Being “underbanked” does not mean that one lacks access to financial services. Rather, it often means that they do not have traditional bank accounts or credit cards. But in markets such as Indonesia, many still use digital wallets or e-commerce platforms, creating alternative sources of user data that can help them secure working capital and other financial instruments. Finantier, A Singapore-based open finance startup, wants to streamline that data with a single API that gives financial services access to user data, with their consent. It also includes machine-learning-based analytics to enable credit scoring and KYC verification.
Currently in beta mode with over 20 customers, Finantier Is busy getting ready to launch officially. It announced today that it had been accepted into the Winter 2021 startup batch of Y Combinator. The startup also recently raised an undisclosed amount of ex-seed funding led by former Ventures, with participation from AC Ventures, Genesia Ventures, Two Culture Capital and other investors.
Finnantier was founded earlier this year by Diego Rosas, Keng Lo and Edwin Kusuma, all of whom have product manufacturing experience Fintech Companies, with the mission of enabling open finance in emerging markets.
Open finance broke out of open banking, the same structure built on plaid and tink. Instead of giving people more control over their financial data and keeping it silent within banks and other institutions, users provide secure access to apps or websites to their online accounts information, including bank accounts, credit cards and digital wallets Can decide to do. Open banking mainly refers to payment accounts, while open finance includes a large gamut of services including financial specialty, business lending, mortgage and insurance underwriting.
While Finentier is focusing on Singapore and Indonesia, it plans to expand to other countries and become a global fintech company like Plaid. It is already eyeing Vietnam and the Philippines and has established partnerships in Brussels.
Prior to launching Finentier, Rojas worked on products for the peer-to-peer lending platform Lending Club and Dinong, and as chief technology officer for several fintech startups in Southeast Asia. He realized that many companies struggled to integrate with other platforms and obtain data from banks or purchase data from various providers.
“People are discussing open banking, embedded finance and so on”, said Rojas, Finantier’s chief executive officer, TechCrunch. “But they are the building blocks of something big, which is open finance. Especially in a region like Southeast Asia, where about 40% to region% of adults are unbanked or underbanked, we believe in helping consumers and businesses take advantage of the data they have across multiple platforms. It certainly does not need to be a bank account, it can be in a digital wallet, e-commerce platform or other service providers. “
For consumers this means that even if no one has a credit card, they can establish credit: for example, by sharing data from complete transactions on e-commerce platforms. Gig Economy workers can access more financial services and deals by giving data about their daily rides or other types of work that they do through various apps.
Building Southeast Asia’s Financial Infrastructure
Other open banking startups focused on Southeast Asia include Branca and Brick. Rojas said Financial Open makes a difference in designing infrastructure for financial institutions to specialize in finance and to create more services for end users.
The advantage of open finance for financial institutions is that they can create products for more consumers and find more opportunities for revenue sharing models. In South East Asia, this means more outreach to people who are underbanked or otherwise lack access to financial services.
While participating in Y Combinator’s accelerator program, Finantier will also participate in the regulatory sandbox of the Indonesia Financial Services Authority. Once this program is completed, it will be able to partner with more fintech companies in Indonesia, including larger institutions.
Wilson Cuca, co-founder and managing partner of East Ventures, said that Indonesia has 139 million adults who are underbanked or unbanked.
The investment firm, which focuses on Indonesia, conducted an annual survey called the East Ventures Digital Competitiveness Index and found that financial exclusions where one of the largest divisions existed. There are significant gaps between the number of financial services available in heavily populated islands such as Java, where Jakarta is located, and other islands in the archipelago.
To promote financial inclusion and reduce the economic impact of the COVID-19 epidemic, The government has set a goal 10 million micro, small and medium-sized enterprises (MSME) to go digital by the end of the year. There are currently around eight million Indonesian MSMEs selling online, representing only 13% of MSMEs in the country.
“Providing equal access to financial services would create a multiplier effect for Indonesia’s economy,” Cuca told TechNecrunch about Eastern Ventures’ decision to return Finentier. “Currently, hundreds of companies work to make financial services accessible to more people with their own unique solutions. We believe the financier will help them to offer more products and services to this under-section of the population. “