Join us in the third installment of our fifth-year anniversary summit recaps where we feature fireside chats with thought leaders and founders across industries sharing their insights on various sectors and trends shaping the future of ASEANnovation. See the first on Women in Tech and second on Web3.

This third conversation features the digital finance opportunity in Southeast Asia, which, while having seen an inflection in terms of the number of fintech startups being funded in the region, still remains in Day 1 with 70% of the adult population in the region still either underbanked or unbanked. 

On the panel, we have Greg Krasnov, founder and CEO of the Philippines’ first and leading fully digital bank Tonik (revisit our Season 4 episode with Greg), Huy Nghiem, founder and CEO of Vietnam’s leading wealth management and retail investment platform Finhay (revisit our Season 4 episode with Huy), and Tianwei Liu, Deputy CEO of regional B2B fintech group Fazz, which operates in Singapore and Indonesia (revisit our Season 4 episode with Tianwei). The conversation was moderated by Tim Lee.

This conversation took place on September 23, 2022, and both the episode and transcript have been edited for brevity and clarity.

Highlights and Timestamps

(01:09) A tour of fintech in the Philippines, Indonesia, and Vietnam; 

Greg and the Philippines: “70% of Filipinos don’t have a bank account, period. 95% of Filipinos are outside of the formal credit system and have never taken a loan from a financial institution. So effectively you have only the top 5% in the credit bureau…this is actually what we’re here to change. And especially on credit inclusion because I think credit inclusion is a fundamental thing for economic growth and a fundamental thing for social mobility. I’ve personally experienced credit inclusion early on in my life as a driver of my social mobility. I was a refugee in the US in my teenage years.”

Tianwei and Indonesia: “We are the tech guys providing the infrastructure for the small warungs that were powering the end user to provide financial services to the unbanked or underbanked…I realized some of these small warungs are very, very close to bank branches…you realize the customers that are actually going onto the small warungs and getting their [financial] services, you just observe their attire and how they are actually dressed up…The guy that’s really blocking the unbanked is actually the security guard standing outside the bank because [the customer] can’t enter in that kind of attire…You have to think about the social dynamic of things when you’re actually building out your product beyond technology.”

Huy and Vietnam: “To me, I see the market share in Vietnam can be expanded instead of being stolen from each other. So the entire market has 6.2 million trading accounts opened, but only around a million of them are active trading. And we have around 20 to 25 million TAM from Hanoi and Ho Chi Minh City. And so what it means is there’s still more than 10 million traders or people who can trade out there in the market.”

(12:38) Navigating Financial Services Licenses in Southeast Asia;

Greg on License to Fund Loan Book the Philippines Deserves: “If that you want to scale your loan book into the size that the market opportunity deserves…you cannot fund that through wholesale liabilities…So we really wanted a bank license to get access to that cheap, and sizeable funding pool to be able to scale our asset side…I don’t think we would have the same situation with a regulator in Indonesia or Vietnam. BSP in the Philippines is a very unique regulator that is very experimentally-minded and very, very focused on financial inclusion.”

Huy on Operational Implications of Licenses: “It was very, very adventurous and challenging, finally we got it done and so now we are in a next stage where before [when] running Finhay, it’s about like 20, 30% compliance, but now the compliance takes up to easily 70% of our daily operations.”

(16:38) Mitigating Risks in Consumer Lending;

Greg on Adapting to Macro Uncertainties Ahead: “Our original plan was to lend unsecured consumer loans into that blue ocean rising middle class. Now, the challenge of that is that there’s no credit system in the Philippines that covers those consumers, so you kind of have to build it from scratch, and that means it takes time…And another challenge is that these blue ocean, lower middle-class customers are quite exposed in an inflationary environment…So we’re trying to find ways of playing safer on the asset side. And we have the fortune of having completely outperformed our deposit projections.”

