covid-19

May 15 2021

Fintech Innovation Lab Asia Pacific Returns in 2021, Aims to Help Early-Stage, High-Potential Startups

The Fintech Innovation Lab Asia Pacific program has now returned for its eighth edition this year with additional opportunities for early-stage and high-potential startups.

Cyberport, a founding partner, will be giving finalists from the 2021 cohort the chance to take part in the 2-year (or 24-month) Cyberport Incubation Program (CIP) and will also provide access to Cyberport’s Marco Fund.

In statements shared with Fintech News HK, Fergus Gordon, MD and banking industry lead for growth markets at Accenture, noted:

“Accenture and Cyberport have a common goal of driving digital adoption in the Asia Pacific (APAC) financial services ecosystem. Digital innovation within financial services skyrocketed during the COVID-19 pandemic as banks look to ways to increase efficiency and engage customers amidst an increasingly digital landscape. Asia remains a hotbed for innovation among both established players and startups, and consequently interest is surging among investors.”

During the last few years, many prominent Fintech professionals have benefited from participating in the training workshops and related networking events that take place at the Cyberport Campus under Fintech Innovation Lab Asia Pacific.

Even though there are COVID-related travel restrictions, the event organizers plan to continue this year, but activities will be carried out in “hybrid” mode. Local teams can meet up in-person with some mentors at Cyberport, meanwhile, the international teams can take part in these events via online platforms.

Gordon added:

“The … 12-week program has nurtured leading startups across various fintech segments including WeCash, LeapXpert, TNG Wallet and Fano Labs. … Cyberport also offers flexi workspace to our cohort during the program, a bonus for those non-HK based startups.”

The program’s Alumni have said that the initiative has helped them with taking their companies and ideas to the next level. They claim it has assisted them with accelerating their growth efforts and has connected them with strategic business partners.

59 firms have now graduated from the Fintech Innovation Lab Asia Pacific and have secured a total of $716 million in capital.

Eric Chan, Chief Public Mission Officer at Cyberport, remarked:

“20 world-renowned financial institutions will share their operational pain points during this year’s program, allowing participating startups to contribute innovative solutions that cater to market needs.”

The 2021 program will aim to offer a new challenge-based element which will reportedly include 6 problem statements from financial institution partners. These problem statements may include scenarios such as using Regtech to enhance compliance efforts, enabling growth in management in the Greater Bay Area, and addressing various workforce requirements in a post-COVID business environment.

The startups that will submit the most appealing or innovative ideas may get mentoring from senior management professionals from 20 leading financial institutions and leading Fintechs as well. The 2021 program is currently accepting applications (until May 17, 2021).

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May 13 2021

UK Fintech Startup ilumoni Acquires £1.2M in Seed Funding, Receives FCA Authorization

ilumoni, a Fintech app that aims to assist consumers with borrowing, has secured £1.2 million in an over-subscribed seed funding round. ilumoni has finalized its round after introducing the Beta version of its app earlier this year.

ilumoni is a “purpose-led,” AI-enhanced Fintech solution provider that previously acquired £455,000 in capital through pre-seed funding. The company has also rolled out the initial build of the first version of its app. In January 2021, the app reportedly received full authorization from the UK‘s Financial Conduct Authority (FCA). The app has also managed to attract its first beta users.

The free-to-use app assists consumers with better understanding and managing how they borrow funds. ilumoni aims to offer rich, personal insights into how people borrow and pay back money, with complete visibility of what they might owe, including how long it could take to make repayments and how much their borrowing will end up costing them in interest. These features are reportedly combined with prompts and future scenarios that consumers can engage with to determine repayment amounts or alternative products that might cost less in terms of interest.

This round of investment was over-subscribed. It has managed to attract 20 other angel investors as well. The capital acquired should help with taking the product to market. A general App and Play Store release are planned for later in 2021. Early adopters may act as beta users of the app through the official ilumoni website.

ilumoni has appointed investor James Eden and current investor Simon Moran to its board of (non-executive) directors.

Eden stated:

“While there are many emerging tools that champion consumers’ financial degrees of freedom, there aren’t any that provide an independent view of borrowing and debt, despite the impact it can have on people’s financial and mental wellbeing. The purpose behind ilumoni, level of innovation and credentials of the team were more than enough to convince me this was an investment worth making. So much so that I am delighted also to be joining the board.”

