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fintech opportunity in Southeast Asia

Source: fintechnews.sg

South Korea is being left out of a global wave of fintech alliances due to its inward-focused strategy and a lack of deregulatory reforms to respond to market changes. But the country aims to become Asia’s fintech center by building a “fintech bridge” with major nations, especially to seize the opportunity in Southeast Asia.

South Korea is trying to catch up with the global trend. On June 15, the Fintech Center of Korea, an affiliate of South Korea’s Financial Services Commission, hosted a Fintech Demoday in Singapore to promote Korean fintech firms’ entry into Southeast Asia.

However, Korea’s approach to seize the fintech opportunity in Southeast Asia does not seem to be in the right direction from two aspects:

  1. The strategy is focused too much on exporting Korean fintech abroad, rather than creating a financial innovation ecosystem through regulatory reforms and cooperation with other countries.
  2. Direct discussions are not being held among regulators. For meaningful alliances to create a more vibrant fintech ecosystem, it is important to clear regulatory hurdles through binding agreements between financial regulators.

Jeffrey Jones, an international lawyer specializing in finance comments,

It is very sad that we have one of the most tech-savvy populations on the globe, but the legal and regulatory system prevents this population from developing products and services that could create jobs for so many young people.

Such concern comes as global financial centers such as Singapore, Australia and the UK have joined hands to bolster the fintech industry and solidify their leadership position as global financial hubs. On June 16, the Monetary Authority of Singapore (MAS) and the Australian Securities and Investment Commission signed a contract to boost cooperation on financial innovation.

In May, Singapore and the UK also agreed to form a “fintech bridge” to foster financial innovation.

A version of this appeared in Korean Times on June 22. Read the full article here.

BRI Launches Satellite

Source: Sindonews

Bank Rakyat Indonesia (BRI), the country’s second-largest lender by assets, launched BRISat — a commercial telecommunication satellite — to connect 10,650 BRI branches across the archipelago digitally over the next few years.

The bank plans to transform itself into the biggest digital banking network in Indonesia by 2019. BRISat is the first satellite owned and operated by a bank. Traditionally, banks all over the world rent satellite services from telco companies to support their operations.

“We will develop a number of financial applications and make the most out of our new satellite to make BRI more efficient,” said Asmawi Syam, the President/Director of BRI — which specializes in providing loans for small and medium enterprises.

The $250 million satellite was launched by the world’s leading satellite launch company Arianespace from the Guiana Space Center — Europe’s Spaceport in Kourou, French Guiana. The satellite will be stationed at a geostationary orbit above Papua.

Connecting the economy across the islands

Asmawi said BRI is now more than ready to compete in digital banking against counterparts in the region, ahead of the semi-integrated financial market for ASEAN member countries — scheduled to be open by 2020.

Muliaman D. Hadad, Chairman of the Financial Services Authority, or OJK, said the satellite should benefit the whole of Indonesia’s banking sector.

BRI has around 50 million customers all over Indonesia and operates more than 9,800 conventional outlets, which include head offices, branch and sub-branch offices and SME loan outlets. It also offers more than 100,000 e-Channel outlets.

The scale of the lender’s operations means it needs network support from 23 satellite transponders. In the past, the bank’s satellite-based communication network has been relying on services from 9 satellite service providers in Indonesia.

BRI had been spending about Rp 500 billion per year to rent satellites. Buying the BRISat outright is equivalent to the cost of renting satellites for 7 years. The satellite maker promises BRI it can use BRISat for at least 17 years.

A version of this appeared in Jakarta Globe on June 20. Read the full article here.