(18:45) A Tale of Two Fintechs and their M&A;

Tianwei on the value of fintechs joining forces to navigate regulatory environments: “Hendra and I were saying that we are both trying to expand the business. I’m looking to go into Indonesia; they were expanding out. But a problem is gonna happen where if you’re not local enough, we don’t have enough presence, and acquiring licenses is extremely difficult to navigate. So we saw a lot of synergies already with the fact that our businesses have so much overlap and we need each other to expand a lot. So that became one of the key drivers for why we decided to come together as a company. Because together we can achieve a lot more and licenses will allow us to basically have a [wider] reach and give more services to our existing clients.”

(22:15) Blockchain for Day-to-Day Life;

Tianwei on what makes good technology: “It’s still really day one here. Ultimately, I’m an engineer at heart and I will always tell people that we really need to look at where we should be applying this technology and they must bring about real-world impact…All they need to know is with things like electronic transfer, when my mom-and-pop store is trying to transfer funds. Does it reach there faster? Is it better? Is it cheaper?…And I think that’s what good technology is about down the road.”

Transcript

A tour of fintech in the Philippines, Singapore, Indonesia, and Vietnam

Tim: So let’s start with this question. Greg, perhaps you can begin. After introducing yourself and Tonik, maybe you can tell us why it is that in the Philippines we have such a high proportion of people who are unbanked or underbanked. 

Greg: Thanks Tim. Hi guys. I’m Greg. I represent Tonik. I’m the founder and CEO of Tonik. We’re the first digital bank in the Philippines. We actually operate under a full bank license, [which is] rather unusual for neobanks around the world. We were the pilot of the digital bank license by the Central Bank of the Philippines, and that’s why we’re the first to market and the largest, et cetera. 

Why does the Philippines have a population that is so unbanked? 70% of Filipinos don’t have a bank account, period. 95% of Filipinos are outside of the formal credit system and have never taken a loan from a financial institution. So effectively you have only the top 5% in the credit bureau. And banks keep lending to those that have a credit history. And if you don’t have a credit history, good luck. Go borrow from your uncle, go borrow from your mom, whatever you want. So actually that’s what they end up doing. They’re borrowing from each other. 

Why is that the case? I think there are multiple factors at play. One factor at play is that the mass of the Filipino population perceives banks as being by the rich and for the rich. And that’s actually a massive blocker to the adoption. 

The second one, of course, is bank branches. To go into a bank branch and to deal with an antiquated onboarding process takes a few hours to sign all the papers. And you know, if you are thinking that it’s not for you and it’s by the rich and for the rich, then you don’t go, and you think, “well, why do I need it?” I’d rather continue to borrow from my uncle. 

So this is actually what we’re here to change. And especially on credit inclusion because I think credit inclusion is a fundamental thing for economic growth and a fundamental thing for social mobility. 

I’ve personally experienced credit inclusion early on in my life as a driver of my social mobility. I was a refugee in the US in my teenage years. So I’m really a big believer in that and I think we’re fulfilling a big social mission. 

Tim: To just tell the audience a little bit about your own background there, because you’ve worked and lived in many countries, and since you’d mentioned your refugee background, do you wanna just say which countries you’ve come through?

Greg: Yeah, so I was born in Ukraine, then I lived in the US and then I moved to Europe and was living in the UK in Poland. Singapore is now country number eight. The Philippines I suppose is country number nine. so, I have really moved around a lot and that really helps me with the international perspective on the neobanking.

“70% of Filipinos don’t have a bank account, period. 95% of Filipinos are outside of the formal credit system, and have never taken a loan from a financial institution. So effectively you have only the top 5% in the credit bureau…this is actually what we’re here to change. And especially on credit inclusion because I think credit inclusion is a fundamental thing for economic growth and a fundamental thing for social mobility. I’ve personally experienced credit inclusion early on in my life as a driver of my social mobility. I was a refugee in the US in my teenage years.”

Tim: Thanks Greg. Now Tianwei you have a different model at Fazz where you are getting, people included financially through B2B, but also [would like for you] to touch on the example as Greg was describing of the stigma [of] going into a bank, which you’ve told me before because I think there’s a story there that I think everyone can understand through that lens.

