The year is 2017. On a work trip to Bali, Dr Yanan Wu is inspired to take on the next stage of his career. Seeing the immense wealth gap in the market, he starts Surfin to leverage the emerging technological dividend around data analytics and AI in markets like Indonesia, where there is a demographic dividend of young, digitally savvy population with an unmet need for better financial services.  

Seven years later, Paulo goes On Call with Dr Wu to hear his story over the last 30+ years, from being a nuclear physicist in Los Alamos National Lab in the US to developing models for the capital markets at global financial institutions, and finally developing more equitable credit models for the underserved at Surfin.

Surfin now serves 60 million users across nine markets globally with an ecosystem of financial service products ranging from financing to wealth management and credit cards, built on a proprietary core credit scoring engine. 

Insignia Ventures Partners recently invested US$12.5 million in their first institutional round after seven years of growing bootstrapped.  

Timestamps

(00:00) Introduction;

(01:49) A Global Fintech Born out of Demographic and Technological Dividends;

(11:38) Navigating the Nuances of Financial Services in Different Emerging Market Regions;

(24:37) Building Models Through a Career of Technological Cycles;

(30:07) Finding Allies in a World Class Board and 2800+ Employees Across the Globe;

About our guest

Dr Yanan Wu has had over 26 years of global investment experience serving in various financial institutions and family offices, including stints at CITIC Prudential Fund and TD Asset Management Canada. He’s also no stranger to fintech as well, having launched a robo-advisory startup prior to Surfin. He received his PhD in statistical physics from the University of Western Ontario in Canada, and completed his post doctoral research at Los Alamos National Lab in the US.

Transcript

A Global Fintech Born out of Demographic and Technological Dividends

Paulo: You mentioned, I think, in a previous conversation that Surfin started out with its name inspired by a trip to Bali. You saw the financial inclusion opportunity there. Maybe you can start from that point and how Surfin came about.

Dr. Yanan Wu: Indeed, as you captured, the name “Surfin” was inspired by my first surfing lesson in Bali back in 2017. It was during an August trip I led with a team to Bali. That was the first time in my life I learned how to surf, and, until now, it’s still my only experience with surfing. I’m not a good surfer yet, but that trip played an essential role in starting Surfin.

When we were in Bali, it was my first visit to Indonesia, and I was struck by the young demographics and the enthusiasm of young consumers. They rode bicycles, enjoyed life, and had such a joyful attitude in their daily living.

On the last day of our trip, we were in Jakarta, staying at a five-star hotel—the Grand Hyatt. Anyone familiar with Jakarta would know this luxury area around Plaza Indonesia. That night in August 2017, I stood on a bridge with a river behind me, facing two starkly different worlds.

One side was bright, filled with fancy shopping malls, well-dressed people, and luxury hotels. The other side was dark, with a slum area where boys and girls held plastic cans, begging for money. The contrast between these two worlds was profound and shocking.

As I stood on that bridge, I thought to myself, “Can we do something to bridge this gap? Can we use technology to break down the barrier between these two worlds?” This moment planted the seed for Surfin. At the time, we were already involved in FinTech in China and other regions. That night marked the birth of the idea, and by November 2017, three months later, I set up Surfin’s headquarters in Singapore.

We aimed to use technology to bridge financial inclusion, to connect those two worlds, and to provide financial access to underserved communities in Indonesia. The name “Surfin” came from the idea of riding the technology wave to bridge that gap.

Paulo: Who knew a surfing lesson would lead to starting what is now a global FinTech company? A lot of people draw inspiration from Indonesia. This was seven years ago, and November marks your anniversary, right?

Dr. Yanan Wu: Yes, indeed. November 13 is the anniversary.

Paulo: This should be released around November 13th, so if you’re listening, it’s Surfin’s seventh anniversary. It’s impressive how far you’ve come. I was recently in Bali too and can relate to your story. But I think the problem of financial inequality still exists. Many FinTechs are approaching financial inclusion in different ways. What has Surfin done differently compared to others in 2017, and how does it differ from your prior ventures?

