaki was founded in November 2014 in Singapore. It employs over 100 people across Asia, Europe and the US. It delivers AML and compliance solutions to banks and financial institutions using Big Data and machine learning technologies.

In 2019, the regtech firm received US$1.7 million in a Series A funding round led by Viola Fintech, an Israeli venture fund, and SIG.

Thunes is a B2B company. Through a single connection, consumers and businesses can send payments to – and get paid in – every corner of the world. Thunes currently supports 79 currencies, enables payments to 126 countries, and helps to accept 285 payment methods.

Thunes has regional offices in London, Paris, Shanghai, New York, Dubai, and Nairobi.

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