Navigating the Waves: Exploring Fintech Investment Trends in Asia

Speaker A: Think about how to innovate on the product side, look to solve the same problems and in any industry that you see, it's not a winner take all, uh, endgame. In any case, there is plenty of room for each of these fintechs to get to a certain level of scale and achieve their definition of success without necessarily cannibalizing the other entity.

Speaker B: Foreign.

Speaker C: Hello and welcome to this very special episode of the deciphered podcast by Bain and Company. On this podcast we unpack the stats to give you an in depth perspective on different topics relating to fintech and the financial services industry more broadly. Um, I'm your host, Jeff Theisser, a, uh, partner at, uh, Bain and Company. The title of this episode is Navigating the Waves Exploring Fintech Investment Trends in Asia. And I'll, uh, add a little bit of context. For many years, Asia has been seen as a real hotbed for innovation, not just in financial services, but across many sectors. And the region is frequently visited by companies from all around the world looking to learn from the Asian tech giants and other innovative businesses and have often been a real source of inspiration and, and admiration for the rest of the world. We've also seen the emergence of various large scale fintechs such as and Razorpay Grab, just to name a few, and more recently, the launch of various neobanks across the region looking to challenge the incumbent banks. But what's driving all of this? What trends are actually emerging? What makes Asia such an interesting and exciting fintech market that we should all pay attention to? On, um, today's podcast, we ask two fantastic guests at the heart of all of this to share their perspectives and how they believe the fintech investment landscape in Asia will evolve in the years to come. First of all, joining me is my good friend Kelvin Tan, CEO at audax. It's great to have you on the show, Kelvin. It's been a while. We've been planning to have you on the show for a while, so it's great that we finally managed to make this happen, especially here in, you know, here in Bangkok. Could you explain a little bit more about Audax and what you guys do?

Speaker B: Very happy to be here. Uh, Jeff, I know we've been trying to make something work for a couple of months now. Almost a year since the last time I met you at Amsterdam. Uh, Audax is very simply put, a technology platform that sells to FIs and banks. And what we've got is an end to end bank in the box that allows any bank to create scalable Digital business models on the back of what we've got and it gets to market really quickly with a significantly low cost of ownership. We will get you up and running a full digital bank and or a banking as a service capability within six to nine months. Very good.

Speaker C: We are also joined by Rishi Sephi, who's the head of fintech at Torch Partners. So we're going to get both the entrepreneurial perspective as well as the investor perspective. I'm very much looking forward to this, guys. All right, let's get on, um, with the show. At, uh, Bain, we sometimes use a concept called answer first, which is essentially having a relatively quick formed hypothesis using the collective facts, stats and brains from across the organization. We're going to adapt this a little bit for the show and ask you guys for your quick 60 second answer first to the following question. Why is Asia such an exciting fintech market?

Speaker B: Kelvin Asia is exciting because Asia is not largely homogeneous like most of the other places around the world. It's not one large market, I mean, barring China and India obviously. But even with China and India, we are talking about significantly diverse population, significantly diverse regulatory regime, significantly diverse challenges both in terms of operating not just fintech, but pretty much any digital business model across the region. If you take APAC as a larger region and Southeast Asia as a more complex microcosm, uh, of a much, much larger universe. So from my perspective, the challenge of actually solving for something that scales in Asia as a construct is something that is nigh impossible and therefore interesting. Just to add to that, I just read an article yesterday, ironically, uh, on this one, which is the fact that most players are in the right space to leapfrog when they don't actually have the incumbent bearing of this works. Well, why do we want to change it so in Asia? Because specifically in financial services, it's been a generation or two behind, maybe 10 years, 15 years ago, that gives Asia the capability to do that, leapfrog across over some of the developments that have happened in say, the Americas or Europe. And China is the best example of that. China started out copying some of the things that came from. I mean, Alibaba was a copy of Amazon to some extent you could argue, but it has in and of itself grown to be a completely different standard bearer for the integration of financial services into ecosystems, webank and so on and so forth.

Speaker C: If you take a step back and look at the financial services market in Asia more broadly, or even Asia in general, why is Asia such a hotbed for innovation?

