On Call with Insignia is back with a new season of conversations with founders, investors, and operators leading the development of Southeast Asia’s innovation landscape and digital economy, or as we like to call, ASEANnovation.

What better way to kick off our season four than with Brankas, Southeast Asia’s leading and pioneering open finance tech company. We’ve just welcomed them to the Insignia family officially at the start of 2022 with the announcement of a 20 million series B round which we had the privilege of leading.

Founded in 2016, Brankas is the leading open finance technology company in Southeast Asia. We provide API-based solutions, data, and payments solutions for financial service providers (like banks, lenders, and e-wallets) and online businesses. Brankas partners with banks to build and manage their open finance infrastructure, producing APIs for real-time payments, identity and data, new account opening, remittances, and more. With Brankas’ secure open banking technology, online businesses, fintech companies, and digital banks can use Brankas APIs to create new digital experiences for their users.

To talk about, not just Brankas, but also this whole wave of demand for more robust and scalable fintech infrastructure, we have really an open finance pioneer and an expert here to talk about all of that, none other than the CEO and co-founder of Brankas, Todd Schweitzer.

Join Brankas’s remote-first team by checking out open roles on the company’s career page and LinkedIn. 

Highlights and Timestamps

1. 00:28 Paulo introduces Brankas and Todd;
2. 02:24 Todd talks about how he connected with Insignia; “…in the last couple of years, fintech has really woken up in the Philippines…”
3. 03:04 Going from management consulting in the US to starting Brankas in Southeast Asia; “We realized it’s actually a much bigger problem than we even knew, and that it’s not simply a merchant problem. It’s not simply a consumer problem, but it’s actually a bank infrastructure problem.”
4. 08:33 Why open finance is compelling and exciting for emerging markets; “So by enabling open finance, you’re changing the economics of serving that population so that it actually becomes, from the bank’s perspective, profitable to serve [underserved] populations.”
5. 12:25 How Brankas’s API menu approach stands out; “We provide access to a menu of financial services [and] bank integrations…then your embedded finance problem is solved and you, as an early-stage company, [can] move on to addressing your customer problems.”
6. 15:22 Working with regulators and institutions in Southeast Asia; “Our approach is being as helpful as we can possibly be to the regulator.”
7. 19:42 Four use cases for open finance; “As we think beyond open finance to banking-as-a-service, Brankas’s API menu is going to build out to actually more product APIs so that fintechs, e-commerce companies, and others can actually offer a menu of fintech solutions to their customers.”
8. 24:18 Approach to regional expansion; “Where we are most excited is fast-tracking development of the fintech ecosystem because our customers are the next generation startups and businesses that are going to be building fintech solutions.”
9. 25:37 How building out a remote-first team has led to finding great engineering talent; “How we approach [hiring] from a first-principles point of view is we want to find the best talent in Southeast Asia that can serve the whole region. For us to have maximum flexibility to find the best people we need to be looking outside of a single city, it’s a false limitation.” 
10. 28:09 Open Finance for DeFi; “In the same way that Brankas is simplifying and abstracting away all of the different steps to access traditional financial services, we are building tech and tools to do the same for DeFi.”
11. 31:09 Rapid Fire Round;

About our guest

Todd Schweitzer is co-founder and CEO at Brankas, the leading Open Banking technology provider in Southeast Asia. Todd has held senior roles in private equity and management consulting, spanning technology, the public sector, and financial services. Todd and co-founder Kenneth Shaw launched Brankas in 2016 to address the technology gaps that hindered fintech-bank partnerships. Launching first in Indonesia, Brankas provides Open Banking technology to banks, insurers, mobile wallets, alternative lenders, and other suppliers and users of financial services APIs. He holds dual Bachelor’s degrees with honors in Economics and International Studies from the University of California, Irvine, and a Master’s in Public Policy from Harvard University’s Kennedy School of Government with a focus on economic development policy. 

Transcript

Paulo: Todd, welcome to the show. How have you been doing?

