The online banking opportunity

It’s 2015, everyone I know makes use of online banking. In fact in Malaysia you’re getting online banking mobile apps that also take advantage Apple’s fingerprint sensor to give you a quick balance. Yet, you can’t take a photo of a cheque and get yourself credited, like you can do in the USA.

But that’s not the online banking I’m referring to. Online banking as a service or conduit for your physical bank is pretty boring. I’m thinking of the online savings accounts like ING Direct does provide you in Australia — high interest rates due to not having physical bank branches to maintain. Withdrawals or payments are made easy by having access to a cheque book. 

So the online banking I’m excited about is the idea of a direct bank.

No bank branches, minimal advertising (have you seen the HSBC ads on the rugby or the many airports one may visit?), mobile first, desktop second, and great telephone support in the local language of choice. ATM withdrawal fees at any network will be reimbursed if less than 5-8 transactions a month (Standard Chartered in Malaysia already manages this). ATMs in critical areas (malls? coffee shops?), with cash deposit as well as coin deposit (Singapore’s DBS has good examples of this). Cheque deposits via snapping a photo on your mobile phone. 

What about loans? Let’s do it over the telephone. Since we’ve got the online first mentality, wouldn’t it be cool to provide an interest rate discount if you provided us access to your social media streams? After all the more data we can get about you, the better it is we can provide you with a loan! This can also work for unsecured lines of credit (credit cards, personal loans, etc.) — your creditworthiness can be deemed on how much you’ve demonstrated you can pay (ala Amex), but at the same time once we have more information about you, we can be a lot more efficient (eg. you’ve posted a photo of you in Athens on Instagram; the bank doesn’t have to call you about a potential fraudulent transaction since it knows you’re there). Identity (and encryption) is important, so tying in a service like Keybase.io might make sense to ensure that now I can email my bank about my travel plans. After all banks are already used to using “Secure Mail” to send their private banking customers notes via email…

Hong Kong and Singapore understand electronic payments at point of sale via Octopus cards as well as the NETS system. Australia was way ahead of this trend with EFTPOS (with the ability to cash out at some locations like supermarkets even, thus eliminating the need for you to visit a bank ATM). Malaysia has this ability with MEPS but it has never really taken off. I once had dreams of paying my nasi lemak seller using plastic; that was the promise of SoftSpace (Malaysia’s answer to Square). Execution of buying a unit from CIMB (they white label for them) is nowhere near as easy as Square, which explains why uptake has been extremely slow.

But the time is now. There are more mobile phones in use than there are Malaysians. Many have access to the Internet, either via mobile data or WiFi. Pretty much every establishment today has access to an Internet connection. There is no longer an excuse to not have electronic payments. Its also a lot more efficient for the tax man (from a retailer’s standpoint).

One thing that I’ve not focused on much is regulation; however regulation is something that will eventually change with time (or if you do something first…). South Korea is moving towards this as the FT reports — South Korea moves towards first online-only bank. They plan to only issue one or two licenses, and it seems that DaumKakao is looking towards getting their hands on a license, and offer banking via their popular messaging app, KakaoTalk. “Seoul is introducing web-only banks as part of efforts to deregulate and advance the under-developed financial sector, as it seeks new economic growth drivers.” – something Malaysia can learn a lot from. It’s interesting that China already has some of this in the form of Mybank (backed by Alibaba) and WeBank (backed by Tencent).

There’s also reading material that I found rather interesting, a 2014 McKinsey report — Digital Banking in Asia. The US has something cool via Simple (can draw some great inspiration from their execution).

If you’re interested in solving a hard problem, with a great focus on customer satisfaction, with the ability to be really disruptive, please feel free to drop me an email — byte@bytebot.net.

LinuxCon North America in Seattle

I’m excited to be at LinuxCon North America in Seattle next week (August 17-19 2015). I’ve spoken at many LinuxCon events, and this one won’t be any different. Part of the appeal of the conference is being able to visit a new place every year.

MariaDB Corporation will have a booth, so you’ll always be able to see friendly Rod Allen camped there. In between talks and meetings, there will also be Max Mether and quite possibly all the other folk that live in Seattle (Kolbe Kegel, Patrick Crews, Gerry Narvaja).

For those in the database space, don’t forget to come attend some of our talks (represented by MariaDB Corporation and Oracle Corporation):

  1. MariaDB: The New MySQL is Five Years Old & Everywhere by Colin Charles
  2. MySQL High Availability in 2015 by Colin Charles
  3. Handling large MySQL and MariaDB farms with MaxScale by Max Mether
  4. The Proper Care and Feeding of a MySQL Database for a Linux Administrator by Dave Stokes
  5. MySQL Security in a Cloudy World by Dave Stokes

See you in Seattle soon!

