Dear Pro member,

J&T Express’s successful trading debut on the Hong Kong Stock Exchange highlights the growing prominence of Southeast Asian logistics companies in the global market. The Indonesian logistics giant’s IPO raised over US$451M, and it plans to utilise these funds to expand its network, enhance infrastructure, and boost its sorting and warehousing capabilities.

J&T Express has made significant inroads in Southeast Asia, operating in multiple countries and serving e-commerce platforms like Shopee, Lazada, and Taobao.

The company’s decision to go public in Hong Kong, rather than the US, was influenced by regulatory challenges faced by Chinese firms listing internationally. Although predominantly an Indonesian firm, J&T Express’s strong presence in China, including acquiring Best Inc’s express delivery business, makes it well-suited to the Hong Kong market. This diversification across markets and strong growth performance, as evidenced by its 118% compound annual growth rate from 2020 to 2022, played a significant role in the success of its IPO.

However, uncertainties remain regarding the impact of regulatory changes affecting its partnership with TikTok Shop in Indonesia. Nevertheless, J&T Express’s IPO success underscores the attractiveness of logistics and e-commerce-related companies in the investment landscape, with Southeast Asia emerging as a key player in the global market.

Sainul,
Editor.

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How Iron Sail strengthens blockchain gaming ecosystem through collaboration
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The post Ecosystem Roundup: J&T Express raises US$451M via IPO; K-Bank buys Satang Crypto Exchange for US$103M; KIP closes US$60M SEA fund appeared first on e27.

MoneySmart, a fintech group operating a financial content and comparison platform in Singapore and Hong Kong, recently announced that its H1 2023 revenue grew 37 per cent to SGD24 (US$18) million whilst achieving positive operating cash flow.

On the back of this growth, MoneySmart Group is looking to launch an IPO within the next two years. It also plans global expansion and to enhance its products by introducing new features.

e27 spoke with MoneySmart Group CPO Max Del Vita and CFO Raymond Ong to learn more about its plans, IPO, and the fintech industry in general.

Edited excerpts from the interview:

MoneySmart has experienced substantial revenue growth in H1 2023. Can you share the key factors contributing to this growth, and how do you plan to sustain it?

Raymond Ong: Our revenue growth in H1 2023 can be attributed to strategic efforts and customer-focused innovations. Key factors include improved customer service, increased engagement from financial institutions and a rewards programme that has enabled a growing customer base – we saw a 3x increase in H1 2023.

To sustain our growth, we plan to focus on enhancing customer-centric innovations to make the discovery and selection of financial products easier, robust loyalty rewards and customer engagement programmes, and marketing optimisation.

With an IPO on the horizon, what are the primary goals and strategies you are focusing on to ensure a successful public offering in the next two years?

Raymond Ong: As we approach the possibility of an IPO in the next two years, MoneySmart Group will maintain sustainable growth by exploring international expansion opportunities, strategic acquisitions, investments in technology and critical initiatives to drive further growth and profitability.

Also Read: Listing via RTO is simpler than IPO, provides the currency to pursue M&A opportunities: MoneySmart CEO

These initiatives include:

• Enhancing customer retention by elevating the customer experience through personalisation, loyalty and rewards programmes across both the MoneySmart and Bubblegum (travel insurance) brands.
• Leveraging artificial intelligence (AI) and automation to improve customer experiences and operational efficiency. These include areas such as product recommendations, customer service and back-end automation.
• Advancing the development of value-driven insurance products under the Bubblegum brand.

You were planning to hit the bourses via a reverse takeover (RTO) deal. Do you still stick to this plan, or do you plan to go for a direct listing?

Raymond Ong: We are currently evaluating our options as part of our plan to go public in 2025 and will consider the best possible option for our shareholders.

MoneySmart is looking to expand internationally. What regions or markets are you targeting, and what challenges do you anticipate in entering these new markets?

Raymond Ong: We are eyeing regional and global expansion and evaluating the respective markets. Our immediate challenge would be to secure the respective licenses and navigate the regulatory landscapes in each market while ensuring sustainable growth.

We also recognise the importance of understanding the specific cultural and financial nuances in each market to ensure that our brand and offerings resonate with local customers.

How do AI and automation play a role in improving customer experiences and operational efficiency at MoneySmart? Can you provide specific examples of the technologies you’re using?

Max Del Vita: We intend to use automation to improve efficiency and customer experiences by speeding up typically manual reconciliation for rewards qualifications, customer service and personalised customer engagement. To achieve this, we are using technologies such as robotic process automation (RPA), workflow automation and proprietary machine learning algorithms.

When it comes to AI, we are currently in an exciting phase of exploring its potential impact on both our internal operations and customer experience.