Tianwei: Thank you everyone. Hi everyone. My name is Tianwei. I’m one of the co-founders and Deputy CEO of Fazz. So a bit of background on Fazz, we were formed by the merger of two YC companies, Xfers and Payfazz about two years ago. We are currently serving about 200,000 small and medium businesses from small warungs in Indonesia to Web3 startups with some advanced APIs in Singapore. We are currently the largest business financing [back-end] for them. 

So maybe to relate directly to the question you’re talking about, I think [let me share] a personal experience. [I’ve] worked in a couple of different countries. Before this, my background was in engineering.

I was an engineer working for about six years in the Bay Area before coming back to start Xfers and now Fazz. As a younger engineer, you always [think that] most of the things that happen in the world are related to technology and APIs.

And getting to know Hendra, my co-founder, who is Indonesian — I actually started visiting with them a lot in 2019. And there was this personal experience that really struck me. We are the tech guys providing the infrastructure for the small warungs that are powering the end user to provide financial services to the unbanked or underbanked.

But the data really [piqued my curiosity] one time. When I was just mapping it out, I realized some of these small warungs are very, very close to bank branches. The most active agents are actually working around a small BRI bank or BNI bank. There’s actually a physical bank branch there.

And I was curious, one time I was [with] Hendra, we took a motorbike down and he drove me over there. We sat down on the roadside having sate. When I was asking him this question [about the bank branches], he was like, just observe. And after the 30 minutes session, I realized that you realize the customers who are actually going onto the small warungs and getting their [financial] services, you just observe their attire and how they are actually dressed up.

And you start to understand that it’s really beyond technology. The guy that’s really blocking the unbanked is actually the security guard standing outside the bank because [the customer] can’t enter in that kind of attire. He gets discriminated against, he feels unsafe, and he just doesn’t feel at home actually walking to the bank branch, which is something that really enlightened me, right?

You have to think about the social dynamic of things when you’re actually building out your product beyond technology. So this is the kind of stigma that we are still trying to solve these days through a lot of our agent banking across the entire Indonesia. 

Sometimes really beyond the tech. There’s nothing technologically advanced [about it]. The personal part of it, the human part of it is a huge part at play here as well. 

“We are the tech guys providing the infrastructure for the small warungs that were powering the end user to provide financial services to the unbanked or underbanked… I realized some of these small warungs are very, very close to bank branches…you realize the customers who are actually going onto the small warungs and getting their [financial] services, you just observe their attire and how they are actually dressed up…The guy that’s really blocking the unbanked is actually the security guard standing outside the bank because [the customer] can’t enter in that kind of attire…You have to think about the social dynamic of things when you’re actually building out your product beyond technology.”

Tim: Now these agents that Fazz has, how do they help bring financial services to their customers? Can you describe a bit of that? 

Tianwei: Sure. So across our work for the past five years, we have onboarded almost 200,000 small mom-and-pop stores in Indonesia, which we call warungs. By giving them a mobile application to provide over-the-counter financial products and services such as bank transfers, paying water bills, electric bills, and telco bills to their neighbors. 

So a lot of these customers are actually their neighbors who walk up to them to buy a cigarette, FMCG product, or mineral water, and then they will also ask for financial services, right?

And through them, they become an agent of change. A lot of our customers get access to e-commerce for the first time through these agents, right? Because they have no way to make payments for Tokopedia or Bukalapak, right? 

You also realize if you just spend some time near the agent, the Gojek drivers who we say are a huge part of the change that we received the last five years, you just observe where they are actually getting their Gojek credit top-up, and where they are having their coffee is again around these small mom-and-pop stores. They’re the heart of the economy over there. 

These are their neighbors. These are where they have a very comfortable time during their downtime sitting under a large tree enjoying a sate tai chan and just chatting with their friend. And that’s where they get most of the services that they get today. 

“If you just spend some time near the agent, the Gojek drivers who we say is a huge part of the change that we received the last five years, you just observe where they are actually getting their Gojek credit top up, and where they are having their coffee is again around these small mom-and-pop stores. They’re the heart of the economy over there.”