On grooming

Via Bloomberg Businessweek (July 20-26 2015, page 63):

“I always say no one ever got fired for asking for more. And you manage your boss, not the other way around. (I am going to regret this.) — Mike Sheldon, CEO, Deutsch North America

Race to the bottom

The way I see money being invested lately makes me think of a proverb, “a fool and his money are soon parted”.

There has been a lot of talk recently about “the gig economy”. The FT has a series titled the New World of Work. The NYT has been covering this as its part of the US election campaign as well (see: Defining ‘Employee’ In The Gig Economy). The WSJ continues on with What’s the Gig Deal?. The Economist was ahead of this trend in 2011 — Labour markets: The gig economy.

Anyway, this isn’t a post about the gig economy per se. For one, I’m enjoying the fruits of such a labour market, say every-time I ride in an Uber. This is me wondering if there’s a lot of money floating via a venture capital fuelled binge, in where companies spend lots of cash to acquire users, while trying to outspend their competition to become the monopoly in the space. This is basically a race to the bottom, except it doesn’t happen via government de-regulation, but more venture capital, the attitude that its better to do first and ask for forgiveness later, and governments wondering what hit them.

Why such a thought? Quite simply, read the headlines. Passport Asia wants “seven figures” to be the ClassPass of Asia. They’re entering a market where KFit exists (and is well funded, by meme hustlers, even). The bottom line being that this is all just a copy of ClassPass. Hopefully it’s “localised”, with the best option being an exit to them, eh? That was the modus operandi for Groupon Malaysia.

What about Uber? They lost a lot of money and will continue to lose more. They’ve even decided that its OK and this isn’t news.

It’s the case of business 101: you raise money, you invest money, you grow (hopefully), you make a profit and that generates a return for investors.

So let’s look a little locally at MyTeksi/GrabTaxi. They championed taxi drivers when Uber came into the market in Kuala Lumpur. They promoted the service like crazy, causing TaxiMonger to basically not exist, and Rocket Internet to pull EasyTaxi out of the market. Once the competition was removed, it became much easier to launch GrabCar and GrabCar Premium, which basically competes with Uber on the same MyTeksi platform! The taxi drivers finally woke up to a protest. But there are now a lot less choices in Malaysia and that’s the crux of the problem – the taxi drivers are using a platform that they’ve become dependent on but don’t necessarily like to be beholden to. And its only now that people might remember that they performed anti-competitive acts, like preventing taxi drivers from having competing apps on their phones (if detected, MyTeksi wouldn’t start).

Today, the headlines are: VCs see a bubble in food delivery services. $1 billion raised last year, and $750 million this year. Imagine the valuations. How much has GrabTaxi raised? Uber?

Yes, its a race to the bottom. As consumers, we should enjoy all these subsidised services. But never allow them to become a monopoly. Don’t be reliant on one app. Spread the love. You’ll get your subsidised services for a much longer time.

Safety in Malaysia and the external perception

I am sitting at The Pier, a Cathay Pacific Lounge in the Hong Kong airport. While I still occasionally swing by The Wing, The Bridge, and The Cabin (in that order), this lounge has become my favourite, as you can get a 20-30 minute complimentary massage, which makes the transit a lot more bearable.

Today’s interesting conversation in the massage area (it is usually quiet, but occasionally you get a chatty passenger) happened to be with a gentleman on the same flight I would be on. He was born in Kerala, but grew up in New Delhi, and spent the last four years as an expat in Kuala Lumpur. His masseuse, like all ours at The Pier, are from Nepal.

She had been to Kuala Lumpur when she was about sixteen. And her friends and her were planning on going to Kuala Lumpur in September 2015, but they are rethinking it due to the fact that Kuala Lumpur is not safe.

Hong Kong she says is very safe. She takes a bus at 4am to reach the airport at 5.30am. She thinks that Singapore is safe. But KL lately, is not safe. The expat agrees. Whether true or perception, this is going to affect our tourist arrival numbers!

As a Malaysian, I wonder how many of us are waking up to this reality? What are we going to do to fix it?

Recapping rounds

I read with great interest (including the comments thread) about recapping seed rounds by both Brad Feld and Joanne Wilson. Reprehensible beahviour. Also in general angels don’t go in more than the first round.

Which brings me to a general worry/concern – companies where early employees become minority shareholders (not option holders, shareholders). Where they pay their first few salaries in exchange for shares. Or if after some M&A activity, folk become shareholders. One can easily own 1% or more of a company this way.

When the going gets tough, vultures do come along.


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