Why Support Startups? Insights & FinTech Trends from Bangkok Bank’s Head of InnoHub

These days, the word “Corporate Accelerator” might not sound brand new or make your jaw drop as there are tons of programs established on a global scale. But have you ever wondered what makes startups join such programs with a particular company? Do they join to gain valuable knowledge? Integrate with a working network? Gain access to larger markets? Gain funding? Or perhaps their goal is to gain the opportunity to work with a corporation as a strategic partner?

Bangkok Bank is one of Thailand’s longest-established banking groups with its own accelerator program. How can this help FinTech startups? For an answer to this question, who could be better than Bangkok Bank InnoHub, Thailand’s first global FinTech startup accelerator program. Last year, Bangkok Bank InnoHub Season 1 received many applications from startups around the world and now, Season 2 is live and ready for applications.

Dr. Pao Sriprasertsuk, VP Office of The President and Head of Bangkok Bank InnoHub, shares his insights about future trends in the world of FinTech in 2019, both from a business and tech point-of-view.

We know that Bangkok Bank is one of the top-tier banks in the country and you’re working with FinTech Accelerator startups; why’s that?

Dr. Pao: People constantly ask this question. Many startups work with big corporations and now we’re in the Disruptive Technology phase that requires rapid transformation. Although we place great emphasis on organizational developments, we are a very large institution, thus it’s quite difficult for us to swiftly respond to changes involving new technologies and customer behaviors. Change is constant and we don’t have enough time to address every single point. However, we must keep up with these ever-changing trends or we won’t be able to deliver the best experience to our users. Startups provide an interesting solution to this dilemma as they have the following attributes:

1. Specialization – Due to limited resources, it would be extremely challenging for startups to compete with big companies with a large pool of resources so startups must narrow their focus. In short, startups require a few skills they can excel at rather than undertaking all tasks. This is one of the reasons that many big corporations choose to co-work with several startups in developing auxiliary products according to the Open Banking model.
2. Speed – Startups are efficient, fast, and flexible due to their small size and no hierarchical structure compared to corporations. They are motivated to maximize their potential and they are ready to work, develop, and introduce new products and services into the market.
3. Customization – Startups are not limited by the constraints of a standardized product compared to corporations; they can better understand a client’s wants and needs, beginning with the conception of a project and they are able to develop products and services according to their clients’ needs. At the same time, a large corporation that works with startups can share their opinions about the product(s) freely and test it until the product is ready to launch.

Although the strengths of startups are defined by their skills and knowledge, unfortunately their client base and networks are not large. As small entities, they need to expand their business and Bangkok Bank is more than capable of providing assistance and necessary resources. We can help maximize their client base and give them access to our global network and successfully expand their market.

Presently, we see many FinTech Accelerator programs held in this region; why choose Bangkok Bank InnoHub?

Dr. Pao: Although there are many programs in Thailand, Asia, and on a global scale to choose from, we have to look from the startups’ point of view; many of them may want the opportunity to work with the bank rather than just learning from it.

We understand the importance of this, thus our main duty is to enable startups to develop a product or service that is usable upon launch and post-launch. Our program is different from others as we focus more on proof-of-concept (POC) which allows them to test usability, feasibility, and provide solutions for their products and services.

We support the use of FinTech innovations in developing new products and services that are tangible and effectively address the needs of our clients.

What are the themes Bangkok Bank InnoHub Season 2 will focus on?

Dr. Pao: We’ll address financial technology solutions to meet clients’ everyday needs. Furthermore, we’re looking beyond FinTech to create a “seamless experience” for each client. We’re on the search for startups to develop brand new innovations based on these 5 themes.

1. Creating Unique Customer Experience: for example, VR, AR applications, social commerce or loyalty programs.
2. Digitization and Automation: implementation of AI to perform automation processes with OCR and boost efficiency.
3. Future SME Solution: application of authentication data in developing a credit scoring system or the use of Distributed Ledger Technology (DLT). Others may use the term “Blockchain” (even though there is a distinction between DLT and Blockchain) in the Supply Chain and so forth.
4. Innovative Payments: Cross Border Payment Solutions and the use of Beacon and IoT technologies to develop new payment methods.
   Innovative ideas can sprout at any time, and sometimes they arise even without us realizing it. We shouldn’t limit the potential of startups when it comes to innovation and so we came up with a fifth theme to reflect this possibility.
5. Discovering Cutting Edge Technologies:
   This theme focuses on solutions that can help improve customer experience in line with the Thailand 4.0 policy. This aims to add value for existing products and services and strengthen the national economy. At Bangkok Bank, we intend to take part in the development of a strong and sustainable Financial Ecosystem for our country.