Todd: I am. Thank you, Paulo. [I’m] really great, and honored to be on the show. I’m really excited to be part of the Insignia portfolio and be among some really successful startups in Southeast Asia. And thanks for having me on. I’m based in the Philippines, although Brankas is a remote-first company. In fact, my co-founder is based in Jakarta and our CPO is based in Singapore and our head of finance is based in Mumbai. And so… 

Paulo: …Just gotta have all those tech capitals covered, I guess… 

Todd: Right. We’ve actually been remote from day one, but I’ve been based in the Philippines for about seven years and it’s a great vantage point. Both because our Philippines business has been taking off, but also because, especially in the last couple of years, fintech has really woken up in the Philippines and I’m sure Insignia has observed that. You’ve been participating in the wave of startup growth [here]. It’s fun to see that vantage point, for the Philippines to kind of wake up, as a customer of financial services in the Philippines [as well].  

Paulo: We’ll definitely have a lot to talk about, in terms of the Philippines as well, not just, open finance, but a little bit on Todd before I move on. Prior to founding Brankas, he had senior roles in PE and management consulting, spanning technology, public sector, and financial services, of course. He and his co-founder, Kenneth, who he mentioned is in Jakarta, launched Brankas in 2016, to address the tech gaps that hindered fintech bank partnerships. To kick things off, I just want to let our audience know as well, how did you connect with Insignia, if you could share a little bit on that?

Todd: Yeah, I’ve known Yinglan — I don’t think he remembers this, but we first met at a conference, either Tech in Asia or one of these in — it probably was 2018. So I’ve been aware of and admire what the Insignia team has built. And then I also knew Samir Chaibi, one of the principles of Insignia, at his previous company. And so I’ve known some of the members of the Insignia team I’ve met just as kind of being in the startup world in Southeast Asia. So Insignia has been on [Brankas’s] radar, and it’s great that timing aligned really well in the series B and thrilled that we made this [happen]. 

“…in the last couple of years, fintech has really woken up in the Philippines…”

Origins of Todd’s Journey to Southeast Asia and Brankas

Paulo: So let’s dial it back a little bit, coming from your career, what made you decide to land yourself here in this region in particular, and Kenneth, you know, really work on open finance, and were there any external factors that influenced that decision?

Todd: Yeah. Kenneth and I actually went to university together many, many years ago, in California. He was and is a computer engineer and was in the computer science program. I was on the economics and social sciences side. But we knew each other and I was always impressed because even while we were in college, Ken co-founded an online payments processor. 

“The fun thing about working in emerging economies”

This was in the early 2000s when e-commerce was really starting to take off, and when credit card online transactions were still considered a high-risk transactions. So actually a lot of banks would not process online credit card transactions. So he ended up coming out to Asia, basically after graduation, again, [this was the] early 2000s. I was in the US as a management consultant, then [went to] grad school at Harvard, and then, out to Asia in 2015 and [this was because of] a mix of circumstances. 

I think part of it was, I was eager to work in emerging economies. Again, I’d been doing three years of consulting out of New York, which was a lot of fun but also the projects [were] a lot of optimization type projects, and the fun thing about working in emerging economies or fast-growing kind of developing economies is it’s very chaotic. It’s very messy, it’s very uncertain, but it’s very growth-oriented and there’s a huge chance for impact if you’re identifying and solving problems.

So I’d worked a bit in Latin America and elsewhere, and some circumstances lined up professionally and personally. One of the main triggers was the partner of my consulting firm who was covering Southeast Asia, running Southeast Asia and covering the public sector practice, invited me to transfer and we had been discussing a secondment or like me coming out for a project. 

But when he finally called me, I had just been promoted to manager. He said, “Congratulations, there’s actually a role for you, but this is not a secondment. This would be a transfer. [You have three weeks to decide.” And so, [I] very quickly had to decide how serious I was and I went for it. That [transfer] was originally to Kuala Lumpur, Malaysia, but again, [in the] management consulting world, you’re kind of traveling usually around the region on a variety of projects and industries. 

So [I] did that for an additional year in Southeast Asia, kind of looked around as one should do on kind of the path to partner, and took some interviews and got a really interesting offer to join a fund, a family office based in Manila. The role was partly looking at technology deals in the region and part of it was helping to run one of their portfolio companies, which was a mobile and telecom software business that was in a pretty mature market. So business was slowing down, still mega profitable, but it was time to build some new green shoots and some new business units out of it.

So [I] had a really interesting time and a pretty steep learning curve, as you can imagine, shifting from consulting to operator, but [I had] the chance to look at and have a view across Southeast Asia’s early-stage tech deals. [It] got me really excited about the possibility of building something from scratch, and [I began] fantasizing about what it would take and how we would do it.