Tim: Thanks for painting that picture for us. Now Huy, I’ve opened up a bank account in Singapore now, so I am good. But let’s say I’m in Vietnam and I want to open a trading account. What’s the process? Can you walk me through that after you introduce yourself and the company?

Huy: My name is Huy, I’m the founder and CEO at Finhay. We are an online investment platform that helps retail investors in Vietnam to trade different kinds of asset classes in the country. 

So to answer your questions, if you were in Vietnam five years ago, you would need to go to a bank branch and actually sit down and wait for the tellers to invite you to come over and start filling out the forms and wait for them to send you an internet banking account and wait for two weeks to receive your cards.

But now you can do it online. You can get the card within a day. Some banks even have a card printer in their bank branches and they can send it via grab to you in a day. And you can start using internet banking within 15 minutes. I would say it’s very fast.

It’s the same with trading accounts. Five years ago you probably needed to go to the trading firms and start signing up for paperwork, waiting for them to open a custodial account for you for up to five days. And then you can start trading. But now it can be done within five minutes with us. So things have changed a lot now here in Vietnam, and I couldn’t believe it either. I returned to Vietnam in 2017 from Australia. That was eye-opening for me. 

“Five years ago you probably needed to go to the trading firms and start signing up for paperwork, waiting for them to open a custodial account for you for up to five days. And then you can start trading. But now it can be done within five minutes with us. So things have changed a lot now here in Vietnam, and I couldn’t believe it either.”

Tim: And I remember when we were looking at the market, some of these are traditional players, and it took them many, many years, I think almost decades to get to something like 200,000 retail trading accounts. How does it compare now? How have you been helping to open up that market? 

Huy: So the capital market in Vietnam was born in 2000. So we are only 22 years old. And the top performer in the market has around 200,000 funded accounts actually actively trading with them. So after 22 years, 200,000 accounts, that’s the top performer. For the entire market, we have around more than a million active traders. But at Finhay we achieved that number. So we are serving almost 600,000 funded accounts at the moment, in the last five years. It’s all due to the online onboarding process. It became streamlined and easier for end clients to open up trading accounts and mutual fund trading accounts, unlike others that have been really slow in changing it from the traditional approach. 

“We are serving almost 600,000 funded accounts at the moment, in the last five years. It’s all due to the online onboarding process. It became streamlined and easier for end clients to open up trading accounts and mutual fund trading accounts, unlike others that have been really slow in changing it from the traditional approach.”

Tim: I see. And a lot of these 600,000 accounts, they’re new to retail trading in any form. They’re not stealing them or having to compete to get them from these established players. Right? 

Huy: It is. I see the market share in Vietnam can be expanded instead of being stolen from each other. So the entire market has 6.2 million trading accounts opened, but only around a million of them are active trading. And we have around 20 to 25 million TAM from Hanoi and Ho Chi Minh City. And so what it means is there are still more than 10 million traders or people who can trade out there in the market. So that’s why we would need to steer each other for like 6.2 million shooting accounts out there, there are still more than 10 million that can open the trading accounts and start trading. So that’s what I see from the potential of the Vietnam market. 

“I see the market share in Vietnam can be expanded instead of being stolen from each other. So the entire market has 6.2 million trading accounts opened, but only around a million of them are active trading. And we have around 20 to 25 million TAM from Hanoi and Ho Chi Minh City. And so what it means is there’s still more than 10 million traders or people who can trade out there in the market.”

Navigating Financial Services Licenses in Southeast Asia

Tim: That’s pretty stunning. So single digits penetration in terms of the total population that’s available on retail trading accounts. Now I wanna switch gears a little bit and ask you guys about another important topic in digital finance, which is regulation.

Now Greg, you mentioned in your opening that you were the first to pioneer having a full bank license as a digital bank. Why was that important? 

