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Building a castle on the cloud
SOUTH-EAST Asia is abuzz with the fintech trend at startups and banks alike, said Tim Synan, Google Cloud's region head.
He noted that Singapore sees plenty of such innovation - helped by the Monetary Authority of Singapore (MAS), which he called "a progressive regulator that encourages the application of this type of technology" - but added that the Republic's neighbours are keen on fintech adoption as well.
Referring to Prime Minister Lee Hsien Loong's National Day Rally speech last year, which called for a streamlined national electronic payment system, Mr Synan said: "If that isn't an impetus for some of the traditional banking institutions to really focus on things like digital payments, as an example, I don't know what is."
His firm offers cloud services that include storage, data analytics, machine learning tools and application programming interfaces (APIs), as well as G Suite enterprise apps, such as e-mail, instant messaging and real-time document sharing and editing.
"My team is interacting with banks of all sizes in every market in South-east Asia," Mr Synan told The Business Times.
"The banks are often struggling to really move at a faster pace, to transform certain aspects of their business.
"But, as the regulatory framework across the region improves - and, certainly, as they look at what's happening in Singapore, as an example, and start to adopt some of those progressive measures - then you'll start to see some of the banks digitise themselves much in the way that some of the Singaporean banks are doing."
All of South-east Asia is seeing "a lot of activity in fintech" across a host of applications, Mr Synan told BT.
He cited the challenge of bringing financial services to unbanked or uninsured people "in very remote parts of South-east Asia, living under poverty levels".
"Given that this part of the world is really mobile-first, we work with fintech organisations that have capitalised on that and made it easy to transact and just do the basics, for them to live day to day," he said.
Some new uses for cloud in the financial space are mobile payment and digital wallet services, as well as sector-specific analytics, he added. "We even have cryptocurrency platforms that are leveraging our platform throughout the region."
While these fintech clients could be dubbed "digital natives", Google Cloud also works with global and regional banks in areas such as anti-money laundering and electronic know-your-customer, Mr Synan said.
Institutions can tap other services available through the cloud, he added: "In some markets here, the retail transaction fees have been eliminated, so banks need to understand more about their customers, rather than getting transaction revenue from their customers. We're working with a few banks to help them do that and then allowing them to predict what the next best action might be."
Mr Synan pointed to DBS Bank as a leader in digital banking, "not just in Singapore, but globally".
"And that wouldn't happen had it not been for the support that MAS has given to encourage that kind of innovation.
"We're always in an active dialogue with various regulators to ensure that we understand their policies and that we also educate them on understanding our technology, and it is certainly a healthy dialogue that we have."
He believes that South-east Asia will likely see multiple traditional financial institutions developing "fully fledged digital banks" of their own.
"DBS launched a very successful one, and there are other banks that are trying to do the same as well, whether that's to acquire more consumers or to leverage your digital banking solution as a platform or as an ecosystem."
Citing South-east Asian ride-hailing firms Grab and Go-Jek, which have expanded into offering mobile payments and other financial services, Mr Synan said that the main difference between how financial startups and traditional institutions approach technology is not the willingness to change, but the agility in doing so.
He also pointed to Bangkok-based Omise, a regional online payments gateway founded in 2013, which runs certain software packages using Google Cloud's infrastructure.
"These are startup organisations that aren't encumbered with these histories of technical depth and, shall we say, legacy ways of working," he said.
Besides Omise - which also has offices in Japan, Indonesia and Singapore - another regional client is stock analysis and portfolio management firm Jitta, also from Thailand.
"You're starting to see these really rich ecosystems build, where the end-user doesn't even really know that they're banking," Mr Synan said of the fintech landscape in South-east Asia.
"They could be ordering their ride-hailing service, they could be ordering food, they could be booking airline tickets. You have other organisations, non-consumer organisations, that are using these platforms just such that they're innovating on top of these platforms as well."