The digital age is driving exponential growth across various industries, with Fintech emerging as a frontrunner, rivaling even AI. In Southeast Asia, where Singapore stands as a financial leader, the region is rapidly becoming a Fintech hub. Amidst this wave of financial innovation, what does the future hold for this dynamic sector?

Techsauce explores these questions through an exclusive conversation between Oranuch Lerdsuwankij, our CEO, and Shayan Hazir, Chief Digital Officer at HSBC, a global banking giant. Mr. Hazir shares insights into the keys to success and provides an in-depth analysis of the future of Fintech in Southeast Asia.

HSBC: A Legacy of Financial Stability for Over 150 Years

HSBC, also known as The Hongkong and Shanghai Banking Corporation, boasts a rich history spanning over 150 years. Founded in Hong Kong in 1865, HSBC has expanded its network to encompass 64 countries worldwide. They offer a comprehensive suite of financial services, including accounts, loans, credit cards, and investment solutions. HSBC's expertise lies particularly in serving corporate clients, multinational companies, and high-net-worth individuals, a focus they have maintained since their entry into Thailand in 1887. But what is Shayan Hazir's vision for the future of Fintech?

The Fintech Landscape in Singapore: A Success Story

The discussion begins with Oranuch Lerdsuwankij inquiring about the overall Fintech landscape in Singapore. Shayan Hazir provides insights into the key drivers of success and the challenges Fintech companies face in this dynamic market.

Mr. Hazir highlights significant growth in Singapore's Fintech sector, with investments surging from 20-50 million USD in 2016 to 4.2 billion USD in recent years. This underscores Singapore's potential as a leading Fintech hub in the region. Several factors contribute to this success:

• Government Support: The Monetary Authority of Singapore (MAS) plays a vital role in promoting and supporting Fintech.
• Talent Pool: A supportive environment for innovation attracts talent from across the globe.
• Funding Sources: Diverse funding options are available, including venture capital and institutional funding.
• Regulatory Framework: Clear regulations foster innovation and development.
• Collaboration: Strong collaboration exists between the public and private sectors, including banks and Fintech companies.

A distinctive characteristic of Singapore's Fintech landscape is its focus on B2B business models, aligning with the market size and business needs. However, challenges remain, such as expanding the ecosystem to accommodate future growth.

Doubling the Fintech Ecosystem: Collaboration is Key

A key question arises: How can Singapore double its Fintech ecosystem, and what role should banks play in achieving this goal? Mr. Hazir emphasizes the importance of collaboration between banks and Fintech companies.

Collaboration as a Growth Driver

Mr. Hazir emphasizes that collaboration between banks and Fintech companies is crucial for the sustainable growth of the Fintech industry. Each party brings unique strengths to the table:

• Fintech: Agility, flexibility, and adaptability.
• Banks: Trust, experience, governance, and regulatory knowledge.

By combining these strengths, Fintech companies can innovate and grow effectively. HSBC exemplifies this collaborative approach through investments in Fintech companies like Marketnode.

...find a balance where you can combine the knowledge and expertise of large financial institutions with the speed and agility of smaller fintechs.

Human-Centric Innovation: The 4Cs

Beyond collaboration, innovation is another crucial driver of the Fintech industry. Mr. Hazir believes that effective Fintech innovation should be human-centric, prioritizing customer needs and developing solutions for real-world problems. He introduces the “4Cs” framework to guide impactful innovation:

• Creativity: Thinking outside the box and exploring new ideas.
• Compassion: Understanding customer needs and challenges.
• Cooperation: Collaborating and brainstorming to create solutions.
• Consistency: Maintaining a focus on continuous development.

He emphasizes the need to be a customer- and idea-driven organization, leveraging technology to solve problems efficiently.

“We need to be a customer- and ideas-led organization, and then you walk back to the technology to solve that in the most efficient way.”

How will financial services evolve over the next five years?

Over the past five years, we have witnessed significant changes in the world of financial services, particularly with the rise of AI. What does the future hold for financial services? Shayan Hazir offers compelling insights on this topic.

From “Improvement” to “Revolution”

Hazir believes that technology will not merely “improve” traditional financial services, but will instead “revolutionize” them entirely. “We need to think outside the box,” Hazir challenges. “Consider how we can eliminate the need for call centers? That would be a major transformation.”

