The payment industry is a fragmented one. In Singapore, there are more than 500 payment companies, with some providing just remittance services to major international or listed companies with multiple payment solutions.

The smaller payment companies often focus on just one or two payment solutions (e.g. QR code and/or POS machine for local eateries), limiting their scalability.

Bigger players have the advantage to scale and increasing the adoption rate among merchants. Still, because of an interest to protect their business, the solution is often that of a closed-loop ecosystem (e.g. customers can only use the specific provider’s e-money).

As a result, merchants often have to onboard with multiple payment companies if their business requires multiple payment solutions. This drives up their operation man-hours and costs, which eat up the already razor thin-margin that the merchants have.

Based on the ‘Singapore’s Payment Roadmap’ report, slow settlement speed, cost and security are the major concerns from merchants when it comes to payment solutions.

Understanding the struggles that merchants faced, payment companies nowadays are trying to provide more payment options for their merchants. Most are done via a partnership with other payment companies. This is often termed as Unified Payment 2.0 where payment solutions are unified within a single solution for merchants.

However, it still doesn’t resolve the pain points of having multiple platforms, given that most are done via a partnership with other payment companies, to manage and the slow settlement speed and cost, given that the payment method still revolves around fiat and the traditional settlement method.

Why is it popular

In order to reduce the transaction cost and improve settlement time, one might need to look outside of the traditional payment ecosystem. The existing payment ecosystem is heavily dependent on the conventional payment system which slows down the settlement time and is costly for merchants.

Also Read: Why smart businesses will prioritise smart payments acceptance

In order to solve the pain points for merchants, Digital Treasures Center (DTC), leverages blockchain technology to allow merchants to receive and settle in cryptocurrencies. With blockchain technology, the whole transaction is conducted in a decentralised manner and this helps to improve the settlement time for merchants.

The transaction will go directly to the merchants’ wallets and do not require a third party to perform any settlement for them. As a result, merchants can receive and transfer funds almost instantly. Generally, the transaction cost is lower than the traditional payment mode, when moving cryptocurrency.

Merchants can have peace of mind knowing that DTC is awarded the PCI-DSS Level 1, which is the highest standard for a payment company. Crypto assets received by the merchants are secured by a hardware security module that is state-of-the-art technology.

FIPS 140-2 Level 3 HSM has tamper-evident physical security mechanisms and prevents the intruder with the ability to zero-rise data if an intrusion is detected, rendering all the data in the drive useless to an attacker. For merchants, it gives them the peace of mind that their assets are safe and secure.

Scalability of payment 3.0

At DTC, merchants can experience a unified payment solution, as DTC has obtained the in-principle approval for six of the activities under the Payment Services Act by the Monetary Authority of Singapore (MAS).

This means that merchants can opt for different payment methods (e.g. QR code, e-money, POS, online payment, credit card, cryptocurrency, etc) based on their business needs. All within the same platform.

This allows merchants to better manage and track their funds’ flow to help them improve productivity and reduce overhead costs. Merchants can have the flexibility to mix and use different payment modes in a transaction.

For example, merchants can receive payment from their customers in SGD via online payment, but convert within the DTC dashboard to crypto-assets and send it to their suppliers overseas as payment for goods received. This allowed the merchants to leverage the best transfer methods to reduce the transaction and settlement costs.

With the flexibility to switch and choose a different mode of payment, this could be the start of the revolution in the payment industry or in what we might see as the rise of payment 3.0, where merchants are empowered to choose crypto, cash (fiat), and card all within one platform.

This article was first published on April 6, 2022. 

–

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: leungchopan

The post Can Singapore truly become a cashless society with payment 3.0? appeared first on e27.

There’s no need to explain how online banking changed our lives over the past years. We have 24/7 access to our finances, the ability to pay bills without leaving the house, easily transfer money to friends and family members and even make fast international payments. However, not all markets are equally developed in this field.

Ivitech.Drive has been in the Indonesian market for almost a year now and I perfectly know all the strong and weak spots of this country’s banking sector.

Growing digital banking

According to Indonesia Emas 2045 Road Map, due to inflation and high bank interest rates the total online spending for SEA will grow up to 11 per cent (US$218 billion), and it’s the worst since 2017. However, the development of digital banking in Indonesia is taking huge steps. As of now, it is safe to say that mobile banking is dominating over traditional services. The number of users is growing as well as the Net Interest Income, which is expected to reach its peak in 2024 with US$3.57 billion. 

This would not be possible without Indonesia’s thriving fintech ecosystem with numerous innovative startups. These companies are offering a wide range of services, such as estimating loan risks and lending money to SMEs and individuals.  

