Christian König is a veteran investment banker who now works as a financial technology consultant and mentor in Vietnam, Europe and Southeast Asia. He’s also the founder of Finanzpro, which operates several news sites devoted to the topic. He spoke with eMarketer about the opportunities and risks in the fintech sector in Southeast Asia, as well as lessons mobile payment providers and other fintech startups could learn from their peers in Europe.
eMarketer: What lessons can financial technology startups in Asia learn from mistakes made by those in Europe?
Christian König: In Switzerland and Germany, there were too many fintech startups that tried to go into the mobile payment space and were then wiped out when the banks entered the market.
Lesson No. 1: In the end, you’re going to compete with the big guys. If you’re lucky, it will be banks. If you’re unlucky, it will be big tech companies or telecoms like Alibaba, Facebook and Amazon. All mobile payment startups have a marketing problem, but a big telecom can send out an SMS to all of its customers to tell them about a new service.
Lesson No. 2: Go B2B [business-to-business] instead of B2C [business-to-consumer]. A lot of startups in Southeast Asia try B2C because the market is big in Indonesia, [where the population] is 300 million people, and in Vietnam it’s 90 million people. B2C will have growth, but you don’t know when, and there’ll be a lot of competition. B2B is where the money is now. There aren’t a lot of fintech companies in Southeast Asia targeting B2B.
“You’re going to compete with the big guys. … If you’re unlucky, it will be big tech companies or telecoms like Alibaba, Facebook and Amazon.”
eMarketer: Is fintech venture capital overly focused on China and missing opportunities in the rest of Southeast Asia?
König: Venture capitalists cannot find startups to invest in in Southeast Asia—there are not enough qualified people. If you run a fintech company, you need to have ideas about banking, insurance—whatever your service is—but you also need to think about compliance and legal issues.
Young startup founders generally don’t have know-how. There are no fintech startups in specific fields. Incubators like Startupbootcamp FinTech Singapore can hardly find a Singaporean company for their program. Most of them are from South Korea, Thailand, etc. If you’re a good startup, you probably won’t give away 5% to 8% equity.
What happens is that companies like Momo, a mobile payment wallet in Vietnam, get $28 million from Goldman Sachs, which is huge. This is part of this bubble where we are now. China’s a very interesting market, but it’s overheated in certain spaces like B2B lending.
eMarketer: Where is the greatest fintech opportunity? Where is the market most underserved?
König: Insurance tech is completely underserved in Southeast Asia, as is wealth management tech. There are a lot of solutions in Singapore and Hong Kong, but not in the rest of Southeast Asia.
“There’s also an opportunity to combine the know-how from Europeans or those in the US with the people in Southeast Asia who understand the culture.”
There’s also an opportunity to combine the know-how from Europeans or those in the US with the people in Southeast Asia who understand the culture. Many people underestimate how different the culture is in each Southeast Asian market. In Vietnam, for example, everybody wants to pay cash because they don’t trust the bank or online banking.
eMarketer: If you’re targeting Southeast Asia, is Singapore still the place to go to set up fintech services?
König: If I’m a venture capitalist, I want to set up in a safe place like Singapore or Hong Kong. I see a lot of peop