Alt funding, wealth mgmnt ripe for FinTech: Liolios

Visual from the accelerator's website

Seeking to produce a new breed of high- growth startups in the financial technology space, Europe based accelerator Startupbootcamp FinTech launched the Asian edition of its programme in Singapore, in November 2014.

The accelerator provides funding, mentoring, office space and an access to a network of – industry partners, investors and venture capital firms – to Singapore-based FinTech startups.

One of the founders and the global managing director of Startupbootcamp FinTech, Nektarios Liolios spoke to DEALSTREETASIA about the challenges faced in implementing innovative financial practices and technology in the traditional banking setup, which was still using technologies and systems that are dated 50 years or more.

According to him the wealth management and the alternative financing sectors were ready for tech innovation while areas like payment systems, crowdfunding, P2P (peer-to-peer) and back office management for different financial services are likely to see some startup activity, in the region.

The FinTech startup ecosystem has just started growing in Shanghai and Hong Kong, he opined, adding that Singapore was already a much broader market, making it the right base for the accelerator. While sheer coincidence led Liolios the field of finance technology business, the mentorship that Startupbootcamp Fintech provides is quite focussed on creating startups that are comfortable with FinTech  ecosystems in both Europe and Asia.

Excerpts from the interaction:

How did Startupbootcamp FinTech originate?

Prior to Startupbootcamp FinTech, I worked with SWIFT, specifically the Innotribe unit, which focuses on innovation in the finance industry and inhabiting a world jointly inhabited by investors, entrepreneurs, bankers and financiers.

Innotribe Startup Challenge was about finding interesting startups in the FinTech space and to put them in front of an industry audience. Some of the names I came across then have become huge in this sector.

To begin with, the Startupbootcamp FinTech partnered with players in Europe, particularly those with a strong collaborative spirit, and decided to create an accelerator focusing on FinTech vertical. London was chosen as the base because that’s where all the action is.

What was your greatest challenge as an innovation leader at SWIFT?

Working in and with corporate entities, as well as making people understand what needs to happen. SWIFT and the banks, as a general rule, can be slow in this context. It’s often a struggle to get executive buy-in and facilitating the need for the rapid changes, when evaluating and implementing something innovative.

Which do you think matters more – innovation in technology or innovation in business models?

Cultural changes, in addition to innovation in technology and business models, which are all important. Again it depends if it is a services-driven model or technology-driven innovation. Technology can be both a driver and facilitator, so you cannot have one without the other. You always need an element of cultural change within the organisation in order to make an innovation work.

How did your role as an Innovation Leader serve to prepare you for your current post?

The key learning there was, dealing with the challenges of the startup ecosystem. Co-existing in both the corporate sector and startup ecosystem gave an understanding of how things work, as well as an insight into how the mind of an entrepreneur functions and how a startup venture operates. Knowing and understanding the problem that the banks face and how they find it difficult to adapt to innovation, allows me to act as a resource and guide the entrepreneurs in navigating the difficulties that come with implementing innovative financial practices and technology.

Why choose Singapore and not Hong Kong or Shanghai, given the greater access and economic wealth concentrated in Northeast Asia (i.e. economies of Japan, South Korea and China) for Startupbootcamp FinTech Asia?

Those are different conversations altogether. Singapore gave us everything we need to run an accelerator. You need three things – a broad spectrum of financial services (i.e. wealth management sector) with established retail, corporate and wealth banking segments; a startup ecosystem that entrepreneurs are attracted to; and educated angel investors.
This is not something you get in any other place.

The other markets are simply not as broad. The ecosystem has just started growing in Shanghai and Hong Kong. Its not an either-or question, rather it is more about the sector we are starting off in. Singapore is also an attractive market. In terms of priorities, it was an easy choice for us

Do you see specific functional areas ripe for beneficial disruption in FinTech or FinServ?

Pretty much any area within that space is ready for change. I’m always reluctant to use the word ‘disruption’. Payments, crowdfunding and P2P (peer-to-peer) are some of the areas that have not been touched by startup activity. The wealth management sector is definitely ready for it. Entrepreneurs may also want to look at the back-office operations.

Pretty much any aspect of financial business has the scope or potential. So really, it’s looking at the current trends. Alternative financing and the wealth management sector are already seeing changes. For alternative financing, it’s specifically anything to do with P2P/ SME lending, especially in emerging economies. Some interesting firms to look at are Dragon Wealth & Nutmeg. It’s all just touching the surface right now, and there’s more that can be done.

Bitcoin & Cryptocurrencies – whats you’re take on them?

Those are more complex conversation. I think financial professionals and entrepreneurs need to detach the currency from the underlying technology – the block chain is definitely here to stay. Some of the technology that the banks are using at the moment are 40-50 years old or older.

It would be different if only the banks were open enough to understand the essence of the technology, but the Mt Gox incident and the general media noise has scared them off. At some point they’ll be used by the industry and regulated, but it’ll take a while. The finance industry needs educating on what the new technology can be used for, how it benefits them, and how to deploy it. The banks need to see the necessity for it and recognise its value. In essence, the banks aren’t moving fast enough.

What do you perceive are the challenges ahead for the FinTech industry in the context of the global recession?

The challenges are not related to recession; it’s more about people. There is an element of inertia and complacency (in people). Where ever there is a need, people innovate, and the banks are failing to efficiently adapt. Some banks are more aware of what needs to happen and are active in their space, being more switched on and ready than others.

We partnered with DBS for Startupbootcamp FinTech in Singapore because they have an understanding of the need for engaging with startups, innovating and leveraging on external innovation.

Personally, if you were to leave your current position and start a new business, what area would it be in and why?

I’ve been asked this before and I’d have to say credit scoring. There’s insufficient alternative solutions to credit scoring happening at the moment, and it links to bigger discussion of people getting access to banking solutions.

The models currently being used are outdated and there is space for developments in that area. I think that is going to be one of the big things in the near future. More than two billion people do have access to a bank account. Serving this space, as well as getting them access to banking services needs to happen, and someone is going to have to do it.

You’ve spent a year as the MD of Startupbootcamp FinTech in London. Any particularly memorable moments and individuals that you’ve encountered during your tenure there?

There’s many of them! The exciting thing about doing this is finding startups and people within these ventures, and how they grow within three months, from the time they start to the party after demo-day. When you work in this space, you get to meet so many memorable partners, mentors and investors that are part of these teams. I don’t want to single anyone out, as I’ve met so many interesting and inspiring people. Everyone becomes part of your circle through the relationships you build in these places.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.