One of my first phone calls was to Ken, my now co-founder because he’s been in the region now for 15 years. He used to live in Manila before he lived in Jakarta. And so I called him just for developer recommendations and I said, “Hey man, you used to live here. You’re [a] top software engineer in the region, do you [know] some people based in Manila that you would recommend as I’m thinking about starting something,” and he said, “Sure, absolutely, but what do you have in mind?” Because little did I know he was also kind of freelancing at the time.

It’s funny how this timing works, right? I mean, we had met 15 years earlier and then it turns out we’re both in Southeast Asia. We both have roots here now, and the timing [aligned] professionally as we were both thinking about starting something. And so we worked through a couple of options. 

“It’s not just a consumer problem, not just a merchant problem, but a bank infrastructure problem”

Now, open finance. This is 2016, so open banking in Europe was being discussed, but open banking as a regulatory mandate, as a set of required infrastructure in the industry in Europe didn’t take place until 2018. I didn’t even know the term open banking or open finance. All we were trying to tackle was a very obvious friction point. We saw that everyone was paying by bank transfer and that in order to apply for a loan or build a credit profile you needed to send [the] payment [and] send a [screenshot of the] deposit to the merchants’ account. You send a screenshot of your deposit, or if you’re applying for a loan, you need to print out your bank statements and send your bank statements. And all of this should be done digitally and ideally can be done through an API so that I can authorize in real-time sharing of data, sending of a payment, [and] doing identity verification.

And then we realized it’s actually a much bigger problem than we even knew, and that it’s not simply a merchant problem. It’s not simply a consumer problem, but it’s actually a bank infrastructure problem. And in 2018 we had the first banks come to us saying, “Hey, Brankas, we heard that you have some expertise in financial services API, can you actually help us develop APIs as products? And so that started a journey of building open finance infrastructure, not only to serve startup and FinTech and merchant use cases, but also to help the banks themselves, those that do want to tech up and launch APIs as a new product [and] to be able to do so in a standardized, rapid way. And so that’s how we got started. 

“We realized it’s actually a much bigger problem than we even knew, and that it’s not simply a merchant problem. It’s not simply a consumer problem, but it’s actually a bank infrastructure problem.”

Open Finance 101

Paulo: One thing I wanted to note from your response earlier was that, while open banking is a relatively new term, the roots of these issues go back, say like 20 years, when Kenneth was working, trying to drive adoption for credit card payments. It’s still the same issues, and now they’ve just evolved. And now obviously the solution has evolved as well, so maybe you can break down that value proposition for banks.  

“This is not a banking movement per se. It’s actually broader than banking.”

Todd: First off a quick definition because [the term] open finance is thrown around. So I use the term open finance, not open banking because actually a lot of the innovation in Southeast Asia is not only [around] banks. It’s also the non-bank financial service providers like e-wallets, remittance companies, payment processors, non-bank lenders that are actually developing APIs [and] developing some of this infrastructure.

So I think this is not a banking movement per se. It’s actually broader than banking. The reason why open finance matters is you’re decoupling what a bank does from where the customer can access the bank’s products. Now in a non-digital world, it doesn’t really matter because you’re going to a bank to access a bank product. 

But in a digital world, oftentimes you don’t even want to use the bank app, you just want to access the financial product when you want to use it. And when you want to use it might be at an online store point of sale. If you’re applying for a loan, you want to get the loan when you’re actually purchasing the thing that you want, which is obviously leading a lot of the growth of this buy now pay later or even things like vehicle financing, where, at the point of purchase, you can actually apply for and get approved for credit, rather than taking the documents, going to the bank and then going through the prequalification process and all that.

Changing the economics for banks to serve emerging markets

So if I were to give a definition of open finance, it is allowing third parties to securely access and provide financial products to the customer. Most banks and especially larger traditional banks are not in the business of building software. They’re in the business of managing risk, managing deposits, loans, and treasury, and following rigorous compliance, and that is what banks do. 

Building software is very different from that. It makes logical sense that eventually, you should decouple the bank’s product from where the customer accesses that product. I’m not talking about lead generation, [where you] sign up here, and a customer service rep will call you. I’m talking about actually accessing and using a bank’s product on a third-party app, which could be a fintech, an e-commerce site, or it could be something else, through a piece of software that’s actually designed for me as a customer or for my use case rather than the bank saying we built the thing and you have to use the thing. 