Ilumoni CEO, Gary Wigglesworth, remarked:

“We’re thrilled to have such a ringing endorsement of ilumoni with an over-subscribed funding round. There is a huge opportunity to help people to borrow well and it’s more important now than ever.”

The FCA reports that more than 50% of all UK adults have been paying interest on their borrowing, increasing to nearly two-thirds or 66% of working age adults. Recent stats from StepChange reveal that over 40% of consumers have reported a negative change in their circumstances since the COVID-19 outbreak.

Wigglesworth added:

“Many borrowers need to manage their debt better, yet there is very little help available until they’re faced with formal debt management, such as IVAs. As with anything, prevention is better than cure, and we believe in better borrowing for everyone. ilumoni provides a tool that not only demystifies borrowing but provides practical ways to relieve the stress of debt and reduce how much it costs. We can’t wait to show people how, very often, small changes can make a big difference, and encourage them to borrow well.”

The FCA study further noted that almost 60% (30.6 million) of UK adults are overwhelmed by or “overconfident” in their financial numeracy; 45% of 18-24 year-olds say their financial knowledge is fairly low (an increase from 1 in 3 back in 2017).

Wigglesworth also mentioned:

“Let’s face it, for most of us, calculating the cost of your borrowing and making sure you pay back optimally on the best deals is neither easy nor a fun way to spend your time. And we now expect young adults to emerge from school with financial literacy skills, yet they have no frame of reference. We want to change that and give people the tools to help them manage their borrowing, so that they can spend time on the things they want to do, knowing their borrowing is under control.”

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May 07 2021

Government Spending Means Investors Should Seek Hedges

This week I came across a statistic that shocked me. It turns out that 34% of all US income currently comes from the government. Here’s a chart from an article on ZeroHedge showing the rise of government “transfer payments” to citizens.

I just can’t believe that more than a third of the entire nation’s income is currently dependent on the federal government. That number includes stimulus checks, unemployment benefits, welfare, social security, etc.

Many people think that once the COVID-19 crisis is over, things will return to normal. But I don’t think so. Back in the 1960s, only around 7% of all income came from the government. That figure had grown to around 17% before this most recent crisis began. The pandemic merely accelerated a trend that was already in place.

Once a government benefit is in place, it’s very difficult to cancel it. We seem destined to enact “universal basic income,” where everyone gets a monthly stipend.

Workers Not Rejoining The Workforce

One of the most troubling aspects of all of this is the unintended consequences. When you give people just enough money to get by, there’s the risk that some of them will lose their motivation to work. What’s the point in working when you can collect almost the same paycheck by not working?

Now that the crisis is winding down and many are vaccinated, companies are having trouble hiring. Bloomberg just ran a feature article about this “Job Paradox.” Here’s an excerpt talking about how some economists view the situation.

“…the labor force participation rate remains well below pre-pandemic levels…

And anyone who previously made less than $32,000 per year is better off financially in the near term receiving unemployment benefits, according to economists at Bank of America.“

Other reasons for people not returning to work include looking for jobs with benefits and jobs with a guaranteed number of minimum hours. Needless to say, I am extremely sympathetic to all the people put out of work by COVID-19. It’s an awful thing, and we do need to support these people until they can return to work. I am, however, also concerned about the direction we’re headed with all of this.

We’re going to have to print money to pay for all these programs — and that doesn’t happen without consequences. I think we’re likely to see stagflation (slow growth and high inflation) that could last a while.

I don’t really see any way to avoid what’s coming. More spending, more debt, more inflation. This, in short, is why investors need hedges.

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May 03 2021

Fintech Ant Group Affiliate MYbank Is Planning to Expand Operations in China to Serve More Rural SMEs

China-based MYbank, an online private commercial bank and an affiliate of the Ant Group with a special focus on working with rural areas and SMEs, has revealed that it will be doubling the number of rural counties it serves in the coming years.

MYbank and its business partners plan to provide financial services in 2,000 rural counties in China within the next four years (by 2025). This should coincide with the bank’s 10th year since its launch. The initiative will ensure that rural clients are able to access the same modern financial services that are offered in some of China’s largest cities. The initiative should also help with addressing the last-mile problem in the rural finance sector.