Speaker B: Well, actually, I'm a big fan of Necessity is the mother of invention, right? I think Asia went through an entire phase. And when I say Asia, I'm very broadly generalizing, but clearly India and China for sure went through a massive phase in, uh, maybe a decade and a half, two decades ago of copying business models and technical platforms from the west, right? I mean, with Amazon rising, with the growth of Uber, came Grab, came Alibaba, came a whole bunch of other players in the E commerce. And those are just the two examples I can think of off the top of my head in India as well. And then what happened was they realized the limitations of those models as applied in the local context. It's great for the first, whatever, three years as it scales, but at some point you need to be able to figure out the ability to cater to a critical mass of that population. And once you hit that particular inflection point, what really happens is that Asia moved ahead on the innovation from both a business model, distribution, logistics and engagement standpoint that wasn't completely necessary in other parts of the world. And therefore necessity as the mother of invention created, uh, the capability to distribute vastly, to service vastly, to reach populations in the middle of nowhere. Because, you know, Indonesia has 250 islands where 250 million people stay. So for me that's exactly it. I think it wasn't the point whereby Asia started out and said, let us be inventive and create. It was let's copy everything that works, but it has a ceiling to where it can go. And then necessity for local capabilities, necessity for adhering to local regulations, and necessity for distributing to local populations became the driver of their invention.

Speaker C: I think that's a really good point. And I think that's also one of the reasons why fintech isn't just a very, very exciting market, but also it's a complicated market to operate in. Therefore, I think a lot of the ideas that we've seen emerge across the region in the past couple of years. Again, it's not that easy to replicate that in other parts of the world. For example, now, for someone who spent his whole career in financial services, I honestly think there's never been a more exciting time to work in this industry. But what are some of the fintech trends that you guys are particularly excited about?

Speaker A: Rishi, I think you touched on it, obviously Jenna is one. But for me it is the democratization of basic services, insurance, whether it is wealth creation. We talked about credit a little bit earlier. I think in all of these we barely scratched the surface. I was with a company Yesterday, they've got 2 billion of AUM. Um, it's minuscule compared to the opportunity universe that exists. So I very much feel what excites me is, as Hellman was saying, the region is ready for change, is ready for innovation, is ready for adoption. But we are very much at the tip of the iceberg on basic things where fintech is going to make a massive difference to the audience in the region. And that's what excites me and that's what gets me going, that there's a long innings to play here.

Speaker C: Rishi, we were having a chat before this around. To what extent do we feel that we're still in the first innings and again, we're only just getting started and we have a lot of Runway, a lot of room for growth versus if you look at some of the ideas and some of the businesses that are popping up now. And the guys at this Week in Fintech actually wrote a really interesting article about this. So to what extent are we effectively just recycling old ideas? We're building, uh, a slightly better version of what already exists versus building something that is fundamentally 10x better. We're rethinking the business model, the operating model as well. What would you say to that?

Speaker A: I'd stick to Jeff, what I said. I still think we're in the early innings and there's a cohort of Fintechs that had a first mover advantage that got off to a fast start, but they didn't get everything right either. They're trying to solve the right problems. Some of them have found the right execution path, some of them have stumbled on that path and potentially are going to slow down and, you know, may not get to where they were headed. I think that creates the opportunity for this new cohort of Fintechs to come and solve the same problems. You know, sit on the shoulders of the mistakes they've made. As Kelvin was saying, distribution's probably being fixed or being at least tackled. Think about how to innovate on the product side, look to solve the same problems. And in any industry that you see, it's not a winner take all, uh, endgame. In any case, there is plenty of room for each of these fintechs to get to a certain level of scale and achieve their definition of success without necessarily cannibalizing the other entity. So we should be thinking of getting new ideas. It should be still trying to solve the problems that need to be solved. Just how can you execute on it better?

Speaker B: Absolutely. Uh, I'm not going to repeat everything that Rishi said, Because, uh, the reality is this, right? There has been a lot of innovation in Asia from a business model standpoint outside of financial services, plenty. The ability for wallets to do all kinds of fun stuff, the ability for EcoSystem players like WeChat, like Alipay, has been amazing in financial services specifically. I would challenge you, Jeff, to name me one real product innovation in the last decade that is different fundamentally from a product construct that has existed for the last hundred years. My personal opinion is that that probably will be tough to point one out, but that doesn't mean that there's no potential for it.

Speaker C: Why is that dumb?

Speaker B: Uh, I will argue that the technical ability to make that real innovation happen didn't exist till less than a decade ago, right? Today, I mean, prior to April 2023, who was talking about Gen AI? Everyone who suddenly a Gen AI expert wasn't a Gen AI expert prior to April 2023.

Speaker C: Now we're, uh, all Gen AI experts.

Speaker B: Exactly. So my point is that I think the tools may not have been available, but they certainly are available now, which is a great lens to take to what could come in the future. Right? What stops banks with the capability and the massive resources at the back of their, uh, bid and calling to create the ability for data products, not just financial services, not just providing a loan or doing some kind of a discounting, but true data products around their access to information on the customer. J.P. morgan had a very interesting evolution on that front very recently where they announced that they are talking about data monetization with advertisers. I think that's one baby step. Actually. I would like to say that I was wrong. There has been innovation in product in the last few weeks, which I forgot about from JP Morgan, so kudos to that.