That’s I think what’s exciting and that’s particularly relevant in Southeast Asia because you have such an underserved population. A big part of the reason that 50% of Filipinos are unbanked and 40 something percent of Indonesians are unbanked is that the larger institutions have done the math internally, and they say, “There’s not a business case for serving the mass market population or the SME population, especially in Indonesia and the Philippines because they’re island nations.” 

So for a bank to serve an island province, that means having not just the branch, but physical cash, staff, internet access, and reliable electricity access. And this all sounds like logistical headaches to a bank and they say, “Ah, well, instead of putting a dollar into acquiring what is basically a poor population in an island province, we might as well just sink it into corporate lending business here in Metro Manila or in Jakarta.”

So by enabling open finance, you’re changing the economics of serving that population so that it actually becomes, from the bank’s perspective, profitable to serve that population. In fact, they can provide API so that the population can have access to apps or products that are designed for them. And it allows third parties, which could be a smaller bank, a non-bank, or e-wallet, a remittance company, or a non-bank lender to serve that population instead.

“So by enabling open finance, you’re changing the economics of serving that population so that it actually becomes, from the bank’s perspective, profitable to serve [underserved] populations.”

Paulo: And I think that decoupling reminds me of the adage or saying that these days, every company is becoming a fintech company, and Brankas is certainly making that possible. But I’m also curious to know, given that there are a lot of fintech companies that are also tackling this in many different approaches, how does this API approach and practices approach in particular sort of stand out, and make a difference here in the region? 

Addressing startup risk in working with bank data and APIs

Todd: I’m glad you asked that question because there’s an important distinction. And I agree with you. I mean, if you’re an online business, you’re either collecting payments, dispersing funds, managing your inventory, or managing your cash. You’re probably using fintech. And what we’re seeing now is that there are more and more business models where companies are actually collecting a small payment fee or charging a commission on loans that happen inside their platform, even though they’re not a lending business. But they can offer this platform model. 

So as more and more of these use cases come, we are helping them more easily plug into the financial service providers that are actually underwriting the financial product. So if you are a seed-stage startup today, you have a couple of engineers. You have very limited resources. You’re trying to build an MVP. Chances are, as you point out Paulo, more and more, you as the seed stage startup, you need to plug into financial services because that’s part of your business and part of your value proposition to customers. And so you have this limited set of engineers, and you have limited time because the clock is ticking on your cash and you need to raise funds in order to grow.

Do you put that time into setting meetings with the banks going through the process for seeing if they have APIs available for your use case, going through a risk assessment, negotiating on commercials and how much volume you [can] bring and do you have to provide a revenue commitment? Maybe you’re not ISOcertified. Maybe you’re not PCI DSS certified, because the bank’s approach is a risk management approach.

So if you’re five guys in a garage coming to a bank saying, “Give us access to your API to allow your customers to do stuff on our app.” That sounds like a super risky thing to the bank. That’s number one is so it might take months and months, or it might be impossible for an early-stage company to have direct access to a bank API.

Freeing up startup engineering capacity to focus on what matters

Number two, it is probably not the best use of the engineer’s time, because if they’re building an app for a specific customer type, they should be building it for that customer, [and] not necessarily figuring out what sort of legacy backend core banking systems they need to plug into, and so that’s where Brankas comes in.

So we provide access to a menu of financial services [and] bank integrations, for payments, for data, for identity verification, even things like card issuance and account opening, through a single API and a standardized API that basically you can integrate in a day or so. Then your embedded finance problem is solved and you, as an early-stage company, [can] move on to addressing your customer problems.

Reducing friction for MNCs to plug in financial services across markets

Now, if you’re a large regional company, the benefit is you want access to a provider that can reliably serve you at scale across multiple markets in the region. And we’re really the only open finance technology company that has access and integrations with most major banks in the region through a single integration that’s designed to be multi-currency and compliant in multiple countries. So we can serve the largest tech companies at scale and reliably. 

“We provide access to a menu of financial services [and] bank integrations…then your embedded finance problem is solved and you, as an early-stage company, [can] move on to addressing your customer problems.”

Leading the Open Finance Revolution in Southeast Asia 

Paulo: Speaking about multicurrency, regulatory compliance and all that, a large part of that is definitely being able to work closely with the regulators and some of these financial institutions. So what has been Brankas’s approach over the past five, six years to really build that trust [with institutions and regulators]. Maybe you can also share your thoughts on how regulators have evolved in terms of their outlook on open finance.

