Thesis
Better banking is a NEED not a WANT
Credit card penetration incredibly low
Data is KING - Race to market with # of integrations to get more data
A lot of reverse engineering - perhaps inefficient
Data is usually at the individual / retail
Better tech partners = payment gateways
Bigger tech forward ones already exist like Xendit
Telco data actually can be quite valuable in understanding who is paying utility bills
This data is used for underwriting
Banks are API / data providers AND clients
Most banks have some sort of API but they are supply pretty bad data
Tier 2 banks are more willing to innovate
Top banks are family-run --> messy and difficult
Top down regulations
Necessity to work with regulators
Best markets
Indonesia, Philippines, Thailand/Vietnam, then Malaysia and the rest. in that order.
Singapore doesn't count
Underwriting still rather underbaked
Opportunity in lending and credit scoring although space is very hard to break into bc lending firms like to own the underwriting
Perhaps low margins on data
Business model
Most have a goal of becoming a Truelayer / Tink / Plaid and have similar business models - charging API calls with maybe upfront fees
Being closer to infra usually means better unit pricing but also more upfront and maintenance work
Is the effort worthwhile for them? Need to decide based on their market
OPPORTUNITY in COMPANIES connecting corporate accounts to do the same
Strategy of most is to let end users connect retail / individual bank accounts to do operations such as balance inquiries
Nothing here yet. Maybe data isn't ready yet.
Key Differentiators / What to look out for
Integrations / partnerships - # and variety
Relationships with regulators and key large FI players
Overall speed to market / team's ability to execute
Ability to dominate Indonesia / Philippines / Vietnam
Innovation beyond just reverse engineering
Ability in understanding and managing fraud / KYC / compliance
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