Fintech: Collaborate rather than compete, says VC: Page 2 of 2

While the fintech industry is potentially a growth sector in the coming years, industry observers caution startups wanting to get involved in fintech to navigate carefully in this field as there is a host of issues that they will have to deal with.

Top of on the list of potential minefields is legislation and regulation, according to Are Herrem (pic right), a specialist at Norwegian law firm Selmer.

Speaking at the same panel at OIW, Herrem said fintech companies are startups, and like any other startup, they are still navigating the challenges of being one.

Herrem said for example, any startup would need to ask the following questions:

These are but some questions facing any startup, much less any fintech startup, Herrem argued.

Besides this, the lawyer noted that fintech startups have added issues that they have to look into, the most important of which is to study the regulatory regime as the financial sector is heavily regulated, regardless of where you are in the world.

“Fintech startups have to make sure they have the necessary licences to operate and also be aware of new legislation and regulation (adverse) around the sector in which they operate.

“Then there is the issue of meeting compliance risks. The questions that must be answered include the integrity of the company staff and shareholders, regulatory compliance, money laundering legislation and policy on the right to use data, such as Personal Data Protection laws.”

Fintech in Southeast Asia
Elizabeth Lumley, the director global ecosystem development for Startupbootcamp FinTech & InsurTech, concurred that South-East Asia is potentially a growing area for fintech as there are a number of countries that are making headway in terms of government and private sector initiatives.

Speaking to Digital News Asia (DNA) on the sidelines of the OIW Getting Fintech Right forum, Lumley said Singapore, for example, has made efforts to make fintech a real priority.

Asked what areas of fintech South-East Asia would be good for, Lumley said there has been a lot of co-working space and accelerators popping up, and that payments is one area that has been on the radar for a few years now.

“We’ve seen payments an active space but I think fintech solution in retail banking, small- and medium enterprise-sized (SME) banking, after which corporate banking and asset management may follow.”

Lumley believes that any area where there is friction in the FSI is an opportunity for fintech startups. For example, most global banks have been ignoring the SME market for a very long time, and so, this is an area of friction. A good example of this is in the money transfer sector, she noted.

“Singapore is quite advanced fintech and you see a lot of investment money in the market and you do see a lot of startups – not necessarily quality ones but rather more in quantity,” she argued. So there need to be a lot more [quality] startups in the region to match the investments coming in.”

Asked what she thought about Malaysia, Lumley said she’s heard “a lot of noise” from the country, and revealed that Startup Bootcamp may consider doing something in Malaysia.

“We are actively talking to Malaysia, and although I’m not sure in what form but it’s being considered.”

Edwin Yapp reports from the Oslo Innovation Week, Norway at the invitation of the City of Oslo and Innovation Norway. All editorials are independent.

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