“Open finance in Southeast Asia is a work in progress from the regulators perspective.”

Todd: I need to start by saying that open finance in Southeast Asia is a work in progress from the regulators perspective. So most of the financial regulators in Southeast Asia are at the stage where they are developing the guidelines and the first version circulars, papers, and roadmaps that will set a plan for developing the regulations later on. In other words, this is still mostly unregulated industry, although most of the regulators, I would say, have timelines. And they are in the process of determining the kind of open finance regulatory regime they’re going to put into place.

And that is a challenge and an opportunity. It’s a challenge because the financial institutions that we work with, their compliance and IT teams, prefer to have certainty one way or another from the regulator. And so often with new tech or a not yet clearly regulated industry, they want to have some clarity on, basically what’s inbounds and what’s out of bounds.

Now what I really appreciate about regulators, particularly in the Philippines and in Indonesia, is they’ve moved fast to put out guidelines. In the Philippines, that’s the open finance circular. In Indonesia, that’s Bank Indonesia’s 2025 open banking roadmap. The visual in my head is a fence. They haven’t defined what’s inside the fence, but they have the perimeter defined. Now when we are working on new API products that are very new to a bank’s compliance team we have some documentation from the regulator that says, here are the IT and industry standards and operational and reporting expectations that will be coming. So let’s start already with a pilot. And as the regulations are more defined, at least the bank won’t have to backtrack, so that I think is a good thing. 

Not the cowboy approach

The other is, the approach that Brankas has taken is, not the cowboy approach of, “Do it and we’ll face the regulator if and when it becomes a problem.” I think from day one, we’ve been very transparent, black-and-white with the regulators, and this is not just with the central banks and the financial regulators. It’s also [with organizations] like the national privacy commission in the Philippines, which is a dedicated data privacy watchdog that makes sure that customer data is protected and being handled securely across industries. In Indonesia, data handling and authentication is covered across bank Indonesia OJK and Comminfo the IT ministry. So I think really across the region, the regulators have been really receptive.

So our approach is being as helpful as we can possibly be to the regulator, and show that [open finance] is not a boogeyman. They have the benefit of case studies from other countries. We are participants in case studies in other countries and sharing that knowledge has been really helpful. We try to share our experiences of what’s happening in other countries, not just in ASEAN, but outside of Southeast Asia, for example, the open banking lessons learned, good and bad, I would say, coming out of Europe, as well as interesting open banking regimes in the Middle East now.

Late last year I joined as the director of the Open Banking Exchange in Asia and the open banking exchange or OBE is basically the large industry association for open banking FIs, technology companies, service providers, aggregators in Europe. There’s been a lot of effort with the MAS in Singapore and with the World Bank to set up OBE operations here so that the industry can come together and share these best practices in a more formal way. So I’m excited to be participating in building the Open Banking Exchange in Asia and that’s good for Brankas. It’s good for Brankas’s competitors, and it’s good for consumers that would benefit from an open finance ecosystem here, but someone needs to basically push that rock up the hill to come to some agreement within the industry and also share case studies with the regulators to speed up adoption. So that’s a big part of what Brankas does. 

“Our approach is being as helpful as we can possibly be to the regulator.”

Paulo: Hopefully that rock doesn’t roll down the hill, and you guys can just keep pushing it forward. And I mean, that’s evidenced by the fact that Brankas is the first in the region to launch a backing as a service API for account opening credit card issuance and also one of the first approved financial API service providers in this new open finance pilot here in the Philippines. And speaking of really changing the consumer experiences across not just fintech, but across different kinds of digital transactions, what are the interesting use cases that you’ve seen and how have they evolved in terms of the APIs that you offer now?

Use case 1: Sharing (data) is caring 

Todd: So there are two obvious ones, and then there’s a lot of really interesting, less obvious ones. 

So the two obvious ones are our bank statement data for credit scoring. What’s interesting is that in the US or Europe, there’s what’s called the AISP model. So account information service providers are basically sharing my bank account data so that I can see all my accounts in one place that’s used for budgeting apps and accounting apps. 

And it’s a very nice to have feature, but in Southeast Asia, it’s actually fundamental to credit scoring for an alternative lender for a digital bank, even for like a credit card issuer, to determine what your credit limit is, or for a buy now pay later company to determine kind of what credit tier you can go into. So statement data is one because even if it’s uploading a PDF or sharing your printed bank statements, that’s data that could have been tampered with. So sharing verified data directly from the institution to the data recipient is really valuable.

