June 26th, 2016 by: Grow VC Group

The Monetary Authority of Singapore (MAS) launched a consultation paper in February last year proposing measures to facilitate access capital for startups and SMEs. With the responses received, 8 June 2016 MAS announced new measures to simplify the use of securities crowdfunding (SCF) for companies that are looking to raise funds, as well as for crowdfunding platform operators.

For platform operators, MAS will simplify the pre-qualifications needed for those raising less than S$5 million within 12 months, allowing them to do that without having to issue a prospectus. The changes will simplify checks needed for investors so that the process can be quicker and easier to execute.

Financial requirements for platform operators who raise funds only from institutional and accredited investors, will be reduced, making it easier for them to be licensed as dealing intermediaries, “as long as they do not handle or hold customer monies, assets or positions, and do not act as principal against their customers”. In practical terms, the minimum capital requirement will be reduced from S$250,000 to S$50,000, the minimum operational risk requirement will be reduced from S$100,000 to S$50,000 and the requirement for a S$100,000 security deposit will be removed.

In conclusion, this represent a positive development for those looking to start a new digital investing platform in Singapore, but it’s not the only good news. Last year the Financial Sector Technology & Innovation (FTSI) scheme launched, committing SGD $225 million ($167 million), in a five year plan to support financial technology innovation. In April MAS announced additional initiatives to boost the country’s position as a global hub for digital finance, with the launch of the first Singapore FinTech Festival, to be held from 14 to 18 November 2016, and it was just last week that MAS and the Australian Securities and Investments Commission (Asic) signed a new cooperation pact, called the Innovation Functions Cooperation Agreement, that will allow fintech firms in Australia and Singapore to speed up the process of entering each other’s markets.

Read the whole article and more details on Crowd Valley News.

Monetary Authority of Singapore

June 23rd, 2016 by: Grow VC Group

What is Insurance Technology (InsurTech) all about? It’s a sub-sector of Fintech that is growing fast and vigorously, with annual investments that increased fivefold in the past three years, totaling $3.4bn of funding poured into the sector since 2010. Insurance behemoths are paying attention like never before. 

PwC just published a new report on fintech, showing that about 90% of the insurers surveyed are fearing the loss of business to startups, with about 70% of insurance companies that said to have already taken action to face the new challenges and opportunities presented by fintech. 

While the insurtech industry is still in its infancy, there are already a number of companies that have partnered with global leading insurance companies and raised several millions in funding from top venture capital firms. “There is a risk of missing an opportunity to deliver customers a similar experience to one they already receive from retail and technology companies. One size simply does not fit all in insurance anymore and, by working alongside InsurTech companies, companies can begin to reposition themselves at the cutting edge of customer interaction. […] InsurTech will be a game changer for those who choose to embrace it.” said Stephen O’Hearn, global insurance leader at PwC.

Lemonade, an insurtech startup backed by Sequoia Capital and with Warren Buffett and Berkshire Hathaway as one of the reinsurance partners, was the first  to launch as an online peer-to-peer insurance carrier, but there are now a good number of companies that joined the market, including Guevara,  Uvamo and Friendsurance, that are basically acting as brokers with the objective to cut down insurance fees for consumers by pooling policyholders together online in small groups.

Pressure on margins and loss of market share seem to be top concerns that insurance executives think the fintech wave could bring, while they see cost reduction and differentiation as possible positive outcomes. As Jonathan Howe, UK insurance leader at PwC, said, “the differences between startups and incumbents should be embraced as both are vital to the future of the industry. ” We can’t agree more with his statement. It’s always more clear that there is no sector in the financial industry, even the most stagnant, that will remain the same, with huge opportunities in sight for those ready to take advantage of them.

Read the whole article on Crowd Valley News.

InsuTech

June 21st, 2016 by: Grow VC Group

Digital finance or fintech is a strong phenomenon on the tip of everyones tongue. The applications however are still often elusive as organizations search how these macro trends impact their existing operations and seek out where they are uniquely positioned and can compete in the market of tomorrow.

Our contention is, that what we are seeing now, is not only a technical advancement in financial services, but a fundamental change in the value chains with technological disintermediation. Fancy terminology aside, even this ‘concept’ or development has many facets and is happening on various levels, in different verticals and from both the bottom up and top down. Let’s look at some examples for how this manifests itself in the market.

  • Data at your fingertips, literally. Consider the vast amount of data stored on your handheld device, from your health information, your exercise habits, routines and other private, but very telling information about your life.
  • Augmented reality – bringing the banker into your home. What if it was possible to pick up your handheld and walk into the proverbial branch, only on your terms and in the comfort of your home.
  • The fundamental questioning of existing structures. The father of the lean startup methodology, Eric Ries has set out to do that with his new initiative called the Long Term Stock Exchange (LTSE) (link to: http://qz.com/704657/eric-ries-ltse-long-term-stock-exchange/) that would incentivize long term value creation through a new framework for what we’ve accepted as the Exchange.