Also Read: MoneySmart to list on SGX via a US$161.7M reverse takeover deal with APS

Earlier this year, we introduced a personal recommendation feature that leverages machine learning algorithms to provide customised financial advice to our users. While we are in the early stages, our cross-functional teams are committed to continuous learning and iteration to improve this feature. The goal is to help our customers make informed and effective decisions in their personal finance journey.

Being data-driven is also a fundamental part of our DNA. We use data to inform our decisions and tailor our services to meet the unique needs of our customers, ensuring they make informed and effective choices in their personal finance journey.

Financial services and fintech are highly competitive sectors. What sets MoneySmart apart from its competitors, and what’s your long-term vision for growth and impact?

Raymond Ong: Ultimately, it comes down to understanding the needs of the customers and our financial institution clients. We understand our customer needs better than other industry players, and our purpose is to leverage technology to push the boundaries of how financial products, knowledge and advice come together to empower consumers. We need to do this in close partnership with financial institutions to achieve the right outcome for all and continue to drive both quantity and high-quality customers.

Over the longer term, we intend to go deeper across the value chain in financial products, expand to more markets and reward customers for loyalty and engagement.

Can you tell us more about MoneySmart’s sustainability initiatives and commitment to sustainable growth?

Raymond Ong: Our sustainability initiatives are deeply rooted in our commitment to long-term growth and efficiency. We prioritise sustainable practices by strengthening partner relationships, innovating customer experiences and automating processes for operational efficiency, all aimed at driving scalable growth and optimising capital utilisation to enhance value for our customers, partners and shareholders.

How do you envision the future of personal finance and the role MoneySmart will play in helping consumers make informed decisions about banking, insurance, and investments?

Raymond Ong: As we look ahead, we see an evolving landscape where consumers are increasingly empowered to make informed choices around personal finance.

MoneySmart’s vision is to be at the forefront of this transformation, where we build innovative products to push the boundaries of how financial products, knowledge and advice come together to empower consumers. We aim to play a pivotal role in equipping them with the knowledge and tools to navigate such decisions confidently.

Also Read: How did MoneySmart grow its revenue by 25 per cent amidst a pandemic?

Our commitment to this purpose will continue to be a driving force. We envision a future where individuals can access personalised financial advice, aided by AI-driven insights and automation. With our platforms and services, we want to be a trusted partner for consumers on their financial journey, empower them to make the right choices and find products most suited to their needs.

Can you share your insights on the evolving regulatory landscape in the financial industry and how MoneySmart ensures compliance while staying innovative and competitive?

Raymond Ong: The complexity and fragmentation of the operating environment in the financial industry are increasing. We are witnessing a confluence of factors — such as the rapid digitisation of services, adoption of innovative technologies such as blockchain, fintech, digital payments and more, shifting economic climates, the persistent challenge of financial crimes, and the growing importance of sustainable practices and environmental risk management – all contributing to the evolution of financial regulations.

The financial sector is undergoing a profound transformation, with regulators focusing on adapting to these changes and overseeing non-traditional entrants in the financial services sector.

As licensed financial advisor and broker, we remain vigilant in staying abreast of these shifts. We continuously allocate resources to embed and manage risk and compliance while nurturing a culture that emphasises prudent financial management and compliance with regulations. This includes enhancements to our KYC and AML/CFT compliance, as well as robust data protection measures.

Lastly, do you think generative AI should be regulated, and why?

Max Del Vita: Generative AI is undoubtedly a breakthrough technology with transformative potential across multiple domains. However, it’s still relatively nascent and evolving, which makes the question of regulation a nuanced one.

On one hand, excessive regulation at this early stage could stifle innovation and slow down the pace of discovery and development. Such limitations could inadvertently hamper the positive impact generative AI can have on various sectors, including healthcare, education and finance.

On the other hand, the technology does pose risks, especially when it comes to the potential for misuse and impersonation. Ethical considerations must be taken into account to safeguard against detrimental applications of the technology, whether it’s creating deepfakes or generating misleading information. This is especially important for complex industries like finance, where customers highly value trust and reliable advice.

I believe that a middle-ground approach is prudent. Instead of heavy-handed regulation, establishing guiding ethical principles can be the initial framework to ensure the responsible use and development of generative AI.

Technologies like blockchain can also play a complementary role by enhancing the trustworthiness of AI-generated content. By providing a tamper-proof, decentralised data record, blockchain can verify and trace the source of AI-generated material, adding a layer of security and reliability that contributes to responsible use and mitigate potential risks.