Use case 2: Nobody needs no (middle)man for payments

Number two is payments. So 80%+ of online payments in Southeast Asia are bank transfers. And by bank transfer, I mean depositing into the merchant or your counterparties account and sending some kind of confirmation that you made the deposit. And then typically the counterparty is then reconciling and checking, then you show your screenshot and all this. Because this is a population, where e-wallet penetration is expanding but really it’s bank transfers that are powering the online economy, there are a lot of payment companies and a lot of payments startups that do various versions of intermediating or being a middleman to a bank transfer payment. 

If you kind of take a step back, it’s a bit silly because if what I’m trying to do is just move funds from bank account A to bank account B, I shouldn’t need to go through a middleman in order to get a bank account B as long as I trigger a secure debit instruction here and credit instruction there using the payment rails that exist in the country. 

That’s the second use case, and that could be for e-commerce payments, that could be for e-wallet top-ups, that could be for neobanks that don’t have any branches. So another Insignia portfolio company, Tonik bank, uses Brankas to allow their customers to pull funds from other banks into their Tonik account, all within the Tonik app. So as a Tonik customer, I can open my Tonik account, and then I can immediately link my other bank accounts and then pull funds in to fund my account, basically in just a few minutes. And that’s something that wouldn’t be possible if you didn’t have an API aggregator providing those bank transfer APIs. So those are the two main use cases. 

Use Case 3: Say Verify my name

Paulo: Now less the obvious ones.

Todd: [Right], a big one is I think that’s identity verification and KYC. So in Singapore, you have something called Singpass, which is very convenient. And it’s basically a national ID that takes the form of a login with a username and password, which you can use to log into government websites. You can log into your bank using Singpass, you can log into other sites, and it works just like login with Google or login in with LinkedIn and other websites. 

In a market like the Philippines, Indonesia, Vietnam, even Malaysia and Thailand, you don’t have this national identity verification. But the onboarding process for a new technology product and particularly fintech is a super high friction process. I was talking to a fintech founder the other day, he had an 80% drop in conversion because he has to do very minimal KYC onboarding on his customers. And they disappear because the photo ID of the scan didn’t upload correctly or because they lost interest, there was a lag, and so they drop off and that’s so many potential customers who disappear just because of a friction user experience. 

Paulo: And it’s not even because of the product [itself]! 

Todd: Correct. So if I log in and register to a new software product using my online credentials from a bank or an ewallet or somewhere else, that’s already verified. That can be super powerful. 

Use Case 4: Banking-as-a-Service

For the other non-obvious use cases, you are drifting from open finance into banking-as-a-service where you can do things like actually opening an account, a retail savings account, which could be white-labeled or co-branded and living inside your third-party app. [There’s] credit card issuance so that instead of going through a buy now pay later onboarding flow at checkout I can actually apply for a credit card with three different banks and actually get approved for that card, get issued my digital credit card, and then use that to pay for my first purchase all on the checkout page using those APIs. So as we think beyond open finance to banking-as-a-service, Brankas’s API menu is going to build out to actually more product APIs so that fintechs, e-commerce companies and others can actually offer a menu of fintech solutions to their customers. 

“As we think beyond open finance to banking-as-a-service, Brankas’s API menu is going to build out to actually more product APIs so that fintechs, e-commerce companies and others can actually offer a menu of fintech solutions to their customers.”

Paulo: Speaking of the region, you guys are in multiple markets, the Philippines, Indonesia, Thailand, and in your press release recently, you talked about becoming more active in Vietnam and Bangladesh. And what is your view across these different markets? Are you seeing some markets having a lot more potential than others? What’s your approach to prioritizing?

Building the fintech fast track

Todd: As we think about expansion, where we are most excited is fast-tracking the development of the fintech ecosystem because our customers are the next generation startups and businesses that are going to be building fintech solutions. 

And so how we think about prioritization is how we can support, I mean, really [the] economic development of a country by providing the tech to fast track some of the access to digital financial services.

Vietnam is particularly interesting. It’s just really starting to ramp up and there’s a lot of opportunity there. And we’ll have some big announcements soon. Thailand is interesting because it’s a middle income country. It’s a lot richer than its neighbors. There’s a big crypto ecosystem. The large banks have done a lot on their own to develop digital financial services, but it is still pretty early in terms of fintech. 