This latest announcement from MYbank has come along with the release of the firm’s 2020 annual report, which reveals that MYbank had been serving 70% more (year-on-year) SMEs in 2020 when compared to 2019. This rise in activity has mainly been driven by MYbank’s expansion into rural areas.

Since launching operations 6 years back, MYbank has managed to serve clients in over 750 different counties across China.

Xiaolong Jin, President of MYbank, stated:

“We have continued to record remarkable growth in customer base for five consecutive years. We expect rural finance to play a significant role in advancing financial inclusion, and will further our efforts to make rural finance more accessible with our financial institution partners.”

MYbank has reportedly kept its non-performing loan ratio at around 1.52%, which is a lot lower than the 2.99% average for Chinese SME loans (as of June of last year).

MYbank had teamed up with the All-China Federation of Industry and Commerce and the China Banking Association (in March 2020) in order to introduce a “Contactless Loans” initiative, in which 118 Chinese banking institutions had come together to provide supportive loans for small and medium-sized businesses as they tried to maintain operations.

The initiatve reportedly offered more than RMB 870 billion worth of loans to many different SMEs in sectors that were negatively impacted by the COVID-19 outbreak (including local dining and retail outlets).

During the 6 months since the campaign began, MYbank and its partner banks have waived RMB 665 million in interest payments for Chinese SMEs.

Source

Apr 30 2021

Monetary Authority of Singapore Dedicates S$42 Million for Regtech Initiatives

The Monetary Authority of Singapore (MAS) has announced a new grant program targeting Regulatory Technology or Regtech that is said to be an enhancement of the Digital Acceleration Grant (DAG) scheme to accelerate technology adoption. In a public statement, MAS said it will commit S$42 million for the Regtech grant scheme and enhanced DAG scheme.

Sopnendu Mohanty, Chief Fintech Officer at MAS, stated:

“MAS remains committed to the digital transformation of the Singapore financial sector. We expect the RegTech ecosystem to flourish with widespread use of innovative solutions to aid risk management and compliance. The Digital Acceleration Grant has enabled the smaller FIs and FinTech firms to adapt to the challenges in the past year and we will continue to support these firms as they accelerate their digital transformation journey. We encourage FIs to tap on these grants to embed technology into the firms’ DNA.”

The grant is being made available to Singapore-based financial institutions (FIs) and seeks to promote the adoption and integration of technology solutions in the risk management and compliance functions of financial services firms.

There will be two tracks for the grants including:

The pilot track: FIs can seek funding to pilot potential RegTech solutions before embarking on full-scale integration of the product into its operating environment. Funding for this track will be capped at S$75,000.
The production level project track: FIs can seek funding to develop larger-scale customised projects that can be fully integrated into the FI’s systems. Funding for such projects will be capped at S$300,000.

MAS states that both tracks can be used to support either in-house development or commercial partnerships with Regtech firms based in Singapore.

The DAG was launched in April 2020 to help smaller FIs and Fintech firms adopt digital solutions to better cope with the impact of COVID-19, and to position themselves for subsequent recovery and growth. As of 31 March 2021, MAS reports that it has received over 1,100 applications from both FIs and Fintech firms.

MAS said it will commit an additional S$30 million to the DAG until 31 December 2021 to encourage the industry to adopt digital solutions that enhance productivity, cybersecurity, and operational efficiency. This brings the total grants available under the DAG scheme to S$65 million.

Ian Lee, Vice President of Business Development at Merkle Science, a Singapore-based blockchain transaction risk monitoring and analytics platform, issued a comment on the new Regtech funding.

“Regtech solutions are having a difficult time gaining market share here in Singapore and abroad. Oftentimes, startups at their initial stages have to give away their solutions at a low cost — or sometimes even for free — in order to gain traction and receive feedback on their product. With startups’ limited resources, it is difficult for these innovative new startups to compete with larger legacy firms. With this new $42 million grant, the MAS is supporting the development of local Regtech startups and encouraging innovation in two ways. Firstly, the grant furthers the existing Digital Acceleration Grant (DAG) scheme, which is available to any startup that services financial institutions. Through the extension of the DAG, financial institutions can also use the grant to subsidize their cost of operation.”

Lee added that an interesting feature of the new Regtech grant is for providers to pilot their solutions and test for efficacy under a paid model.

“While the details on this feature have not been released yet, it sounds like there may be subsidies for established companies to use and test the solution before the startup moves the solution to full-scale production.”

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