Digital banking is helping Indonesians to solve problems that a few years ago were hard to imagine solving. It gives access to finances to rural citizens, therefore expanding the abilities for economic rise and development.

Also Read: 

Even though Indonesia, just like any other modern country has tons of banks, most of them are not client-oriented and offer poor client service. This is exactly why FinTech projects, especially e-wallets, are extremely popular among Indonesians. 

For example, our payment model requires small daily payments for the drivers. After deep analysis and research, we figured out that FinTech instruments, such as Ovo and different e-wallets, are the best fit both for us and our clients. They are user-friendly and constantly developing. I can also note DANA – an easy payment system with over 130 million users. I am personally excited to track their development and growth. 

The number of users of such e-wallets in Indonesia is projected to reach 202 million by 2025 – which is 73 per cent of the whole country’s population. There’s no doubt that the Indonesian FinTech market is going to thrive this decade. 

Of course, banks are seeing this trend, too. We already have new perspective banking sector players, such as Singapore-based Aspire, which is actively expanding to the Asian market and bringing the local client service to a new level. Aspire is a neobank – which means that they don’t have physical locations and provide their services online. 

MSMEs should consider Allo Bank and Jago, which have lately presented several interesting features such as delayed payments of up to 100 million rupees and more. 

Also Read: 

Whats the future

As for predictions, it is absolutely clear that the client-oriented business model is the main trend for Asian banking and financial services for the upcoming years. Users want to be able to have easy and quick access to their funds along with a satisfying user experience. 

The other possible trend is digitalisation. Everything that can be done without leaving the house should be done without leaving the house. Online services would save time spent by clients and money for the bank itself. 

99 per cent of Indonesian enterprises are in the MSME sector – so the strategy of FinTech projects will include development in this direction. Banks and e-wallets will be fighting for rising companies to have them as their clients, and this will lead to creating win-win deals and solutions. It is reinforced by the fact that 99 per cent of the Indonesian economy consists of MSMEs, as well as 60% of the country’s GDP. 

Last but not least – a commitment to sustainability. It is a global myth that South Eastern Asia users are not that interested in ESG initiatives. Based on our experience I can say – the greener, the better. 

–

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: Unsplash 

The post Digital banking in Indonesia: Growing importance and future trends appeared first on e27.

In its latest report on implementing Generative AI (Gen AI) in the banking industry, The McKinsey Global Institute’s estimations underscore the staggering potential this technology holds, projecting an annual value addition of US$2.6 trillion to US$4.4 trillion across various sectors globally. Among these, the banking sector stands out with a potential annual windfall of US$200 billion to US$340 billion, equivalent to nine to 15 per cent of operating profits, primarily attributed to heightened productivity.

However, the journey towards harnessing the full potential of Gen AI is not without its unique challenges.

“For banks seeking to tap this valuable technology, a Gen AI scale-up is in some ways like any other—it requires old-school change management skills, upfront senior leadership alignment and sponsorship, business-unit accountability for results, value-centred use cases, clear targets, and so on. In other ways, a Gen AI scale-up is like nothing most leaders have ever seen,” the report stated.

Firstly, the sheer scope of the task is monumental, necessitating a comprehensive understanding of intricate AI concepts. The sudden immersion of banking leaders into the world of reinforcement learning and convolutional neural networks reflects the urgency to adapt strategically. Management teams must navigate through potential pathways and position themselves strategically to harness the diverse capabilities of this transformative technology.

Secondly, the integration of Gen AI introduces a complexity that disrupts the established balance between business and technology within financial institutions. While advancements such as agile methodologies and cloud integration addressed the historical divide, the prominence of analytics and data as a critical coordination node complicates the operating dynamic. Gen AI demands more profound data and analytics integration throughout the value chain, requiring business leaders to collaborate more closely with analytics experts.

Also Read: Navigating the AI landscape in 2024: Why there is an urgency for enhanced governance

The unprecedented pace of change is the third factor accelerating the urgency of Gen AI adoption. Unlike the gradual shift towards mobile banking, Gen AI tools are swiftly becoming integral to banking operations. The use of AI-based tools by financial giants such as Goldman Sachs to automate labour-intensive processes exemplifies the rapid assimilation into everyday practices. For slower-moving organisations, this accelerated change can strain existing operating models.

Lastly, the talent-related challenges associated with scaling up Gen AI cannot be overstated. Leading banks with established teams of AI experts may have a head start, but others need to bridge the gap through a combination of training and recruitment. The demand for skills such as prompt engineering and database curation necessitates a strategic approach to talent acquisition.