Greg: I’ve been in consumer lending in different places now for quite some time throughout my career. I kind of started and sold a bank before in consumer finance, et cetera. One thing that I’ve come to learn is that if you want to scale your loan book into the size that the market opportunity deserves — and it deserves a loan book into billions. You know, the Philippines for example, $10 billion is today the size of unsecured consumer lending. $11 billion is the size of secured consumer lending.

That’s it. Less than 10% of banking assets and it needs to grow to over a hundred billion altogether. So you’re talking about a loan book in billions that you can build with a very small market share — you cannot fund that through wholesale liabilities. You can only fund maybe a couple hundred million max.

And actually, I had prior experience in the Philippines as well because I co-founded a digital lending company there. And sure enough, I did that despite my best judgment, and we hit a constraint on getting wholesale funding. So fortunately we sold that, but we came to the central bank and we said, “Guys, please give us access to deposits because there’s $300 billion of deposits in the banking system in the Philippines today earning practically nothing, getting a horrible experience.”

So we really wanted a bank license to get access to that cheap, and sizable funding pool to be able to scale our asset side. We were very lucky. I don’t think we would have the same situation with a regulator in Indonesia or Vietnam. BSP in the Philippines is a very unique regulator that is very experimentally-minded and very, very focused on financial inclusion.

They were willing to take an [chance] on us. And they said, “Okay, we like your experience, we like your pitch, we like your approach. We want to solve financial inclusion. We get the role of digital in that, but how about we give you a rural bank license, and we make you our sandbox and we’ll learn with you and from you and then we’ll create digital bank license regulation and then we’ll convert you into the first formal one.”

And we said, “Wonderful. Just call us whatever you want. Just let us do the business that we want to do.” So I think the role of the regulator is critical and I’m very, very sad to see that in Indonesia it’s being solved by the OJK allowing people to take over existing banks. In Vietnam, for example, there are no banks to take over and the regulator hasn’t yet solved the digital bank regulatory framework. So I would love to be in both of those places, but right now we cannot.

“If you want to scale your loan book into the size that the market opportunity deserves…you cannot fund that through wholesale liabilities…So we really wanted a bank license to get access to that cheap, and sizeable funding pool to be able to scale our asset side…I don’t think we would have the same situation with a regulator in Indonesia or Vietnam. BSP in the Philippines is a very unique regulator that is very experimentally-minded and very, very focused on financial inclusion.”

Tim: Huy, know that you also acquired a license. Would you wanna say a little bit about your process going through that? 

Huy: So trading licenses in Vietnam are limited, so there’s no more new [license] to be issued in the market. We have only 74 active companies in the market. So it means there are only 74 licenses and we’ve gone through that acquisition and it took us around six months to complete it from A to Z. 

That was very, very, challenging and adventurous because the company was established in 2006, so it’s been like 16 years. And there are a lot of accounting and things that in the past we couldn’t see and couldn’t go through because all the people that established the company there have gone back home to their country and we don’t even know who they are. So that was very challenging. It just took longer than we expected due to a number of reasons out there. 

But all I can say it was very, very adventurous and challenging, finally we got it done and so now we are in the next stage where before [when] running Finhay, it’s about like 20, 30% compliance, but now the compliance takes up to easily 70% of our daily operations. It’s moving into more of compliance on a daily basis now.

“It was very, very adventurous and challenging, finally we got it done and so now we are in the next stage where before [when] running Finhay, it’s about 20, 30% compliance, but now the compliance takes up to easily 70% of our daily operations.”

Mitigating Risks in Consumer Lending

Tim: It definitely sounds painful. You didn’t use that word, but I’ll give you that. And it was done during the depths of the pandemic as well, when it was difficult to meet with people in person. And of course, those relationships are important. 

Now, Greg, you talked about expanding this loan book and making loans available in a rising interest rates environment, as well as the challenges we’ve had in the pandemic. Can you talk about how you are mitigating risk and managing your business?

Greg: Well, when you expect a big macro disruption ahead, and I think all of us sitting in this room probably expect that, then as a consumer lender, what you try to do is lend into safer asset classes, right? 