As someone who’s been in FinTech for a long time, can you please share your ideas with us about the upcoming FinTech trends in 2019?

Dr. Pao: When talking about FinTech trends, most people think about technology first, but I want to take this opportunity to share my view about this from a business perspective before delving into a technological perspective.

Part I: Business Perspective

1.1 FinTech Startups: As mentioned before, startups find expanding their business a challenge. Therefore, we might not see many FinTech startups with a B2C model, but rather B2B or B2B2C models. Startups need to work with larger corporations to grow their business and if both sides successfully cooperate, they can create products to saturate the market within a short period of time. The ecosystem plays an important role in helping FinTechs grow together with big tech providers which wish to improve their services. For example, big tech companies can use FinTech or hire a consultant who proposes FinTech to large companies.

1.2 However, FinTech talent is lacking in Thailand and SEA. This has become a big obstacle in many countries which is why we need to ramp up our efforts.

1.3 In many countries we are seeing rapid growth of venture capital investment in Deep Tech and this was reflected at the Techsauce Global Summit 2018, where Deep Tech gained more attention from many participants. In Thailand, there are very few Deep Tech startups as it is time-consuming and requires a lot of effort to develop the necessary skills. I think our country needs to invest in both human resources and technologies to increase our Deep Tech competence against other countries.

1.4 The most highly competitive fields in FinTech are payment segments which generate the largest data volumes in all FinTech areas. Small and medium-sized startups are not the only ones interested in payment segments; it is also attracting industrial conglomerates such as Grab’s GrabPay, Lazada’s Alipay, Garena’s Airpay, LINE’s LINE Pay, Gojek’s GoPay, and more. Therefore, data generated by all payment transactions are used to further develop other businesses such as lending (loans). This serves as a significant challenge for big companies, including ourselves, and we need to adapt. The fight for payment segments will continue and will intensify.

1.5 For startups, competing with giant techs is a significant challenge and sometimes it seems like an impossible task to accomplish. Therefore, we will see more and more startups working together to survive the fierce competition against giant tech companies, equipped with superior technology, a larger client base, and sophisticated functions and features.

Part 2: Technology Perspective

2.1 While Blockchain or DLT (collectively referred to as “Blockchain” in this article) gains more attention, the implementation of Blockchain in big corporations in many countries remains at the pilot stage and it’s not yet ready for large-scale use because this technology is yet to be perfected. However, given there are many successful test cases, it will not be long before it’s usable in a large-scale environment.

2.2 Artificial Intelligence (AI): We have heard about this for a very long time. This involves machines imitating human behaviors as the machine learns via an algorithm that identifies patterns of data in a similar way to the human brain. Machine learning has been around for a very long time, but it’s just starting to gain traction and attention in the past few years due to:

1.) Rapidly increasing computational power.  

2.) Increased data volumes (big data).

3.) Advances in AI in areas such as facial recognition, autonomous self-driving cars, and more.

Deep learning is one of the top areas in AI. The more data is added, the greater the network complexity, the stronger deep learning becomes. In a world of startups versus tech giants, the one with the most data will always gain the upper hand.

Before you head off, do you have any messages for the startups out there?

Dr. Pao: As I previously mentioned, our program is different from others as we focus on proof-of-concept (POC), establish partnerships, and develop new innovations together. Our mentors and experts will be our own personnel who will ensure efficient integration. The startups will learn from people with a vast pool of experience in the business and this will enable them to create innovations to enhance the bank’s products, plus ensure a seamless experience for our clients.

Last year, we were the first to launch a global FinTech startup accelerator program in Thailand and we learned from each other. This year, we’re back with Season 2 under the theme; “Inspiring Change – Unleash The Potential”.

For startups that wish to participate in our program, there are 3 things they should bear in mind.

1. Getting Ready – 12-weeks or 3-months goes by fast. You should plan and prepare yourself on how to spend time efficiently, especially if you have to run your business while participating in our program at the same time. Expect to work extra hard.
2. Working Together – When you work with a large corporation, getting used to its working structure and work culture will be challenging for startups. You might be concerned about the way decisions are made or find that the work processes take longer than anticipated. On the other hand, the corporation may have doubts whether the startups can eliminate all possible risks. To work together efficiently, it is vital to understand each other and adapt to the work environment accordingly.
3. Going for the Goal – Expect many difficulties and be patient. Successful startups have one crucial quality: they never give up, no matter how hard the challenges are and they manage to elevate themselves to the next level. Our team of mentors, including the accelerator team, will support you to the fullest. The rest is up to you and how you make the most out of this opportunity.

I hope to see you all at Bangkok Bank InnoHub Season 2!