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The launch of ChatGPT last November has fuelled the rise of AI as it has removed some of the friction explaining how AI works and its potential. Mature organisations have been using AI for years now by integrating chatbots into the work of the 50,000 customer service agents in Hong Kong so call centres can achieve their business goals, including cost efficiencies, improved customer satisfaction and increased retention rates.

These organisations also find that as technology develops, there is no longer an excuse for them to deliver poor customer experiences, and therefore, striking the right balance between human empathy and robotic efficiency is all the more important.

AI has been interweaved with our day-to-day work for decades. Take the banking and finance industry as an example. AI was first commercialised back in the 1980s when the technology was used to predict market trends and provide customised financial plans.

Since then, AI has been increasingly used to automate mundane tasks and reduce the risks of human mistakes in the likes of financial and market analysis.

Fast forward to today, banks and pension funds have incorporated the use of natural language processing (NLP) and sentiment analysis to improve the quality of their customer service. Other financial service providers have saved money by deploying virtual assistants to handle a high volume of enquiries around the clock.

For example, Hang Seng Bank’s AI chatbot virtual assistant HARO and Bank of China and Prudential’s joint offering My MPF Bot have both helped address product enquiries and offer hassle-free services with fast and simple interactions. Where are the other gaps AI can fill in the future?

The engagement capacity gap in the customer service business

The customer service business, which costs US$2 trillion to operate globally, is facing an “engagement capacity gap”: the mounting pressure on contact centres to continuously provide an immaculate customer experience in high volumes across online and offline channels while the number of resources, budget and time costs remain the same, or even experience a crunch.

Also Read: How to stay creative in the age of Generative AI and Web3

Customers today are demanding a higher standard of efficiency in service: they want it instantaneous, and they now have more channels than ever to get it. According to a Frost & Sullivan report, 30 per cent of Asia-Pacific organisations pointed out that providing omnichannel customer service is their top IT challenge, as customers still expect meaningful, personalised and genuine interactions with the option of human assistance when required.

Naturally, generative AI has become front of mind as a solution given the technology’s recent developments. In fact, a recently released study by the National Bureau of Economic Research has found that the availability of AI assistance is able to increase productivity by an average of 14 per cent. Does this mean we can transition all work from a human agent to a chatbot?

Human and bots: Competition or coexistence?

In the customer service business, every minute counts. Being able to save time to summarise a call with a customer means that an agent could take an extra call with another, ensuring they stay happy with your company’s services. AI has so far been commoditised to help agents. The question is then: can AI excel on customer service standalone, or requires a hybrid approach of human and bots?

When AI was first introduced to the financial industry, there was a similar scepticism to today that it would take over jobs, and we have had a lot of learning since then. The key one is that a negative chatbot experience may even drive away 30 per cent of customers as they are not always reliable enough to handle complex questions nor even provide accurate answers. Therefore, we see a hybrid approach as the most effective and could help in the following ways:

• Funnelling enquiries by priority and complexity as the first touchpoint for all customers
• Summarising calls on behalf of human agents to free up their reporting time
• Analysing customer data to provide human agents with context and recommendations background on the customer for appropriate follow-up

Also Read: Harness the power of Generative AI in marketing with the Inmagine CEO

Striking a balance

Despite the efficiencies, the core of customer service is inherently about being human, and AI will not be able to replace that element, especially the empathy and experience required when dealing with emotionally charged situations or complex issues.

Technological developments in automation can enable agents to achieve more in less time, complementing human agents by performing a plethora of mundane tasks. Having said that, the implementation of AI in customer service comes with its own risks.

If not developed with proper oversight and ethical considerations, AI systems can perpetuate bias, discrimination and unfair treatment of individuals. Striking a balance for an effective blend of AI and human empathy is key in the future of customer service.

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Editor’s note: e27 aims to foster thought leadership by publishing views from the community. Share your opinion by submitting an article, video, podcast, or infographic

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e27 has been dedicated to nurturing a supportive ecosystem for entrepreneurs since its inception. Our Contributor Programme offers a platform for sharing unique insights.

As part of our newly introduced ‘Contributor Spotlight’, we shine a weekly spotlight on an outstanding contributor and dive into the vastness of their knowledge and expertise.

In this episode, we feature Darryl Dickens, Founder of Out-Position, a company specialising in positioning and Category Design for tech startups, innovators, and growth-oriented enterprises.

Dickens shares his personal and professional journey in this episode of Contributor Spotlight.

The driving force

A valued contributor, Dickens joined us in April with his debut article. Since then, his contributions have garnered over 4,000 views. His motivation as an e27 contributor is based on his desire to be a part of a thriving startup community.

“I like the e27 community feel and wanted to participate in it. It’s been a really good experience! It feels good to be part of this tribe,” he expressed.