Dr. Yanan Wu: When we launched Surfin in November 2017, we started operations in Indonesia by January 2018 with our first mobile app. At that time, Indonesia’s infrastructure was underdeveloped compared to China and other advanced markets. However, we noticed a growing number of consumers living online, using ride-sharing and e-commerce services.

One key factor driving this trend was mobile penetration, which was already at 50-60% in Southeast Asia and rapidly increasing. After COVID-19, mobile penetration deepened even further as it became essential for daily life. This growth allowed us to scale and reach Indonesia’s diverse, youthful population.

One of my personal heroes is Professor Muhammad Yunus, the Nobel Peace Prize winner who pioneered financial inclusion in Bangladesh. He started with microfinance for women, using a guarantee system among communities due to the lack of technology to assess creditworthiness.

Today, thanks to mobile technology, we can capture user behavior data to create a comprehensive profile of underserved consumers, including their social, consumption, and credit risk behaviors. This allows us to provide a credit score and help young consumers begin their financial journey.

To me, a credit score is essential for financial dignity. Without it, no one can access financial services. Surfin’s “credit score” is based on alternative, non-financial data such as smartphone usage, internet activity, social media, e-commerce, and phone behavior. This 360-degree profile enables us to build a proprietary credit score for our users.

Unlike Professor Yunus’s time, when technology became available, we benefited from mobile penetration, AI, and big data algorithms to serve 60 million users across nine countries on three continents. This scale would have been unimaginable two decades ago. We’ve been able to leverage these technological advances to make financial services accessible.

Navigating the Nuances of Financial Services in Different Emerging Market Regions

Paulo: You mentioned the combination of demographic and technology dividends. These factors have enabled Surfin to create its credit scoring system, unlocking financial services for millions. I’d like to focus on this credit score and how it has shaped consumer finance and beyond. 

This has led to a go-to-market strategy that initially focused on consumer financing products. But now, you’ve expanded beyond that with payment products, wealth management, and credit cards. How do you see credit scoring as fundamental to creating an ecosystem of financial services?

Dr. Yanan Wu: Yes, you’re right. Surfin is now able to cross-sell different financial products to this young and rapidly growing consumer community. It’s a dynamic, evolving process. Our financial journey evolves with factors like income growth, employment opportunities, and family history. By partnering with young users and starting with credit scoring, we can understand their initial credit risk profile and support them in enjoying better consumption experiences.

For example, while Buy Now, Pay Later (BNPL) is popular in parts of South Asia, our approach includes offering credit cards, which provide more flexible purchasing options. That’s why we partnered with Visa to launch the Surfin Visa Card, enabling users to shop with various retailers, such as Costco, KFC, Walmart, and Cineplex. This collaboration allows our young consumers to build credit histories, improving their financial standing.

Once their credit history becomes richer, we can tailor our offerings further, providing more customized financial products, such as remittance and payment solutions. Many young people in this region are migrant workers, moving frequently for job opportunities and engaging in cross-border activities. The region’s mobility, facilitated by smartphone usage and digital technology, means people no longer need to stay in one place.

There are pain points for these migrant workers, such as sending money home to support their families. We aim to provide smart, affordable, and convenient money transfer options. By serving these workers, we enable them to support their children’s education and parents’ well-being.

As their life journeys progress and they establish themselves as middle-class professionals, they start saving for their children’s education and their own retirement. This is where wealth management comes in. We provide robo-advisory services driven by smart technology to make financial planning interactive and personalized. Financial services are evolving towards AIGC-based technology, offering prompt-driven, intelligent solutions.

We focus on four key areas at Surfin: LendTech for credit scoring and lending, PayTech for remittance and payments, CardTech for credit card services, and WealthTech for advanced financial planning. These products help us serve our users more comprehensively as they move through different life stages.

