In this two-part interview feature with Liew Nam Soon, Managing Partner for Financial Services ASEAN, we get a deep-dive into the latest insights around the role of fintech hubs.
Liew Nam Soon, how would you compare the various global fintech hubs like London, Silicon Valley, places in China or Singapore?
We did a comparative study called «An Evaluation of the International Fintech Sector» on the major leading fintech hubs across the globe and how they benchmark against one another. Markets cover include U.K., New York, California, Germany, Australia, Hong Kong and Singapore. Israel and China were considered in the report but were not formally benchmarked at the time of the study.
The key benchmark attributes include talent, capital, policy and demand in terms of sub factors like availability of talent, access to capital, regulators‘ support and adoption rates.
Places like the U.K., California and New York tend to fare better than Hong Kong or Germany for talent, suggesting that these places have the required technical talent, financial services expertise and entrepreneurial know-how to establish and grow and fintech business successfully
«Singapore should seek to build a network of investors, tech companies and academia»
Attracting talent is key and while Singapore has a good pool of talent, it’s but not quite deep enough when compared to London, New York or California. The three key skillsets that the right talent should have are technical knowledge, financial services expertise and leadership know-how.
There is also a need to develop a healthier pipeline of tech employees, and more homegrown tech talent such as programmers, designers and engineers. Concurrently, Singapore should seek to build a network of investors, tech companies and academia to create a vibrant entrepreneurial community.
Overall, the U.K. is the most consistent across all attributes similar to Singapore which tends to be stronger in the areas of policy around regulators‘ support and having progressive policy initiatives and regimes in place.
«Singapore tends to operate on a more practical and meritocratic mindset»
The report suggests that the U.K. is leading for now but will face increasing pressure especially with the rise of China as suggested by recent reports, «China and UK Fintech: Unlocking Opportunity» and «The Rise of Fintech in China». Overall, across the various hubs, it depends on the known expertise, culture, resources and opportuntiies available in that particular market.
Are there any specialities across a hub like Singapore that is advantageous in developing the fintech industry?
Singapore tends to operate on a more practical and meritocratic mindset. Also our people are getting more exposed to different cultures and practices from working or studying overseas as well as having a relatively open mindset in welcoming talent from around the world. This gives our talent pool both breadth and depth needed to cultivate a knowledgeable and competitive workforce.
«The government is also highly supportive of entrepreneurialship»
The country also has a very well-structured and tested corporate governance in place, which holds well for the wealth management and private banking segment in respect of robo advice, and data and analytics driven portfolio and investment management. The government is also highly supportive of entrepreneurialship by providing a plaftorm for fintechs to grow and establish themselves.
What are the foreseeable changes to the fintech industry and their offerings?
In the longer term, fintechs will need to scale better in terms of their technological offerings and platforms to achieve more leverage. Technologies like blockchain will probably see alot more uptake as insitutions will see increasing benefit in trusted ledgers to improve operational efficiencies in settlements and payments.
«Many banks will adopt blockchain technology instead of going against it»
In the shorter term, there are alot of opportunities in respect to the online market places in the form of payment disruptors and retail distribution of traditional financial products, An example in the insurance space in terms of telematics or usage and lifestyle based insurance policies like Pay-how-you-drive or pay-as-you-live, which uses data analytics to measure risk.
On blockchain, do you think they would be so disruptive that we eventually won’t need banks anymore?
Our recent «Global Consumer Banking Survey» shows that while banking is always needed, banks need to stay relevant to consumers in order to remain competitive.
That said, the more established banks have an advantage in terms of having their own payment gateways, systems and an existing customer base. Banks will instead strive to remain relevant. Many banks will adopt blockchain technology instead of going against it. Thus the way we see it is that blockchain while disruptive, is not meant to disintermediate or displace banks.
Liew Nam Soon has 24 years of consulting and industry experience. He has worked in industries including retail, private and investment banking, asset management, corporate banking, life insurance and private equity. Prior to joining EY, he was the Chief Transformation Officer of a global insurer and a partner with the global business services unit of IBM. He was also previously a partner with PwC and started his career with Andersen Consulting.
Nam Soon graduated with an MBA from Imperial College, London, and a Honors in Bachelor of Engineering from Nanyang Technological University of Singapore.