Hazir sees technologies like AI, Blockchain, and Quantum Computing as key drivers of this revolution. However, he emphasizes the importance of having a clear “vision” and avoiding the trap of simply applying technology to existing processes. One example he gives is how AI can reduce “decision fatigue” caused by information overload, enabling more efficient and effective decision-making.

Balancing Innovation and Regulation: Insights from International Experience

With his extensive international experience, Shayan Hazir offers valuable advice for Fintech companies navigating the balance between innovation and regulation.

Collaborating with Regulators for Sustainable Growth

Hazir recommends that Fintech companies actively engage and collaborate with regulatory bodies. He highlights Singapore as a prime example, where a progressive regulatory approach has created a “safe space” for Fintech startups. Initiatives like the regulatory sandbox and Project Veritas allow for experimentation and innovation within a controlled environment. This collaborative approach enables Fintech companies to develop new solutions while ensuring responsible development within a clear regulatory framework, ultimately fostering sustainable growth.

...innovate with your regulator... the regulator creates safe spaces in terms of projects and sandboxes where you can actually safely experiment…

Fintech: Opening Doors to Financial Services for Everyone

Beyond wealth creation, Fintech plays a crucial role in reducing inequality and promoting financial inclusion for all. Shayan Hazir shares valuable perspectives on this aspect.

E-commerce and Digital Wallets: Key Drivers of Financial Inclusion

Hazir highlights the growth of e-commerce and digital wallets as significant factors enabling greater access to financial services in Southeast Asia. This is especially important for those who lack access to traditional banking. Hazir encourages banks to support financial inclusion by collaborating with Fintech companies that excel at reaching diverse customer segments. He cites HSBC's support of Funding Societies and Atome as examples of platforms that facilitate broader access to financial services.

Overcoming Regulatory Hurdles Through Collaboration

Technological advancements often bring new regulations, and the Fintech industry is no exception. How can banks and Fintech companies work together to navigate these challenges?

Beyond Investors, Banks as Mentors

Shayan Hazir believes banks have a crucial role to play in supporting Fintech companies - not just as investors, but as mentors. They should provide guidance, advice, and support to help these companies grow. He emphasizes:

I think all problem statements require co-creation... it's also incumbent on us to inform and educate regulators.

Collaboration and Communication with Regulators

Hazir also advises Fintech companies and banks to collaborate in educating regulators about new technologies and business models to foster understanding and support for the growth of the Fintech industry.

Fintech Companies Need to “Do Their Homework”

For Fintech companies seeking collaboration with banks, Hazir suggests they “do their homework” first. This means thoroughly researching and understanding the bank's needs and demonstrating clear value and differentiation from competitors.

Banks as “Big brothers”

Hazir sees banks as “big brothers” to Fintech companies, providing not only funding, but also mentorship, guidance, access to new markets, and support for business growth. He highlights HSBC's programs that support Fintech delegations to various countries as an example. He emphasizes a mutually beneficial relationship where the success of Fintech companies contributes to the success of banks and the broader financial ecosystem.

...it's the job of the bank to be almost like [in a] big brother role to financial technology companies... you shouldn't only bring them on as customers, but you should adopt them. Your intention should be to see them grow.

Fintech Advances with Human-Centricity, Collaboration, and Mentorship

The insightful conversation with Shayan Hazir, Chief Digital Officer at HSBC, paints a bright future for Fintech in Southeast Asia. He highlights three key factors that will drive sustainable growth in the Fintech sector:

• Human-centricity: Fintech innovation must stem from a deep understanding of customer needs and offer solutions that address real-life challenges.
• Collaboration: Fintech companies and banks must collaborate, leveraging each other's strengths to foster innovation and drive financial inclusion.
• Mentorship: Banks have a crucial role to play as mentors, providing guidance, advice, and various forms of support to Fintech startups.

Furthermore, Fintech startups must “do their homework” by understanding the needs of banks and clearly demonstrating the value they offer. This will pave the way for mutually beneficial collaborations. Ultimately, the success of Fintech will contribute to broader economic growth and create equal financial opportunities for everyone.