Lawrence Loh, UOB – Managing Director & Group Head of Digital Banking
"The region has huge unmet needs in financial services and this presents substantial opportunities for FinTech solutions to be used.
As Group Head of Business Banking, he is responsible for the small business customers that bank with UOB in Singapore and the region. With his wide insights into the modus operandi of small businesses, Lawrence is familiar with what makes them tick. He shares why ASEAN is well positioned to benefit from the FinTech revolution and how UOB, as Small and Medium Enterprise Bank of the Year for 2016 & 2017 consecutively, is well positioned to support the SMEs, which are the backbone of economies in Asia.
What about this region enables it to be conducive to FinTech?
ASEAN societies have always been strongly entrepreneurial. Now private and public together more than ever to foster innovation, and to create conducive business environments to attract talent. Most of all, the region has huge unmet needs in financial services, and this presents substantial opportunities for FinTech solutions to be used.
What more can be done?
In a recent survey conducted by UOB, business customers are more likely to rely on their trusted primary banker to recommend related services such as accounting, payroll and e-invoicing to improve business productivity. This is an area where I see collaboration working well – where FinTech companies such as Xero can partner with us to reach more SMEs, and we provide added value by offering such solutions through a single, integrated platform. To further support the whole SME ecosystem, UOB recently signed a regional partnership with SAP to provide these services overseas.
With the lines between banks and other ecosystem partners blurring, governments in the region, while engaging SMEs, work alongside Financial Institutions and FinTech companies to understand the rapidly evolving business landscape, and together seek a direction that best suits the country, and help them to stay ahead. The creation of workgroups and sandboxes we see in recent times will facilitate this cross-sector and multi-party collaboration.
When will these changes happen?
It is already happening. The last two years have seen the regulators in ASEAN countries looking to leverage FinTech to improve the lives of their citizens – from financial inclusion to improving efficiency through digitisation. Regional countries each have their own sandboxes, focus areas, and FinTech associations that actively engage their local ecosystem.
Indonesia is offering government scholarships to their local start-ups to foster and incubate more ideas to fruition. The updated regulation by Otoritas Jasa Keuangan (OJK) on Peer-to-Peer financing is meant to protect consumers and enable FinTech companies to exist in the P2P space as well.
In May, the Securities Commission Malaysia introduced the Digital Investment Management framework, setting out licensing and conduct requirements for the offering of automated discretionary portfolio management services to investors. Better known as Robo-Advisory, this framework will enable access to a suite of digital wealth management products. Malaysian Digital Economy Corporation (MDEC), the lead agency in driving the digital economy in Malaysia, has identified FinTech as one of its core focus areas.
What does it take to be a unicorn?
It is definitely not easy – of the tens of thousands of FinTech companies formed in the last 10 years, there are less than 10 unicorns from China and even fewer from ASEAN.
How have they succeeded where others have failed?
To me, you must first have a strong and defensible business proposition that addresses the key pain points of your target market (which must be large for starters). Then you need to have a clear strategy on how to deliver this quickly and consistently, and a strong team to make sure this happens.
When you do these well, your business will grow. And VCs will want to fund and help scale your business. Whether your business becomes a unicorn or not should be secondary. In my opinion, this should just be a natural progression, a by-product of all the right decisions and actions taken.