A successful transformation

The report suggests seven steps that the banking industry can take to implement digital transformation with Gen AI successfully:

Strategic Roadmap

Management teams should develop a comprehensive strategic view of where Gen AI and advanced analytics fit into their business. This roadmap should encompass transformative business model changes and tactical improvements, allowing leaders to make adaptive decisions on investment and implementation.

Talent Acquisition

Leaders must personally understand gen AI and invest in executive education to bridge the knowledge gap within their teams. This approach generates excitement and addresses concerns among employees, ensuring a smoother transition.

Also Read: Unlock growth potential with the latest insights on Gen-AI

Operating Model

Rather than a new “Gen AI operating model,” successful institutions should adapt their existing models for flexibility and scalability. Cross-functional teams that align accountabilities and responsibilities between delivery and business teams are crucial for coherence and transparency.

Technology Choices

Carefully considering whether to build, buy, or partner is vital for successful Gen AI integration. Decisions on foundational models, cloud infrastructure, and MLOps platforms should align with the bank’s overall strategy.

Data Management

Given Gen AI’s reliance on unstructured data, banks must reassess their data strategies and architectures. The ability to leverage unstructured data facilitated by Gen AI is a key consideration.

Risk and Controls

With the boost in productivity, Gen AI introduces new risks, necessitating a redesign of risk- and model-governance frameworks. Banks must proactively develop controls to mitigate potential challenges.

Adoption and Change Management

A well-thought-out application can stall without effective change management. Encouraging employees and customers to embrace Gen AI requires careful design, addressing comfort levels and ensuring clear executive support.

As the banking industry embarks on the journey of scaling Gen AI, the successful navigation of these seven points will be pivotal in unlocking the full potential of this transformative technology. While challenges abound, the promise of enhanced productivity and profitability propels the industry towards a future where gen AI becomes an integral force in shaping banking operations.

—

Image Credit: RunwayML

The post Gen AI in banking: How to ensure a successful transformation for an age-old industry appeared first on e27.

Credit serves as a global economic engine, yet it remains frequently misunderstood. Over 70 per cent of worldwide economic transactions rely on credit, and over 95 per cent of our daily currency circulation is generated by the banking system through credit.

The digital era has underscored the need to reevaluate the current credit paradigm due to its complexity, costs, and challenges in financial inclusion. With 3.8 billion adults globally lacking access to banking services and a significant shift in customer expectations driven by digital-native generations, there is a growing demand for innovative credit solutions.

Fairtile addresses these challenges as a credit intelligence and automation platform, developing a modern hybrid multi-cloud solution. Founded in 2016 by Corrado Giannasca, Cristiano A. Motto, Giuseppe Riccardi, Guido Ferrari, and Olle Ahnve, this Italian fintech startup leverages big data, human science, and AI to deliver real-time intelligence and automation at scale.

Product portfolio and innovation

A B2B company, Fairtile focuses on enabling financial inclusion and sustainability through its credit intelligence and automation platform, employing data and AI to assist lenders in making informed decisions and optimising their processes.

The solution aggregates millions of data points from various sources, including devices, digital footprints, open banking, SME systems, etc. Adhering to the European Union’s (EU) General Data Protection Regulations (GDPR), the platform creates a comprehensive 360-degree customer view, enhancing decision-making with advanced AI algorithms. The solutions cover credit scoring, fraud prevention, Environmental, Social, and Governance (ESG) rating, and debt collection.

Its account receivables automation solution, Debbie, engages debtors through a versatile conversational interface across multiple channels (voice, WhatsApp, SMS, email, chats) and facilitates payments through an embedded gateway. This allows debtors to choose their preferred payment method and complete transactions digitally during the conversation.

Also Read: Is fintech in SEA changing its focus for further development?

“We are developing a secure, generative AI virtual agent powered by a large private language. To meet the needs of enterprises, Fairtile acts like a subject matter expert assistant who is always available, learns over time, and finds the most relevant information to better service customers or automatically resolve problems,” said Motto, CEO and Co-Founder.

He added, “Usability and interface models are key. We are creating a virtual agent architecture that provides a variety of interfaces for smart conversations. This includes an open smart virtual agent API set that can be used by customers or partners to construct bespoke interfaces. Other interfaces under consideration include a plug-in virtual agent widget for quickly accessing agent-side and back-office applications.”

Fairtile’s three-tiered SaaS revenue model

Fairtile operates on a SaaS revenue model, which has remained consistent since its inception. All solutions are delivered to customers through an API layer.

The model follows a three-tiered structure, offering various price points for different solutions.