Also Read: How Category Design drives productivity and efficiency

How it all began

Dickens, a former corporate executive, held leadership positions in marketing at both regional and global levels, including a tenure as CMO for a Nasdaq-listed company. His career also included participation in several major acquisitions before he ventured into entrepreneurship, establishing his own company five years ago.

Currently, he collaborates with two or three promising startups annually, working alongside those genuinely committed to establishing a legendary category and company.

The category is the strategy

Dickens’s primary areas of expertise and passion for facilitating this goal include crafting compelling points of view, implementing Category Design, and devising ecosystem strategy and optimisation.

“An increasing number of executives are recognising the pivotal role of their category in achieving overall success. They understand that they have the ability to shape the market and category in their favour,” he said.

Advice for budding thought leaders

Dickens advises, “Read a ton, write regularly, and trust your ability to create something novel and useful for others to read.”

Also Read: Mind the category curve: Are you driving it or will it drive right over you?

Juggling too many things?

Dickens wishes he had known what he knows today during his corporate career! During his off-duty hours, he seeks solace in remote settings where he enjoys activities such as surfing, kayaking, and diving.

“You have to unplug sometimes, exercise and meditate regularly, and spend time with friends and family,” Dickens emphasizes. “This not only enhances your productivity and perspective but also makes you more effective at work.”

Staying in the loop

To stay well-informed, Dickens primarily leverages his personal network and maintains regular interactions with startups and their leadership. He recommends reading the book Play Bigger and visiting out-position.com for a more comprehensive exploration of Category Design.

“Your business and company will always be in a category, so either you define it, or someone else will,” Dickens asserts. “To achieve this, it’s crucial to have a compelling point of view, emphasizing the problem you are addressing rather than leading with your product or company description.”

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Are you ready to be a part of a vibrant community of entrepreneurs and industry experts? Do you have insights, experiences, and knowledge to share?

Join the e27 Contributor Programme and become a valuable voice in our ecosystem. 

The post Spotlighting Darryl Dickens: Shaping success through Category Design appeared first on e27.

In this article, we explore a key theme in Southeast Asia innovation today: embedded finance and its implications for startups in the region.

While the past decade of Southeast Asia’s digital economy was driven by this concept of the “marketplace”, the next decade will arguably be driven by digital finance.

Whereas before, it was all about a meeting of offline supply and demand orchestrated online, moving forward, it will be about ensuring the continued cash flow underlying this supply and demand movement.

How will suppliers be able to keep up with demand for their products, given the speed of digital transactions? How will demand continue to be retained (i.e., their wallets/accounts) on various platforms and continue to be engaged in these consumer experiences?

Fintech revenues, funding on the rise, and embedded finance at the heart of it

Already, we see that venture funding in the last six to eight quarters (post-pandemic), save one, saw finance taking on more funding than commerce or consumer verticals.

But when it comes to revenues, globally, fintechs represent less than two per cent of annual financial services.

This is rapidly changing, however, with revenues projected to grow more than sixfold from 2021 to 2030 to reach US$1.5 trillion. The growth will be concentrated in North America and APAC, with the latter projected to grow 8.5X in revenues. At the heart of it are B2B and B2B2X fintechs, projected to grow 11x and 7.5x to 440B and 285B revenues, respectively.

Also Read: Bridging the gender gap and boosting women entrepreneurship with embedded finance

In Southeast Asia alone, fintechs facilitate over US$320B in transaction value (digital payments, digital capital raising, neobanking) and generate over US$6B in revenue. This aligns with Indonesia seeing fintech growth going from 51 in 2011 to 334 in 2022. Even amidst the funding winter in 2022, VC investments in Singaporean fintech startups reached a peak of US$2.31 billion, up 13 per cent from a year ago.

Open finance and financing innovation: Democratising data and infrastructure

Over the past decade in Southeast Asia, fintechs were developed in response to specific needs, especially around payments (from the customer’s POV) and monetisation (from the fintech’s POV). This eventually expanded to what is called the “unbundling of the bank”.

While this grew the fintech industry in the region, fintechs have remained largely fragmented across markets, applications, and customer journeys. These products have also largely been standalone or plugged into other platforms as separate.

But in recent years, there have been two key developments shifting the way fintechs are being built and approach growth.

First is the emergence of open finance and API/infrastructure adoption across all types of businesses, from SMEs to banks and FIs.

There are companies like open finance pioneer Brankas that have been democratising aggregated API solutions and financial infrastructure access. This enables financial services to be embedded in customer journeys like transportation and healthcare. It also enables more secure and transparent data access and sharing for banks and FIs as they offer new products or partner with other companies to do so.