So we will continue to deepen our presence in Indonesia and the Philippines. Those are important markets. And I think there’s so much opportunity there, and then the non-India, south Asia [region] is very interesting just because there’s a lot of problems to solve and there’s a large population in need of competitive and affordable financial services.

“Where we are most excited is fast-tracking development of the fintech ecosystem because our customers are the next generation startups and businesses that are going to be building fintech solutions.”

Paulo: I also wanted to talk about your recent hires — Simo, who’s ex-Rapyd, ex-Rocket Internet, and now your head of BD, and Arvin, who’s ex-ING Philippines — as being key leaders in this organization and also shine light on what’s your approach as CEO to hiring these leaders, especially now Brankas is becoming a more mature company as well.

Brankas without Borders

Todd: So first off, Brankas has been remote-first from day one. I think our biggest advantage with being remote-first by far is that we can hire outside major city centers. And this is something that Ken and I, my co-founder and I were aligned on from the beginning, which is, the majority of our organization is our engineers. And there are phenomenal engineers found outside Jakarta, Manila, Singapore, and Bangkok, and some of our best engineers today indeed are in non-capital cities. Or in fact, during COVID, they’ve gone back to their family province. One of our top senior engineering managers is in rural Thailand. 

If we were centralized, we would not have access to these leaders. And so an important part of how we approach [this] from a first-principles point of view is we want to find the best talent in Southeast Asia that can serve the whole region. And for us to have maximum flexibility, to find the best people we need to be looking outside of a single city, it’s a false limitation. 

Join Brankas’s remote-first team by checking out open roles on the company’s career page and LinkedIn. 

Brankas’s latest key hires

We have onboarded some really, exceptional leaders. Simo has deep experience in open finance, kind of through a payment lens. He also has a lot of experience building teams within a fast-moving startup environment. So he’s been really helpful on our go-to-market approach and thinking through how we can solve customer problems. 

Arvin is not just head of legal, but also regulatory and compliance. He actually has his LLM on data privacy and consumer data protection. And so not only is he supporting us, and coming in from a regulations and banking policy point of view, but he actually has a deep knowledge on the principles of secure data protection and the technical aspects of data protection. That’s so fundamental to what Brankas does because our customers and their end-users need to trust that if they use a Brankas service that their data, which is sensitive financial data in many cases, will be handled appropriately.

And so, that’s how we’re going about it, finding the key hires regardless of what city they’re in, as long as they can work within our time zones, which is roughly kind of south Asia through east Asia, that we have the absolute best talent that’s committed to the open finance and financial inclusion agenda. So far so good, but we have a lot more hires to make. 

“How we approach [hiring] from a first-principles point of view is we want to find the best talent in Southeast Asia that can serve the whole region. For us to have maximum flexibility to find the best people we need to be looking outside of a single city, it’s a false limitation.”

Open Finance for DeFi

Paulo: To any of our listeners out there, it doesn’t matter where you guys are — I’ll leave a link episode description — if you guys want to check out these open roles at Brankas. And just to close off this main segment on our podcast, I think we would be remiss not to talk about DeFi as well, this whole world of crypto and web3. And obviously the main topic, from an infrastructure point of view is interoperability, right? From the consumer perspective, people will still make [the same] transactions, but it’s really the transparency and the efficiency of it that will change. And so from Brankas’s point of view moving forward, what role do you see Brankas playing in this? And what are your thoughts overall in terms of the DeFi space? 

Different protocols, same problems

Todd: I’m glad you asked. And [the way] I think [about], your interoperability and seamlessly moving your assets from one custodian to another, from traditional financial services to DeFi and back out again, [goes back to] what is Brankas’s value proposition? What problem are we solving? 

We are making it easier for financial services customers to access their financial products needing to go through five or six steps, which may involve getting on a motorbike and going to the nearest branch and taking a number and waiting in line. Instead you can do it on the app that you want to use, link your bank account, and then access and do the transaction that you want to. 

The same problem exists in DeFi right now. If I want to go stake on Anchor protocol, it takes me like five different steps to go hop from fiat to crypto, from the exchange to off the exchange, from the exchange, I need to swap and then I need to stake it, just to access staking yield against [a] stable coin. That’s one example, but there are so many examples of that where multiple hops are required. And so in the same way that Brankas is simplifying and abstracting away all of the different steps to access traditional financial services, we are building tech and tools to do the same for DeFi.