• Set-up fee: A one-time fee during the account registration, ensuring regulatory compliance with segregated towers in the infrastructure.
• Service fee: All solutions operate on a SaaS model, with a standard price per request as the service fee. Customers are charged a standard fee each time they utilise our APIs.
• Annual fee: This fee covers annual maintenance, ensuring the customer receives the required SLAs. Different organisations may require varying service levels.

Custom packages are available for specific customers with unique needs or high-volume requirements.

“We trust the best way to serve our customers is to provide them that maximum result with the minimum effort. We have designed our solutions to ensure a seamless and frictionless integration that does not require heavy and complex implementations on their side,” added Motto

Growth and partnerships

The company began its journey before the COVID-19 outbreak, initially self-funded with contributions from co-founders and support from Betacom, an IT company in Italy, Switzerland, and Germany.

“We survived with no funding or debts, just with our revenues and robust and smart management. 2022 has been the year of the restart. We have signed the co-development and commercial partnership with Experian and revamped our growth. The validation of our solutions with the Bank of Italy, the partnership with Visa and new customers have brought us back to the position to run a round on the market,” Motto said.

Also Read: Navigating the gender divide in the Southeast Asia’s fintech landscape

A few weeks ago, the company announced an investment from Intesi Group, a leading company specialising in onboarding solutions.

The firm is currently in the midst of its fundraising round. It seeks 5 million EUR in funding on 20 million EUR of valuation, with a portion already secured, to support its expansion in the Europe, Middle East, and Africa (EMEA) and the commencement of operations in APAC. The flagship office in Singapore was launched at the end of 2022.

As much as 60 per cent of the investments will be allocated to structure, operations, and technology, while 30 per cent will be utilised to strengthen marketing and sales through resources and activities across EMEA and APAC.

Fairtile also participated in the Global Startup Programme organised by the Italian Trade Agency and the Ministry of Foreign Affairs and International Cooperation.

“Throughout our journey, we’ve always valued building partnerships for success. We’re creating a strong network of digital credit solutions by partnering with various organisations and institutions to push the boundaries of technology in the credit sector.”

Fairtile is concentrating on sustainable finance and ESG for their next solution.

The fintech sector, acting as the primary driver of the global economy, is at the forefront of structural changes. Fairtile positions itself as a leader in addressing the evolving needs of the financial services sector, contributing to growth, risk mitigation, and regulatory compliance through a focus on sustainable finance and ESG.

—

Fundraising or preparing your startup for fundraising? Build your investor network, search from 400+ SEA investors on e27, and get connected or get insights regarding fundraising. Try e27 Pro for free today.

Image credit: Canva

The post How Fairtile navigates the fintech frontier with credit, code, innovation appeared first on e27.

With the rapid evolution of technology, the increasing rate of electronic waste (e-waste) has become a growing concern for our planet. As gadgets and devices evolve at an astonishing pace, the issue of responsible e-waste management has emerged as a pressing global challenge. The short lifecycle of many electronic products, driven by consumers’ desire for the latest and most advanced technologies, contributes significantly to the escalating volume of e-waste.

Improper e-waste management often involves the export of electronic waste to developing countries, where unsafe recycling practices further exacerbate health risks for local communities. As the digital landscape continues to expand, addressing this challenge requires collaborative efforts from different stakeholders including governments, industries, and individuals to implement effective policies, promote sustainable design, and raise awareness about the environmental and social impacts of irresponsible e-waste disposal. By fostering a culture of responsible consumption and recycling, we can strive towards a more sustainable and environmentally conscious approach to technology in the 21st century.

Also read: Unlock growth potential with the latest insights on Gen-AI

As such, the Youth E-Waste Ambassador Program (YEAP) to tackle the escalating issue of electronic waste and promote environmental responsibility among the youths in Singapore. By fostering a community of Youth E-Waste Ambassadors, the program aims to create a ripple effect, inspiring broader societal change towards conscious consumption and responsible electronic waste management. YEAP stands as a beacon for empowering the next generation to become stewards of the environment, cultivating a community where sustainability is not just a concept but a way of life.

With an initiative of such magnitude, Carousell, a multi-category classifieds and recommerce marketplace platform, is partnering with YEAP to address challenges in the e-waste space. “The Youth E-Waste Ambassador Program is a great initiative. “The program’s advocacy for reducing e-waste and promoting sustainability aligns with our mission to make secondhand the first choice and aim to advocate for a circular economy. We hope that this programme can show more people how easy it is to participate in the circular economy and take steps to reduce e-waste without drastically changing their shopping habits,” shared Jane Ng, Category Director for Mobiles at Carousell.