Paulo: Thank you for explaining that and illustrating how these services impact consumers’ lives, particularly the journey of the middle class in Southeast Asia. The point about migrant workers resonates, as many fintechs, including those in Insignia’s portfolio, approach this demographic from various angles. Surfin’s credit and remittance solutions, as well as other models like open finance and stablecoin-based approaches, all cater to this mobile demographic.

I recall that you launched credit card products in Latin America and wealth management in Indonesia. Could you share the differences you’ve observed in fintech adoption across the nine countries you operate in? For instance, is launching a credit card easier in Latin America compared to Southeast Asia?

Dr. Yanan Wu: Great question, Paulo. Surfin’s unique position in the financial industry allows us to operate in multiple countries and serve a wide user base of 60 million across three continents. We’ve observed different user behaviors, credit cycles, and cultural attitudes in each market, allowing us to stress-test our risk models and fine-tune them for localization.

For instance, Mexico has a credit card culture similar to North America, which facilitated our entry there with credit card products. Visa has appreciated our ability to reach younger demographics that traditional banks struggle to serve. This partnership is mutually beneficial as we provide not only financial data but also behavioral insights that Visa cannot access independently.

Southeast and South Asia present different challenges due to varying GDP per capita, cultural behaviors, and financial infrastructure. Indonesia and India, for example, are distinct markets with unique characteristics. 

We see these regions as fertile ground for nurturing a growing middle class that will demand wealth management services. In Indonesia, we launched mutual fund distribution under the Ayovest brand, catering to young professionals saving for long-term goals such as their children’s education or retirement.

In India, our platform Bootsmart holds mutual fund distribution and brokerage licenses, helping users manage their investments with discipline. The aim is to provide long-term strategies for wealth preservation and growth, avoiding speculative or gambling behaviors.

We believe the future of financial services in these regions lies in combining technology and local insights to deliver tailored solutions. This approach positions us to support the upcoming wave of middle-class growth in Southeast and South Asia.

Paulo: It’s fascinating how partnerships like the one with Visa, along with consumer behaviors, shape the development of financial products. I’d like to delve into the role of AI and AIGC in your vision for future banking, where interactions could be as simple as asking your phone to prepare a loan agreement.

Building Models Through a Career of Technological Cycles

Paulo: I wanted to ask you, how is Surfin thinking about the existing risks of AI, especially when it comes to three main areas: cybersecurity, cost, and the hallucination aspect of generative AI? How is Surfin addressing and mitigating these risks in its product delivery?

Dr. Yanan Wu: I think I’m old enough to have witnessed several technology cycles and waves over my 26+ years in the professional field.

At the start of my career, I was a nuclear physicist working at Los Alamos National Lab in New Mexico, USA. Back then, computing power was directly tied to how large the computers were. At the lab, we used a supercomputer called the Connection Machine to model physical phenomena and conduct research on critical phase transitions.

Later, I transitioned to Wall Street as a quantitative trader, leveraging models and data to identify investment opportunities and price risk in capital markets across bonds, equities, currencies, and derivatives. I managed pensions, insurance funds, and endowments in Canada, using technology, data, and early neural networks.

Now, with the advancements in AI, we at Surfin can serve millions of users across continents. The era of big data has truly transformed our capabilities. Today, we are entering a new phase—an AIGC era (AI-generated content)—characterized by more interactive, prompt-driven financial services. This new landscape allows us to monitor, analyze, and revolutionize financial services like never before.

I have worked in the second-largest bank in Canada, a leading securities firm in Asia, and at insurance companies. Back then, we used qualitative investment models to allocate wealth and construct efficient frontier models for asset allocation. Now, with AIGC, everything can be dynamic. Users can ask questions like, “How will the U.S. election impact my portfolio?” or “What should I do if there is an oil shock?” and receive prompt, real-time answers.

Today’s young investors face an environment where volatility and market changes happen rapidly. The static, traditional investment portfolio no longer suffices; it must be dynamic.