So for us, it hasn’t been any different from that. Our original plan was to lend unsecured consumer loans to that blue ocean-rising middle class. Now, the challenge of that is that there’s no credit system in the Philippines that covers those consumers, so you kind of have to build it from scratch, and that means it takes time. It’s a very data-driven process where you build your own scorecards, you build your own alternative data sources, and build, build, build until you drive the cost of risk down.

And another challenge is that these blue ocean, lower middle-class customers are quite exposed in an inflationary environment. Their disposable incomes are at risk of shrinking, and they’re also exposed to a macro downturn because a lot of these guys are in retail or F&B, et cetera — the sectors that are gonna go first. 

So basically what we’ve had to do is reposition our asset side into safer stuff. So we launched this week, we launched actually the first digital mortgage product in the Philippines. And that’s a larger ticket, and a safer product because it’s secured. We are repositioning our cash loan, we’re spinning out a cash loan into the prime segment, a more kind of banked personal loan segment because I fully expect banks to pull back on personal loans.

So we’re trying to find ways of playing safer on the asset side. And we have the fortune of having completely outperformed our deposit projections. So my liabilities are now at 150 million without really trying very hard for the last year. So we’re able to go after that larger ticket business with confidence that we can build the liabilities to do that. So I think you just have to be safer with your asset allocation strategy, like I’m sure all of you guys in this room are doing as well. So we’re doing the same.

“Our original plan was to lend unsecured consumer loans into that blue ocean rising middle class. Now, the challenge of that is that there’s no credit system in the Philippines that covers those consumers, so you kind of have to build it from scratch, and that means it takes time…And another challenge is that these blue ocean, lower middle-class customers are quite exposed in an inflationary environment…So we’re trying to find ways of playing safer on the asset side. And we have the fortune of having completely outperformed our deposit projections.”

A Tale of Two Fintechs

Tim: I know that both Finhay and Tonik raised money during the last year or two, and so has Fazz, but Tianwei, you also went through a merger. I want the audience to hear a little bit about Xfers and the founding of that and then why you decided to combine in this last period.

Tianwei: First we didn’t predict the pandemic so that happened. I think I posted recently in my LinkedIn post, we wanted to do this since 2019. Me and Hendra have been business partners. We have known each other since the YC days and we have been working very closely in [Xfers’] Indonesian expansion, right?

Actually, all these things happened…I was the first guy he reached out to on the YC network when he came to Singapore to fundraise and he was actually staying at my house when he was trying to close Yinglan and Insignia for fundraising. So it’s like something really happened right there, 

And long story short, in 2019, we were already thinking about this and I think some of those things you guys are discussing from a licensing perspective are super relevant to us, right? I’m a Singaporean. I was born and raised in Singapore, and spent time overseas and in trying to navigate Singapore, we are talking about one of the most open economies here in this region. Licenses are extremely difficult to have. 

And Xfers, which is a company I originally founded, we’re very fortunate to have secured pretty much all the licenses needed from e-money, from payment gateway…on the regulators’ side of things. 

I think everyone can say that regulators around the region need to be more innovative and Singapore is probably already at a frontier of that. But having spent the last five to six years working with them, I will fundamentally distill down the fact that we have to face the fact that the number one job of regulators is not innovation, it’s financial stability. 

So they need to make sure that things are gonna be okay. And that is their primary, most important job. And with that, there needs to be trust. So I think the pandemic made that even more difficult these days. But the fact is you need to have a proven track record of being able to be on the ground, serving the community, and actually doing a good thing before they will even be willing to give you licenses.

So that was the backdrop that we were even discussing in 2019, right? Hendra and I were saying that we are both trying to expand the business. I’m looking to go into Indonesia; they were expanding out. But a problem is gonna happen where if you’re not local enough, we don’t have enough presence, acquiring licenses is extremely difficult to navigate. 

So we saw a lot of synergies already with the fact that our businesses have so much overlap and we need each other to expand a lot. So that became one of the key drivers for why we decided to come together as a company. Because together we can achieve a lot more and licenses will allow us to basically have a [wider] reach and give more services to our existing clients.