These discussions are all based on real data and applications being worked on today. Given the amount of talent and dedication working on these applications, the implications will surely be vast, diverse and long term. We see concepts of big data, augmented reality and the malleable value chains as a set of ongoing discussions that we’re fortunate to be part of, as they are literally shaping how financial services will look tomorrow.

Read the whole article on Crowd Valley News.

Crowd Valley mobile finance

June 20th, 2016 by: Grow VC Group

On 7-8 June 2016, TradeUp (a Grow VC Group company) Founder and CEO Kati Suominen joined the central point for leaders in the global trade and supply chain ecosystem, the World Trade Symposium, in London. Co-sponsored by the Financial Times and MISYS, the leading financial services software provider, the exclusive high-level forum featured global and regional leaders in business, finance, technology, politics and economics – to inspire, educate, and foster the future of connected commerce.

Suominen spoke on a panel “Trade and globalisation: What’s working and what needs to change as trade, finance, technology and people converge?” featuring Ken Ash, Director of Trade and Agriculture, OECD; Robert Koopman, Chief Economist and  Director of Economic Research and Statistics Division, World Trade Organisation (WTO); Michael Gidney, Chief Executive, The Fairtrade Foundation, and Douglas Lippoldt, Senior Trade Economist, Global Research, HSBC Holdings. Alexander Malaket of OPUS Advisory Services International moderated.

Suominen discussed ideas around:

  • Helping export credit agencies work with a broader set of players than banks (such as alternative finance platforms) to help export-driven SMEs secure credit
  • Why venture capital and private equity funds should view export-driven companies as an outperforming asset class
  • The critical importance of new sources of growth capital for companies’ global competitiveness now that many companies are “born global” and unbankable during their first inroads into international markets
  • Importance of public-private partnerships to undo bottlenecks to ecommerce, illustrated by the multi-stakeholder initiative Aid for eTrade to accelerate ecommerce in developing world she ideated and is building with the United Nations and leading corporations; and
  • Measures to facilitate trade in low-cost items, such as through a plurilateral agreement on de minimis.

Suominen also had the opportunity to moderate a roundtable discussion among banks, SMEs, and trade finance experts on ways that banks could better service SME clients amid the growing capital requirements and tight KYC/AML requirements.

Read more on export, globalization and their funding at TradeUp.

TradeUp Kati Suominen

Kati Suominen, TradeUp CEO, left.

June 17th, 2016 by: Grow VC Group

Recently I had the privilege to discuss changes and macro trends globally in different industries with a group of change management executives. While we discussed various topics, including incumbents abilities to innovate in new markets, cannibalization among other topics, we got talking about the changes of financial services institutions becoming the new effective ‘bit pipes’ (comparison from telco’s) and more so, if this is actually a bad thing?

To take a step back, the telecom sector went through a change where telecom operators largely provided the infrastructure which was both low margin yet difficult, cost-intensive and expensive to maintain and new innovators (think Skype) came into provide services on top of this infrastructure. And more often than not, these innovators would provide the high margin services sought after by clients effectively dis-intermediating the telco and cementing the telco’s position in the background.

With the requirement and trend toward open APIs of financial services and core financial products, a similar type of dis-intermediation is in effect in financial services. Further than that, it seems together with macro trends such as declining consumer sentiment toward banks and new innovations in the customer experience, financials services firms are being pushed farther and farther into the background.

Change is inevitable and all markets move toward greater efficiency, or so the sayings go. The ultimate beneficiary of progress in markets is the end user and in financial services this is visible in various ways, including a more modern way of attaining services such as wealth management and core banking, to more pressure on prices and competition in specialist services such as foreign exchange, transfers and payment services.

Business also face various complexities beyond new positioning, least of which comes with timing in a new market. Particularly when faced with difficult choices of cannibalization of existing business lines and competing on costs with new innovators, the question of when to act can be paramount in optimizing opportunity and potential lost revenue from existing business lines. Too early can be devastating, but too late can come at a high alternative cost (and down the line real cost) of failing to establish organizations as relevant let alone thought leaders in new markets.

Regulators and policy makers also have to adapt to new changes, which comes with the need for understanding what the market is and what it is not, where it is going and which growth opportunities it presents. Confusion and uncertainty cause friction in markets and consistency is what the ecosystem looks for in the policy makers approach. We recognize this is often a difficult and multifaceted task, yet the actions regulators are taking (for example with the financial services sandbox initiatives around the world) make it clear this is in fact a new paradigm and not business as usual.

Beyond a discussion of whether or not this development is good or bad may almost be redundant, as it’s a matter of opinion. Yet it’s now apparent, that the trend is in fact in full swing and proceeding what ever we may think about it. It comes with its growth challenges, and presents various areas of opportunity for organizations looking at creating more modern end user services to underserved segments in the market.

Read the whole article at Crowd Valley News.

money pipes

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