Interview: Startupbootcamp FinTech: FinTech Growth in Cambodia

In collaboration with RHB banking group, Startupbootcamp Fintech (SBC) held two events focusing on financial technology (FinTech) to entrepreneurs and finance professionals as part of their 16-stop tour around the Asia Pacific region to offer expert advice, and exposure to early stage startups in the FinTech industry.

An afternoon program, named Office Hours, was held at RHB Indochina Bank Limited head office to meet individuals or teams seeking mentorship for their FinTech startup venture. Mr Thoo Kim Seng, Deputy Country Head of RHB Indochina Bank Limited was one of the mentors who provided strategic advice on the startups’ business model, product and pitch.

An evening FinTech social event was also held at Development Innovations Phnom Penh to gather the startup community and FinTech enthusiasts to discuss about how startups can transform the financial services sector in Cambodia. A panel was also present to discuss about topics such as financial service access and potential for innovation in Cambodia.

Both Office Hours and FinTech social events are bite sized glimpses of the SBC program’s value. SBC not only aims to fuel FinTech ideas and development in Cambodia, they also will select 10 promising startups to take part in their three month intensive 2016 FinTech Accelerator in Singapore starting in April 2016. RHB is also doing their part to support several ecosystem building efforts in the FinTech community, including a FinTech Hackathon lined up for April 2016 in Kuala Lumpur, Malaysia.

As one of the leading global financial innovation accelerators, SBC is dedicated to helping startups scale globally through direct access to an international network of mentors, partners and investors. Successful applicants to the program will have the chance of receiving extensive mentorship from 200+ entrepreneurs, investors and partners, access to top markets in Europe, US and Asia Pacific. They will also have 4 months worth of free office space, SGD 24,500 in cash per team, exposure to 200+ Angel and VC investors, and lastly, an invitation to join SBC’s global alumni network and growth program.  The program is open to all early stages startups that are focused on FinTech.

Geeks in Cambodia has also conducted an interview with Steven Tong, Managing Director of the SBC program as well as Christopher Loh, Group Chief Strategy Officer of RHB Banking Group to gather more in-depth insights into the growing FinTech industry.

This interview has been edited for clarity and length.


What exactly does FinTech Consist of?

STEVEN: There’re many different variations of FinTech definitions. The one I really like comes from Wharton Business School:

FinTech is an economic industry composed of companies that use technology to make financial systems more efficient.

FinTech companies cover a wide range of sub-sectors. Our 2015 cohort of companies range from money remittance (Toast) and financial inclusion (Kyepot) to wealth management (DragonWealth). Our companies also operate in payments(Kashmi), credit scoring (Creditseva), education lending(Skolafund), blockchain (Otonomos, OnePay, OpenTradeDocs), cyber security (Bankguard) and even social stock trading (Shereit).

Despite operating in such a diverse set of domains, FinTech companies all share a common attribute: they build and implement technology that is used to make financial markets and systems more efficient.

Why is it important to encourage more startups in this vertical?

STEVEN: A November 2015 report from Accenture stated that investments in FinTech across Asia-Pacific increased from US$880 million in 2014 to US$3.5 billion in just the first nine months of 2015! That’s a lot of money invested in this space and presents a lot of opportunities to entrepreneurs.

Secondly I strongly believe FinTech can make a positive impact in people’s lives. Using M-Pesa as an example, lots of previously unbanked Kenyan citizens now get access to banking services that were previously unavailable to them. The same kind of impact can be created in the CMLV countries through FinTech solutions that addresses people’s needs in this region.

What were the largest trends for Fintech startups in the past year in regards to the ASEAN region?

STEVEN: To be frank, most FinTech startups in ASEAN countries are followers. They largely mirror ideas developed in the US, Europe 1 to 2 years ago.

This isn’t necessarily a bad thing, as the solutions may be targeting the unique market conditions that exist in ASEAN countries.

An example is peer-to-peer lending. I’m seeing the emergence of peer-to-peer lending startups targeting SMEs in this region. It’s still in the early days and we’re definitely not at the scale of the P2P lending market in China. However, this is clearly an offering that SME needs but is lacking at the moment.

CHRISTOPHER: FinTech startups in this region tend to be geared towards solutions for SME financing, mobile payments, transfer and payments, personal finance management and also wealth management.

What made the accelerator come to Cambodia?

STEVEN: RHB Banking Group is a partner of Startupbootcamp FinTech. When we were planning our recruitment activities for 2016, they suggested we come down to Cambodia to check out the emerging startup ecosystem and engage the local startup community on the opportunities FinTech offers.

If we manage to recruit a Cambodian FinTech startup that can be a potential fit for the 2016 accelerator programme, this will be really exciting. If we don’t, we would at least create a spark of interest in this topic. Hopefully the Cambodian startup community can then start interest groups to continue discussions in this area. This is all part of community and ecosystem building that our partners and our team aim to achieve.

Will the growth of FinTech be slated for big success in Cambodia? Why?

STEVEN: I think it’s too early to talk about big successes in FinTech here. However, Cambodia is off to a good start. Wing and a number of mobile money systems seem to be taking off and doing well here. This could pave the way for other innovative FinTech services that can be offered by other startups.

CHRISTOPHER: With the FinTech scene being in its nascent stage in Cambodia and in the Indochina region generally, it presents FinTech startups with great opportunities to play a prominent role here especially in the space of SME financing, financial inclusion and payments. We look forward to contributing to its development and are committed to help shape and kick start the FinTech landscape.

How does the future of FinTech seem in Cambodia?

STEVEN: The future for FinTech is bright and tougher because of competition. Existing FinTech players are well funded. Banks are increasingly looking at developing their own FinTech solutions eg. the R3 consortium looking at the development of blockchain solutions. New FinTech startups really need to focus on nailing their value proposition and unique selling point that makes them stand out from the other existing solutions in the market.

I visited Shanghai recently and it’s amazing to see and hear the FinTech developments there. The likes of the BAT (Baidu, Alibaba & Tencent) companies, startups and banks have transformed the smartphone into a financial transactions platform that exceeds anything globally.  China may very well lead the way for FinTech innovation next year instead of US.

ASEAN is a fragmented market that need FinTech solutions to address the needs of the unbanked, the underbanked and the usual banking crowd! What is common in ASEAN is the fairly high level of mobile and smartphone penetration. This means mobile digital banking solutions can reach out to a relative large number of customers. Entrepreneurs can consider designing mobile-first solutions that provide an user experience optimised for the mobile platform.

CHRISTOPHER: RHB views this positively as Cambodia has witnessed a growth spurt in the technological and digital scene. With this, Cambodians have become more tech-savvy, using technology in more aspects of their lives including banking relationships. As their banking relationships develop to meet their growing needs, RHB wants to help make their interactions with financial institutions more convenient and seamless, through innovative digital solutions. This is where FinTech startups come in to complete the ecosystem to fill the gap by providing these solutions; this being a win-win situation for all parties: Cambodians, banks, regulators, FinTech startups community amongst others.

We understand that going digital and embracing innovation has its challenges but the pace has picked up and we are optimistic at the outlook over the next few years.

How can banks in general, such as RHB, aid in developing the growth of FinTech startups in Cambodia/the region?

We are willing to invest in FinTechs whose solutions are aligned to our business and strategy. At the same time, we hope to provide valuable advice and guidance to these startups in developing their ideas with real insight into the needs and requirements of the banking industry.