UOB sets up innovation lab, explores crowdfunding

Singapore

UNITED Overseas Bank (UOB), which is setting up an innovation lab jointly with the Infocomm Development Authority of Singapore (IDA), is exploring ideas to develop crowdfunding platforms.

Janet Young, head of group channels and digitalisation at UOB, said that having a crowdfunding service to have "smart money help smart ideas" would cater particularly to small companies that need funding to survive beyond their first two to three years.

"A logical and a more holistic way of helping them is ultimately to put them onto crowdfunding. This is going to be the trend."

"They would be able to get capital... without trying to arbitrage the system", or risk depositors' money, Ms Young said. "We will do our best to steer and create the environment and the platform."

Her comments come on the back of UOB's latest venture with IDA's investment arm Infocomm Investments Pte Ltd. The innovation lab is open to both start-ups from the region and UOB employees. The FinLab will have a paid-up capital of up to S$3 million. It joins other banks that have set up innovation labs and conducted hackathons to develop products to tackle issues linked to payments and risk management, among others.

Under this programme, some 30 fintechs will be offered up to S$30,000 of funding, a working space, software access, and mentorship from UOB bankers. Through each three-month cycle of building and pitching of products, 10-15 UOB staff are expected to take part.

"With the way the social economy is becoming, everything is about sharing. It's about information becoming much more perfect," said Ms Young, who joined UOB a year ago from Bank of America Merrill Lynch.

And that transparency creates tension around that holy trinity of "convenience, risk, and price", said Ms Young, who is also a board member of several government statutory bodies that include IDA.

As to why fintechs are more eager to collaborate now, Ms Young noted start-ups are not only keen to leverage on banks' balance sheets, but are also reaching a point where they need specialised banking knowledge.

"I see this as an opportunity," said Ms Young, noting that many fintechs are also banking with UOB and have already had informal discussions with the bank about collaborations.

The programme is expected to start in Q2 2016.