Get All Access for $5/mo

Singapore Startup Fractal Inks Deal with Filipino Fintech to Serve the Country's Unbanked Population The tie-up would solve a big problem for 45 per cent adults in the Philippines, who say documentation requirements are a major barrier to opening bank accounts

By Aparajita Saxena

Opinions expressed by Entrepreneur contributors are their own.

You're reading Entrepreneur Asia Pacific, an international franchise of Entrepreneur Media.

Shutterstock

Philippines-based online investment company Seedbox has partnered with Fractal, an identification management company, to provide Filipinos access to investment products, such as mutual funds, even if they do not have bank accounts.

Seedbox says using Fractal's identification solution, which includes bank-grade compliant "know your customer (KYC), and "anti-money laundering (AML) capabilities, the company will be able to extend investment services to 40,000 Filipinos per month via its online platform

The tie-up would essentially solve a big problem for 45 per cent adults in the Philippines, who say documentation requirements are a major barrier to opening bank accounts, and 77 per cent Filipino adults who do not have bank accounts, Fractal said, citing data from World Bank's Global Findex Database, and a Financial Inclusion Survey by the country's central bank, both dated 2017.

"Digital technologies are driving opportunities for much greater financial inclusion. By providing technology solutions to non-bank financial institutions, our ambition is to expedite the transition to a more open and interoperable financial ecosystem," said Julian Leitloff, chief executive officer and founder of Fractal.

Leitloff conceived the idea for Fractal after the 2008 collapse of Lehman Brothers, and Deutsche Bank, when he realised that the lack of anti-money laundering services was one of the reasons that cause unhealthy financial practices.

"We want to help both users and companies achieve fast and accurate global verifications wherever they are and have a hassle-free experience when it comes to AML/KYC related requirements," he added.

Fractal also wants to solve the problem of high compliance costs across Asia, estimated at around $6.09 billion, as per LexisNexis 2019 estimates, and make AML compliance, which rose nearly 10 per cent over the last 24 months, cheaper.

Banking Issues in Asia Are Not New

Of the 400 million adults that live in Southeast Asia, only 104 million are fully "banked", and have full access to financial services, which leaves 198 million people that do not have even rudimentary access to financial institutions, a recent joint study by Google, Temasek and Bain & Co showed.

Very basic problems like infrastructure costs, absence of public registers and reliable credit information, along with stringent financial regulations, make it difficult for institutional banks and insurers to penetrate the region in a meaningful way.

Fintech companies – much like Seedbox – have tried to plug that gap, and using Asia's rapid tech innovation, boomed into a multi-billion dollar industry in the region, serving tech savvy millennials, and undocumented Asians alike.

Digital payments are expected to cross $1 trillion by 2025 in Asia, and account for nearly one in two dollars spent in the region. The market for e-wallets is expected to grow even faster, from $22 billion in 2019, to $114 billion, a more than fivefold jump, by 2025, the Google joint study said.

Aparajita Saxena

Former Deputy Associate Editor, Asia Pacific

Aparajita is Former Deputy Associate Editor for Entrepreneur Asia Pacific. She joined Entrepreneur after nearly five years with Reuters, where she chased the Asian and U.S. finance markets.

At Entrepreneur Asia Pacific, she wrote about trends in the Asia Pacific startup ecosystem. She also loves to look for problems startups face in their day-to-day and tries to present ways to deal with those issues via her stories, with inputs from other startups that may have once been in that boat.

Outside of work, she likes spending her time reading books (fiction/non-fiction/back of a shampoo bottle), chasing her two dogs around the house, exploring new wines, solo-travelling, laughing at memes, and losing online multiplayer battle royale games.

 

Side Hustle

At 16, She Started a Side Hustle While 'Stuck at Home.' Now It's on Track to Earn Over $3.1 Million This Year.

Evangelina Petrakis, 21, was in high school when she posted on social media for fun — then realized a business opportunity.

Health & Wellness

I'm a CEO, Founder and Father of 2 — Here Are 3 Practices That Help Me Maintain My Sanity.

This is a combination of active practices that I've put together over a decade of my intense entrepreneurial journey.

Business News

Are Apple Smart Glasses in the Works? Apple Is Eyeing Meta's Ran-Ban Success Story, According to a New Report.

Meta has sold more than 700,000 pairs of smart glasses, with demand even ahead of supply at one point.

Business News

Remote Work Enthusiast Kevin O'Leary Does TV Appearance Wearing Suit Jacket, Tie and Pajama Bottoms

"Shark Tank" star Kevin O'Leary looks all business—until you see the wide view.

Starting a Business

How to Find the Right Programmers: A Brief Guideline for Startup Founders

For startup founders under a plethora of challenges like timing, investors and changing market demand, it is extremely hard to hire programmers who can deliver.

Marketing

How to Leverage AI for Content Creation While Avoiding Potential Risks and Penalties

This article explores the dual promise and risks associated with AI-powered content creation, emphasizing the need for a balanced approach to maintain SEO effectiveness while avoiding potential penalties.