Sustainability at the heart of Carousell

With the company’s nature as a platform for reselling products, sustainability is encoded in Carousell’s DNA. “We constantly try to reach out to the youths so that they are increasingly aware of how they can contribute to sustainability through buying and selling of secondhand devices as part of their lifestyle,” explained Ng.

The company believes that the traditional linear economy’s ‘extract-manufacture-buy-use-throw’ approach rapidly exhausts Earth’s limited resources, intensifying environmental issues. This is why Carousell aims to disrupt this cycle by promoting the adoption of a circular economy and facilitating secondhand transactions. “Our users, by buying and selling secondhand items, extend the product life cycle of still-usable products. This conscious choice reduces the need for similar new items, decreasing the demand for fresh production, helping to conserve our planet’s finite resources,” explained Ng. “This extends beyond e-waste management but across all products, where we want to encourage more people to think about selling or giving away items they no longer need and to buy secondhand items where possible,” she added.

Dedicated to making secondhand the preferred choice, Carousell’s mission revolves around encouraging more individuals to actively participate in the circular economy. Carousell has introduced two innovative programs this year, namely Sell to Carousell Mobile and Carousell Certified Mobile, to enhance the trustworthiness and convenience of buying and selling secondhand mobile phones.

Also read: Taiwan tech companies eye regional expansion in Southeast Asia

Sell to Carousell Mobile caters to busy sellers or those seeking a hassle-free way to sell their phones directly to Carousell for cash. Through a user-friendly app interface, individuals can receive an estimated offer for their device, opt for doorstep pick-up, or choose to drop off their phones at partner stores across the island. The process leverages Carousell’s AI diagnostic tool and smart pricing algorithm to ensure transparency and efficiency, minimising the potential for human error that often accompanies traditional methods of selling used mobile phones.

Subsequently, devices sold to Carousell undergo a rigorous 40-point inspection at their diagnostics centre, including data erasure for secure wiping. These thoroughly inspected and sanitised devices are then listed on Carousell Certified Mobile’s official store, providing buyers with the assurance of quality and authenticity. Each purchase is accompanied by a free 1-month warranty, extendable to 24 months, and a 7-day money-back guarantee ensuring a reliable and satisfying secondhand shopping experience.

“Impactful change starts from small incremental steps and adjustments to our lifestyle habits. Rather than leaving old devices in drawers at home, think about selling or giving away these electronic items. This small change doesn’t just cut down on e-waste; it also grants these products a new life with new users, reducing their environmental footprint,” shared Ng.

Youth at the forefront of the sustainability movement

The Youth E-Waste Ambassador Program is an initiative that perfectly aligns with Carousell’s goals, resonating with the broader mission of encouraging sustainable practices and aligning seamlessly with the commitment to prioritise secondhand options in the journey toward fostering a circular economy. 

The hope is that this innovative program can effectively demonstrate to a wider audience the simplicity of participating in a circular economy, emphasising that individuals can take meaningful steps to reduce e-waste without undergoing drastic alterations to their everyday shopping habits. By showcasing the feasibility and impact of such initiatives, the program seeks to inspire and empower individuals to play an active role in creating a more sustainable and environmentally conscious future.

Also read: Bridging Japan and Southeast Asia’s tech landscapes through the ME Innovation Fund

“The role of Singaporean youth is vital in addressing our country’s e-waste issue. We see a growing shift in environmental consciousness in our region among young consumers, favouring sustainable products. Additionally, with the rise of social media platforms, younger generations feel empowered to express their views and build community with like-minded youths to discuss pertinent issues,” explained Ng.

She added, “This presents a valuable opportunity to tackle important matters like reducing e-waste. Besides starting conversations and raising awareness, impactful change can also start with small steps. For example, making secondhand items the preferred choice while shopping creates a win-win situation, offering financial benefits while positively impacting the environment—a step toward a more sustainable planet.”

Carousell’s collaboration with YEAP is a testament to their commitment to sustainability and responsible e-waste management. It’s a succinct narrative that sparks inspiration for change at both individual and industry levels. Carousell and the youth of Singapore are collaboratively shaping a sustainable future, and their partnership with YEAP stands as a pivotal milestone in this inspiring journey.

For more insights on e-waste, and updates on upcoming programs and activities, follow YEAP on Instagram and Facebook.

To learn more about Sell to Carousell Mobile, click here.

– –

This article is produced by the e27 team, sponsored by YEAP

We can share your story at e27, too. Engage the Southeast Asian tech ecosystem by bringing your story to the world. Visit us at e27.co/advertise to get started.

The post Carousell partners with YEAP to address challenges in e-waste appeared first on e27.