Building on-chain, off-chain rails for crypto natives

And I think that’s particularly relevant in Southeast Asia, where you have such a massive crypto trader and investor base. And I think, especially in the play-to-earn economy, I mean, in the Philippines, you have more than 3 million daily active users for Axie Infinity who are earning, actually in many cases, their first direct income ever, and it’s in crypto. And we know this because talking to the exchanges here locally, these guys are getting paid out in cash because they’re not yet banked. So not only are they building digital wealth for the first time, they actually need to help connect those rails to the traditional side of financial services so that they can pay for goods, without needing to pay 5% fees to get there or to turn their SLP into pesos right. 

So a lot of the work we’re doing and we’ll be making some announcements in the coming weeks is removing that friction and providing open finance for DeFi in the same way that we provide open finance for traditional financial services. So more to come there. 

“In the same way that Brankas is simplifying and abstracting away all of the different steps to access traditional financial services, we are building tech and tools to do the same for DeFi.”

Rapid Fire Round

Q: What are the top 3 traits a startup CEO should not have? 

Todd: They should not be stubborn when it comes to new ideas from their colleagues because in order to build a lasting company, you have to rely on your colleagues to be more insightful than you in certain ways, and to bring new ideas and help you see your blind spots. 

I think you should be patient in some ways, because building a startup is not an overnight activity, but you need to be patient in the sense that it will take longer than you anticipate. And I think having that resilience is so important. 

Number three, you should not choose a co-founder that is too similar to you. What I appreciate about Ken and me, and I think why we work well together is because we bring very complementary skills to the table. Searching for and signing up with co-founders who compliment you is pretty fundamental. 

Q: What digital technology/innovation (apart from open banking) excites you the most today? 

Todd: It’s DeFi, but I’ll be specific. What excites me about DeFi is the fact that crypto financial services are starting to look a lot like traditional financial services. So you’re now seeing lending opportunities, borrowing opportunities, yield generation opportunities on a stable coin or on a local currency coin. And of course there’s still risk. I mean, these are not like FDIC insured assets, but if you take it on a risk adjusted basis, it becomes an actual alternative to traditional financial services. And that’s good for the economy. Good for the financial services customer. And so that really excites me. It’s DeFi starting to look and feel like, and be an alternative to traditional financial services. 

Q: What advice would you give for westerners who are looking to move into Southeast Asia?

Todd: Again, I’m biased [being] in the startup community. I think this is the most exciting startup ecosystem in the world. You have a vibrant ecosystem. You have a lot of cash coming in. You have amazing talent. You have so many Filipinos, Indonesians, Vietnamese, Thais who are moving back that used to live abroad and are now excited to build here in Southeast Asia, but there’s still a management gap. It’s hard to find really good experienced managers. And so if you are outside of Southeast Asia, I think you’d be surprised at how much responsibility and impact you can have, by participating in the tech economy here. 

Q: What’s the biggest misconception people have about the Philippine’s startup ecosystem? 

Todd: That it’s too early. That might’ve been the case five years ago, but you’re now seeing US$50, 60, 70 million rounds. You’re seeing large successful companies coming out of Indonesia, and most of them are looking at the Philippines now as their second market. Now is really the time. It’s not too early anymore. The timing is red hot. 

Q: What’s your favorite go-to destination in Southeast Asia?

Todd: Oh, man. I love Luang Prabang in Laos. I think it’s just the most chilled out, beautiful kind of French architecture, colonial town on the river, but up in the mountains so it’s got cool temperatures. It’s been hard to get there during COVID, but Luang Prabang is great. I live in the Philippines, so within the Philippines, I love Baguio. I think La Union is really cool and I think what’s under-appreciated about the Philippines is just how good the surfing is here. There’s like four or five phenomenal surfing spots and apart from being a great surf town, [La Union] has got really cool energy. It’s got great wifi. I have friends there who have basically moved there during COVID and are happy as a clam with 500 Mbps pretty reliably because there’s no congestion. So those are a couple of spots. 

Q: What do you do to de-stress? 

Todd: Mainly just getting out of the city. Even though we’re working from home, you and I are fortunate to live in tropical paradise. And so just in a couple hour drive, you can get to the beach, you can get to the mountains and the cool mountain air. And so getting out, changing scenery, getting into kind of fresh air is, I find really de-stressing.