fintech in asia
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Private and Confidential | All Rights Reserved 2015Private and Confidential | All Rights Reserved 2015
Seunghyun Cho (Joe) Chairman
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WHAT IS FINTECH?
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AGENDA1. What is Fintech?
a. Ecosystemb. Categoriesc. Investments
2. Global Industry Trendsa. Global investmentsb. M&Asc. IPOs
3. Why Asia Now?a. Mobile Technologyb. Unbanked Populationc. Underserved
Population + SMEsd. Fragmented Marketse. Government Support
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In the pastFinancial technology were developed bylarge financial institutionsBig-scale + Complex +Difficult to Use + Highly Regulated
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Financial Technology
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ATMs
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Post Financial CrisisFinancial institutions’ wallets tightened, Employees jumped off the ship
Fintech StartupsKick Started
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This Marks The Beginning‘Birth’ of fintech
‘Death’ of financial technology
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TransformationMobility of technologyMobility of ideasMobility of payments
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Common themesacross fintech sector
Monetisation of dataFraud and identity protectionInfrastructure replacementDisintermediation
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Fintech Main Themes 1. Payments
Apple, Google, Paypal, Amazon, and Alibaba have
payment solutions that replace physical wallets and
credit cards
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Fintech Main Themes 2. Lending
Zopa, Lending Club, and Funding Circle offer peer-to-peer lending solutions that
match lenders and borrowers on their online platforms
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Fintech Main Themes 3. Investment
“Robo-advisers” like WealthFront use data
analytics to dispense online personal financial advice and
investment management services.
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Traditional vs Emergent FintechTraditional Emergent
Positioning
Market players generally perceived as facilitators which are large, incumbent technology vendors supporting the financial services sectorEg: Fiserv, SunGard, Infosys, First Data
Market players are disruptors and innovators by nature. They are disintermediating incumbent financial services or provide new technology solutions to service existing needsEg: Zopa, Fidor Bank, Transferwise
Infrastructure
Companies focus on support, maintenance and provision of existing infrastructure
Two operating models have merged of either utilising existing infrastructure which tends to be controlled by established players or by replacing them completely
This is a high risk strategy but provides high returns if successful
Revenue model
Operate under established revenue models that tend to use cost per transaction, percentage of assets or license fees
Emerging revenue models are broad and tend to function using different types of revenue streams.
Source: EY Landscaping UK Fintech
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Big Fintech TrendsDigital & Mobile PaymentsAuthentication & BiometricsBlockchainCloud ComputingBig DataLearning Machines
Private and Confidential | All Rights Reserved 2015Source: http://programme.innovatefinance.com/e/bigdata
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Loans & Consumer Credit
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P2B & B2B Finance
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Payments & Transfers
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Wealth Management1.Personally tailored portfolios and
diversified investment plans 2.Clean user interface 3.Online platforms and processes to
make opening accounts fast and easy 4.Smart Phone apps 5.Interactive knowledge sharing
platforms6.Low fees and incredible transparency
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Open API Platform
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US Fintech Takes The Lead
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2014 USA
$9.89 B
Global fintech investments tripled,now more than $12 B
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Fintech Investments
Source: CB Insights
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Fintech Exits
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$18.9 B
We have seen 192fintech M&A deals in 2015 so far
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18 IPOs
$4.9 B
IPO < M&A
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2014 Fintech IPOsInsurance/Healthcare Fintech led the way with 6 IPOs
No companies reported positive net income in 2014
8 Fintech companies achieved ‘unicorn’ states with market cap > $1 B
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2014 UK Fintech Revenue:£20 B
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• WHY ASIA NOW?
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Unbanked
Why Asia?Why Now?
UnderservedFragmented Markets
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1. Widespread use of mobile 2. Mobile tech infrastructure in
place
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Mobile Phone
Mobile Internet
Singapore 152% 65%Indonesia 121% 21%
South Korea
109% 63%
India 75% 16%Philippines 113% 32%Malaysia 137% 54%Thailand 150% 40%
China 95% 42%Japan 123% 34%
Myanmar 26% 7%
Very high mobile phone penetration+ growing mobile internet penetration
Source: GSMA Intelligence 2014
Asia:• High mobile
penetration• Young population• High adoption rates
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2014 Mobile Internet & Projections
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Unbanked PopulationGlobal Unbanked 2.5 B
Indian transactions still 95% cash
More than half of the world’sunbanked come from Asia
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SMEsToo small for big banks Too big a segmentto be ignored
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India
Malaysia
Thailand
Singapore
South Korea
Japan
Indonesia
China
0% 10% 20% 30% 40% 50% 60% 70%
9%
33%
37%
50%
50%
53%
57%
59%
SME to GDP Ratio (%)
SMEs in Asia are underserved
Source: Asia Development Bank 2013
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SMEs
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Fragmented MarketsDespite Asia’s potential,there is no one solution
Financial services andmarkets growing atdifferent rates across Asia
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Fragmented no more…
The rise of micro markets
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>>B2B Markets & Micro Markets
Example:China leads the way
Opportunities
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Government Policies‘Bad Cop, Good Cop’
Big boys are squeezedBut approves new players, new rules
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Tremendous government support for fintech
Positive regulatoryframeworks
Financial grants + schemes
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Government // Financial
Singapore MASS$225 million over 5 yearsKorea Development Bank and Industrial Bank of Korea 200 billion won (US$185 million)
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Government // Regulations Thai SEC now allows SMEs to raise funds via crowd-funding portals
Malaysia SC announces 6 approved equity crowd-funding platforms
Korea FSC allows banks to fund fintech firms//Internet banks allowed
Philippines GPH launched e-peso(single e-payment platform)
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Government // Programmes Singapore MAS Fintech & Innovation Group, FTIG
Hong Kong Internet Finance Council, HKIFC, was set to promote fintech in HK
Fintech development at the top of Korea’s governmental agenda
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ASIAN OPPORTUNITIES
Wealth management
Big data
Peer-to-Peer (P2P),Peer-to-Business
(P2B)
Mobile paymentsSocial
Trading
Insurance
Capital raising
Internet bank
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MARVELSTONE PLAN
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FundEastA fintech platform
Focusing on Asian markets, it combines different segments under one umbrella to form a financial group
The structure allows the development of new brands to grow and thrive
Its competitive edge lies in its ability to structure financial products in both traditional and alternative investment spaces
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