But we did not predict the pandemic. That thing happened along the way and in some senses, a blessing in disguise. One thing I did learn from the pandemic is that new relationships are super hard to make online. It’s kind of impossible to really bond with someone digitally, for the first time you talk to them. I met some people for the first time after two years.

I’m very happy to do that, but I realized that hey, it’s kind of a new experience. So that makes it even harder in the pandemic itself where you’re trying to deal with regulators, and you say that “Hey, I want to apply for a license online” — it’s going to be an uphill battle right there. And I’m so glad that was one of the blessings that we had. We have local founders who have a local presence and while Hendra handled OJK, I handled the MAS. It was such a blessing in disguise. 

We will just continue doing it that way, right? But it’s of course not without his challenges to do this for two and a half years. We pretty much did the whole merger remotely. We have met up in isolation in pockets of people in hotel rooms, but never in a big group environment. And that brings about new challenges and we are glad that the team pulled together and got through so far.

“Hendra and I were saying that we are both trying to expand the business. I’m looking to go into Indonesia; they were expanding out. But a problem is gonna happen where if you’re not local enough, we don’t have enough presence, and acquiring licenses is extremely difficult to navigate. So we saw a lot of synergies already with the fact that our businesses have so much overlap and we need each other to expand a lot. So that became one of the key drivers for why we decided to come together as a company. Because together we can achieve a lot more and licenses will allow us to basically have a [wider] reach and give more services to our existing clients.”

Blockchain for Day-to-Day Life

Tim: Thank you for describing that. And that is certainly challenging, but glad that you and Hendra are together. Now, I have one final question. Now, Tianwei, as you were talking about merging the companies, I know that Xfers you started many years ago with a mission to make payments much, much easier. And I thought we’d be remiss if we didn’t touch on the ability now for technologies like the blockchain to see you fulfill that mission in a more powerful way. Can you talk a little bit about your initiatives there? 

Tianwei: So we at Xfers have been the first to have the privilege to serve some of the cutting-edge technology companies in the blockchain space for the last two to four years.

So I think some of the exchanges and some of the Web3 companies that we are hearing big brand names like Gemini, and Crypto.com, are pretty much using the infrastructure that we have laid over the years and we are the one serving them on-ramp, off ramp. 

So I think since before the pandemic, there have been a lot of talks about Web3 and the push for that. And we were fortunate enough that we already worked very closely with some of these clients. And together we have pushed off a project called StraitsX, which is basically our Web3 arm. They have been piloting stablecoin for Southeast Asia. 

So we are probably now one of the largest non-US dollar-backed stablecoins in the world that’s fully backed by e-money or an existing e-money license. And we are working very closely with regulators like the MAS to transit that into a new framework that they currently are working on. We see a lot of opportunity in that space and in some sense, it’s still at the start. It’s still really day one here.

Ultimately, I’m an engineer at heart and I will always tell people that we really need to look at where we should be applying this technology and they must bring about real-world impact. My mom really doesn’t care how you are trying to transfer the money. She will never understand blockchain and I have given up trying to explain it to her. All they need to know is with things like electronic transfers, when my mom-and-pop store is trying to transfer the funds. Does it reach there faster? Is it better? Is it cheaper? That’s all they will need to understand. 

And I think that’s what good technology is about down the road, and what’s probably going to happen is all these things will disappear behind the scene when it’s actually working seamlessly. Because the services that we are providing are not gonna change. Ultimately, people want better services that will help them in their day-to-day life. They don’t really care about the tech that’s powering it, and that’s what we are trying to do behind the scenes here. 

“It’s still really day one here. Ultimately, I’m an engineer at heart and I will always tell people that we really need to look at where we should be applying this technology and they must bring about real-world impact…All they need to know is with things like electronic transfers, when my mom-and-pop store is trying to transfer funds. Does it reach there faster? Is it better? Is it cheaper?…And I think that’s what good technology is about down the road.”