In this new AIGC era, traditional financial entities like securities firms and mutual funds may evolve. They will become embedded in users’ daily financial activities, supported by technology. In the future, a bank won’t be a physical place but an open, API-enabled platform that can integrate seamlessly with anyone’s financial needs.

That’s why I talk about the “Four I’s” to summarize what AIGC-based financial services should embody: interactive, individualized, intelligent, and inclusive. I envision Surfin playing a crucial role in making these characteristics the norm for financial services in Southeast Asia and South Asia, leveraging the depth of big data and advanced financial service models.

Paulo: Surfin is well-positioned to build out this vision, given its diverse financial services. It’s not limited to a single offering. Surfin’s strength lies in its core focus on data modeling and assessing alternative data. 

I was going to ask how your research background feeds into Surfin, but you’ve already answered that. Your career, from modeling in the scientific field to financial markets, and now to credit access and financial inclusion, really comes full circle. It’s clear you’re not the only one at Surfin with such extensive experience.

Finding Allies in a World Class Board and 2800+ Employees Across the Globe

Paulo: You’ve put together a board of directors with quite an impressive resume and achievements, including Nobel Prize winner Dr. Michael Spence. So, maybe you can share a little bit about how you’ve managed to bring these amazing individuals together into the Surfin mission and how they’re contributing to helping the company move forward in the next 10 to 20 years.

Dr. Yanan Wu: Yeah, thank you, Paulo, for bringing that up. I’m really fortunate. I’m not in this alone—it’s not a one-man battle or one-man work. It’s really the whole Surfin group, the 2,800 staff, collectively making the contribution to this financial inclusion dream becoming a reality. I’m also fortunate to have this great board of directors who support this vision and share the same vision as Surfin.

You just mentioned Dr. Michael Spence, the 2001 Nobel laureate in economics. I met him at a conference at the Greenwich Economic Forum, where I was one of the speakers. I shared Surfin’s emerging market financial inclusion vision in Connecticut, in Greenwich, North America. 

Many of my fellow panelists and participants were impressed and saw the growth potential and application of financial inclusion in Southeast Asia, South Asia, and even Africa. They really echoed this potential for growth.

One of them was Dr. Spence. He won the Nobel Prize in economics for his work in information economics, particularly information asymmetry, which he believes can drive economic progress in any country. 

One of the applications of his Nobel theory is that emerging markets, with their productivity growth, can have the opportunity to leapfrog over developed markets. When he heard Surfin’s story, he really saw not only the potential for financial inclusion for underserved consumers but also how emerging markets could use technology, like AI, to achieve stronger productivity growth.

In local economies, this technology can support even stronger and faster growth in consumer and SME sectors, which would otherwise struggle without such advancements. He sees Surfin as a real-world example of his Nobel-winning theories. I’m so honored to have him on board as my personal mentor, not just for his theoretical knowledge but also his practical insights. He’s well-traveled and has seen the different growth momentum in various countries. He shares his insights with me regularly.

His recent book, The Perma-Crisis, co-authored with Gordon Brown, explains the challenges in different countries’ systems and technologies. I’m fortunate to have this kind of global insight from my board of directors.

During my early years with Surfin, I was traveling in Africa, and one experience in Kenya really stayed with me. I was launching Surfin’s business in Kenya, and on the last day of the trip, I was standing on a hill overlooking the beautiful East African Valley. A young Kenyan lady, an SME owner, approached me with handmade scarves. 

I initially hesitated, thinking I didn’t have room in my luggage, but she insisted. Finally, she said something that touched my heart: “If you buy one more scarf, maybe I can buy one more bottle of milk for my baby.”

Her three-month-old baby was peacefully sleeping on her back. I saw her determination and bought a scarf from her. The smile she gave me was angelic. I realized that even a small act of technology—whether it’s a mobile transaction or a simple purchase—can make a huge difference in someone’s life, even in a place as far away as Kenya.