Regional fintech group Fazz has also been making financial services more accessible to businesses, enabling a wide range of capabilities from linkages to Singapore’s payment system and the issuance of Visa cards for customers to payments with digital assets.

What makes Fazz’s approach more interesting is the group also offers products around business operations management for Indonesian clients, which strengthens their financial service propositions around invoice and purchase order financing.

This marriage of business operations management with financial services leads to the second key development: new forms of data workflows powering financial services.

This is most applicable in business financing, where you have fintechs developing novel approaches to underwriting un-collateralised loans. AwanTunai in Indonesia uses supply chain data through their proprietary ERP system, powering their customer’s backend operations.

First Circle in the Philippines has used revolving invoice financing to make capital more accessible to businesses across different ARR segments (with corresponding lending limits).

Impact of embedded finance on startups in Southeast Asia

The confluence of key data and infrastructure access being developed by fintechs like the ones we’ve mentioned above has meant that the barriers to consolidating fintech use cases and plugging them into digital experiences have gone significantly lower.

For example, Verihubs has tallied around 70 per cent cost reduction on average when it comes to their AI-powered verification solutions, which have largely served financial institutions and fintechs in their KYC processes.

This will impact the way startups (not just fintechs) are built in three ways:

Lower cost to build owned financial services integrated into customer journeys from day one

We’ve seen this with the likes of Carro, with Genie Finance being one of the earliest auxiliary businesses set up. The used car platform’s financing and insurance businesses tie into their AI/ML capabilities as well, for example, through distance-based and behavioural-based insurance premiums.

Also Read: Mergers and acquisitions: Key to building an embedded finance ecosystem

Proptech Pinhome has done this to great effect as well, as CEO Dayu Dara Permata describes on our latest podcast with them:

“Mortgage entry points that are attached to the brokerage home-search journey are right there in the listing…Agent invoice financing is attached to the home transaction that the agent is facilitating. And last but not least, primary project financing is also attached to the developer onboarding journey.”

For Pinhome, in particular, the nature of its ecosystem has allowed it to leverage financial services to retain partners on the supply and intermediary sides of the business.

Clearer pathways to rebuilding the banking stack for personal finance

In a podcast last year, Ajaib CEO Anderson Sumarli talked about how the lines between saving and investing have been blurring. Embedded finance is not only enabling fintech services to be embedded into commerce transactions but also into other fintech services as well. Ajaib’s platform, for example, enables investing in several different asset classes.

Flip’s money transfer platform in Indonesia, especially for small businesses, enables payments for a single business to all its stakeholders: suppliers, employees, and customers. As Flip COO Gita Prihanto shares on our podcast: “Micropreneurs are people who either have home businesses or small businesses as their core income or have another business on the side. And they like to use Flip to make payments to their suppliers and to their employees. Sometimes, they ask their customers to send money through Flip.”

Tonik, on the other hand, has recently launched an insurance product tied to its loans in partnership with Sun Life Grepa Financial.

The Philippine digital bank has also developed ways to “embed” repayments for loans in different channels, as CEO Greg Krasnov describes on our podcast:

“We’re currently working on an additional way for the customers to top up their account and repay the loans specifically, which is Tonik as a biller…We also have a product, our Flex Loan, which makes it super easy for the customer. If they have a salary account, all they have to do is just activate their debit card with us, and we’ll just charge the debit card monthly for them. And then they don’t even have to think; it’s just automatic.”

More fintechs for industry enablers to partner with for financing

This is especially applicable to agriculture, fisheries, and aquaculture.

Indonesian upstream agritech Elevarm provides on-farm facilities for their farmers to access affordable insurance and financing through a pay-later system.

For fisheries startup FishLog, financing has been instrumental in enabling local fish manufacturers to export their goods globally, for example, to the US (the biggest importer from Indonesia) by accessing invoice financing through fintech partnerships. As CEO Bayu Anggara shares on our podcast:

“We help the fishermen to get financing from third-party financing partners that we have. Last year, we disbursed almost US$3 million in financing to the fishermen, connecting them directly with third-party financing partners, including those through our platform…”

What’s the catch of embedded finance?

From products embedded throughout customer journeys to the fintech products embedded within fintech ecosystems and greater access to financial services through embedded partnerships, fintech is indeed increasingly becoming everywhere.

But it is not without risk. A key question moving forward is, what are the risks with embedded finance’s rapid development and roll-up of financial services into all kinds of applications?

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Editor’s note: e27 aims to foster thought leadership by publishing views from the community. Share your opinion by submitting an article, video, podcast, or infographic

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

Image credit: Canva

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