Co-founder of Lightnet Group Shares the Future Outlook of Fintech in SEA on CNBC Live
Q: Lightnet seems to have jumped on the partnership bandwagon recently signing one bank after another. Could you share with us briefly your latest developments and the motivation of
A: In late August we signed an MOU with SEBA Bank, a FINMA-licensed Swiss Bank to provide a seamless, secure and accessible bridge between digital and traditional assets.
SEBA Bank will serve as a banking counterparty for the Lightnet Group, enabling settlements, correspondences, and remittances in both fiat and digital currencies. SEBA will also act as an alternative settlement banking network, account and custodian as well as the settlement bank for money transfer operators (MTOs) in digital currencies.
This significantly enhanced the efficiency and interoperability of settlements between digital currency and the real world and provide a secure settlement solution for retail and institutional investors. We will have some announcements regarding live transactions with SEBA soon.
Last week, we announced a partnership with heritage Thai bank SCB. SCB will serve as one of Lightnet Group’s settlement partners responsible for disbursing and clearing payments, facilitating digital payment processing and enabling frictionless real-time remittances to Thailand from anywhere in the world with lower fees.
This partnership makes transfers accessible to all Thai bank accounts. SCB will serve as a center distributing money in real-time to beneficiary accounts in Thailand at more than 24 banks, as well as anyone who has signed up for PromptPay, a government-sponsored service that enables instant bank-to-bank fund transfers. This partnership is an important milestone on Lightnet’s quest to empower the unbanked.
We also just announced a collaboration with Velo Labs and Visa to jointly develop payment solutions, providing the under-served micro, small and medium enterprise lending market another pathway to build credit and improve financial wellbeing.
The partnership allows near real-time global transactions between participating banks, money transfer operators and other financial service providers, and aims to promote financial inclusion and access to financial services by leveraging digital assets.
Q: How do you think Covid19 has impacted the fintech sector in SEA?
A: Crises create opportunities. As Covid-19 crimps global financial markets and continues to wreak havoc in many sectors, it has accelerated digital adoption and prompted businesses and individuals to embrace digital technology in the forms of mobile payment, e-wallets, video conferencing and other digital communication tools. In a very real way, Covid-19 has proven to be a catalyst for fintech sector.
I am positive that Thailand / SEA / Singapore will weather this crisis. Our resilient and self-reliant entrepreneurs will ride the tailwind of surging digital consumption to create innovation solutions to improve peoples’ lives, and thrive. Rough waters make great sailors.
The bullish view on digital currency from the world’s two greatest economies China and the US give us hope of the silver lining ahead.
Q: How do you see the landscape of fintech regulation evolving in the region?
A: The fintech landscape in SEA is evolving faster than we anticipated, thanks largely to the catalyst of Covid-19.
The 660-million population provides a strong user base for digital payment ecosystems in Southeast Asia. 30% of the Southeast Asian population are Gen Z while 70% of Internet users are digital savvy millennials.
Exponential growth of the sector is facilitated in part by local governments’ favourable business ecosystems, which boast low corporate tax rates, political stability, and low barriers to entry.
With Southeast Asia’s maturing infrastructure, fintech is set to become the region’s biggest sector, valued at approximately US$100 billion in Thailand alone, with the unbanked sector likely to be valued at twice the amount.
Q: How does Lightnet comply with all the regulations in SEA and China which are drastically different and fragmented?
A: While Lightnet is innovating a sector where the last innovation was arguably SWIFT, the reality is, if your primary goal is to simply tear down existing structures and reinvent the wheel, you are going to struggle with adoption. Particularly as it pertains to remittance. As such, Lightnet is continuously in discussions with the existing players. This includes regulators.
Different regulatory jurisdictions move at difference paces as regulators do their best to ensure market stability while protecting their populations from risk. Expanding on this, it is important to remember that there are a number of different regulatory jurisdictions in Southeast Asia that are actively generating frameworks to enable the growth of digital assets. In fact, Southeast Asia boasts some of the most digital-asset-friendly jurisdictions in the world.
Lightnet’s approach is to take a global approach. While various regulatory jurisdictions continue to evaluate, develop, and issue frameworks that support the needs of their own markets, Lightnet is remaining abreast of these developments as they occur to ensure that we remain compliant in all markets where we operate.
About the Street Sign programme
Anchored by Christine Tan and Tanvir Gill at the Singapore Exchange (SGX), Street Signs follows the day’s biggest moves to provide CNBC’s audience with actionable, real-time insights. From the anchor desk to trading desks around the region, Street Signs helps viewers capitalize on the plays of the day. Street Signs is a television business program currently airs on CNBC Asia and CNBC Europe. This program focuses on the day’s market action. In addition, prominent analysts, investors and executives regularly appear on the program to offer their perspective.
Hosts: Tanvir Gill, Anchor
Based in Singapore, Tanvir Gill is the co-anchor of CNBC’s Street Signs Asia. The programme follows the day’s biggest moves to provide viewers with actionable, real-time insights. From the anchor desk to the trading desk, the show helps viewers to capitalize on the plays of the day.
Hosts: Christine Tan, Anchor
Christine Tan is the Singapore-based anchor for CNBC’s longest-running feature programme “Managing Asia” interviewing prominent CEOs and leaders of top companies doing business in Asia. The show celebrated its 20th anniversary in 2017, with more than 900 episodes produced.
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