This experience reinforced the mission we have at Surfin: to use technology to make a difference in emerging markets. Our board of directors shares this collective vision of using technology to drive faster economic growth, stronger consumer demand, and more robust SME enterprises. This is how we can make a real impact.

Paulo: We’ve been talking a lot about AI and fintech, but it really all comes down to the impact on families, like the Kenyan lady you mentioned, and the small businesses they run. As you said, this is what brings all of these amazing people together at Surfin—not just the board, but the 2,800 employees across the globe.

I also wanted to bring up that Surfin didn’t raise any money at all over the past seven years, up until now, when you partnered with Insignia Ventures. So, what made you decide to enter the fundraising market at this point in Surfin’s growth, and how has your experience been working with a VC?

Dr. Yanan Wu: Maybe it’s related to my background, as you pointed out. In the past six years, we didn’t raise capital from institutions. We more or less bootstrapped Surfin and focused on organic growth. That approach is probably also in my DNA. I believe in cherishing our capital and making it sustainable. We wanted to stress test our model first, using our own capital, to ensure it worked and could scale in different markets.

We did the groundwork, testing the model in countries across Southeast Asia, Latin America, Africa, and South Asia. Once we felt confident that our model worked in each country, we recycled our own capital to bootstrap the business. Now, we’ve reached a stage where we’ve demonstrated scalable success, with 50% CAGR revenue growth in different markets over the past four to five years.

Thanks to Insignia, we’re now entering the second phase, which is more institutional. We need partners like Insignia to help build an ecosystem. Organic growth can only take us so far. We’ve tested our model, and now we want to collaborate with institutions to unlock further growth.

Now that we have 60 million users, we’re looking at ways to grow even faster and monetize the data. We want to explore synergy opportunities, not only for better financial services but also to provide better consumption experiences for consumers and faster growth for SME owners in these markets.

Paulo: I think Surfin brings a new narrative to company building. In venture-backed startups, companies typically raise a lot of capital initially and then figure out the next steps. But you guys have already figured out what the model is, validated it, and then raised funds to scale and enter the next phase. It’s a more sustainable way of thinking about company building.

As we wind down, I wanted to ask: Surfin has been around for seven years now. What would you say has been the biggest make-or-break moment for you as CEO? A moment of resilience where you had doubts or faced a seemingly insurmountable challenge, but you overcame it?

Dr. Yanan Wu: As a young CEO, though I’m no longer that young in age, I still feel like a baby CEO. We’re still at the toddler stage, just learning to walk. I know that if we develop too fast and don’t pay attention to risk, it can be detrimental to the business. I’ve been in the financial industry for 26 years, so I’ve witnessed various cycles. It’s all about embracing cycles, as not everything is a straight line. Think about it—credit Suisse, a 100-year-old company, can disappear overnight. Even Silicon Valley Bank or Lehman Brothers can vanish.

In fintech, we must also embrace these cycles. At Surfin, I remind myself that we must always pay attention to these cycles. We must make decisions that ensure the business doesn’t overstretch itself. We can’t be blindly focused on growth—we must remain sensitive to the risks.

Secondly, as CEO, I also have to be aware of technology. We’re riding the technology wave, but we have to ensure we don’t fall behind. One of my personal heroes is Elon Musk, who can take technology and turn it into a product. Technology evolves in cycles, and we must figure out how to apply it to make it deliverable as a business.

As a CEO, I’m constantly reminded of these things. I travel extensively, often taking red-eye flights to visit different countries and stay localized. I always remind my team that the best global companies are those that remain local first. Being global means being relevant in local markets and helping local consumers.

Paulo: As much as you say you’re like a baby CEO, helping Surfin walk as a toddler, it’s clear you’ve already gained a lot of experience. That pragmatism and realism will help drive the company forward, thinking about risk and technology opportunities.

If anyone among our listeners or viewers is interested in talking more to Dr. Wu about risk or technology opportunities, feel free to reach out to him or his team. I’ll leave the contact details and LinkedIn info in the podcast description.