Speaker C: Very good. Hey, uh, I want to talk about the, um, investment landscape a bit. Now we all know, and something we've covered at length on this podcast as well, IS23 wasn't a great year for fintech investments. That's an understatement. But Asia in particular seems to have been hit pretty hard. According to Statista, uh, investments in fintech in Asia dropped from roughly 51 billion in 22 to just under 11 billion in 23. Asia, however, still accounts for roughly 20% of all fintech deal flow, according to CB Insights. And that figure has actually remained pretty stable in recent years. Furthermore, we actually saw the birth of four new fintech unicorns in Asia last year compared to only two in the us so Asia was winning on that front. And this was actually the, uh, first time since 2019 that Asia outpaced the U.S. uh, in the number of new fintech unicorns in a single quarter. What does the current fintech investment landscape look like in Asia, Rishi?

Speaker A: The fintech landscape, Jeff. Globally now, there's obviously the common theme that everybody has shifted the lens from growth at all costs to sensible growth or pursuing profitability in Asia is no different. The degree of excitement has probably correlated well to the degree in which the investment dollars have fallen in the region. So back to where we started, I think Asia, when, when everybody got really, really excited about it and fundamentally the trends are still the same, also caused the biggest hype. I think in 2021, India, in terms of fintech dollars invested globally, ranked number three after US and uk. And that was all because obviously the potential that the country had, that the region, uh, had absolutely. What has happened is I think the execution probably has not kept up with the hype and a number of trends that people thought would play out in Excel unfortunately did not come to bear and that has effectively caused a bigger drop, if I have to say, in terms of where the expectations were vis a vis where reality has hit, the investment climate is very much open to Asia. I don't think fundamentally people's impressions on what gets them excited about the region has changed. I think what people want to see is a lot more emphasis on execution and ability to crystallize plans rather than necessarily live and breathe Excel and PowerPoint and visions and stories. I think having a grandiose vision is great, but there's no substitute for good execution.

Speaker B: I completely second Rishi's point. As an, uh, entrepreneur, depending on how you define it, and talking to multiple investors at the same time, it's difficult, right? The conversation has been a lot more about execution, has been a lot more about sustainable profitability, how do you gain traction and so on and so forth. Uh, whereas a couple of years ago that would not have been the key part of the discussion. I think it's a good return to sensibility. You take a time lens to it, right? In the next three, two to three years, that's going to be the predominant view of the conversation. Depending on the cost of liquidity, uh, running around the system when that comes down. I mean, if nothing else, we've learned that people don't learn over courses of multiple cycles and that conversation will start up again. But fundamentally, nothing has changed in Asia. The market is still huge, the complexity is still huge. The ability and both the opportunity and the obstacles to realize the Reality of what's in the Excel spreadsheet is still huge. So from my perspective, it's just a, uh, change in the price of liquidity and the market appetite for that premium that used to be paid. If you ask me, the number of deals probably hasn't come down too much. The actual valuation tied to those deals and the amount of money put into those deals have come down significantly would probably account for more of that 51 to 11 million drop than the number of deals itself.

Speaker C: I couldn't agree more. And of course we have seen, even throughout 23, we've still seen a significant number of deals happening at the early stages. Uh, I was in New York recently and was at an investor dinner and one of the things that we talked about was that 23 was probably the best year for fintech. The reason why someone said that is the view was basically, well, if you, in five years from now, if we look back at what's been happening in the past 12 to 18 months. To your point, Kelvin, I think this return to focusing more on fundamentals and also I think if you look at some companies have been pretty vocal about wanting to IPO. We obviously didn't see that in 23. And the fact that a bunch of founders had to go back to the drawing board and think about, hey, how do we operate in this new world that we live in now and how do we build a business that is actually going to be around in the next 20, 30, 40 years. But again, I think that return to normality. Exactly. I think again, longer term, um, is probably a good thing for the sector as a whole.

Speaker A: Couldn't agree more with you, Jeff. I think the fintech ecosystem stronger and you know, made sure the businesses that are able to come through out of this cycle are built to last, ah, are really meant to do what they were set out to do rather than necessarily target fundraising, so to speak, as their next milestone.

Speaker C: We've seen a lot of exciting developments in the region in recent years, including the emergence of neobanks in Southeast Asia, the introduction of new payment rails, the uh, launch of open banking in places like Hong Kong, the launch of UPI in India. I could go on and on and on. How has the fintech ecosystem in Asia evolved in recent years and what do you consider to be some of the key drivers of growth?

Speaker B: I think that the fintech ecosystem in Asia, from my perspective, has evolved very much in line with what the Europeans are looking at. Right. By and large the evolution of open banking, it's a lot more piecemeal Obviously because you don't have a single government like the UK and where you basically establish uh, false implementation. But you see it, open banking for example has reached Indonesia with Snap. It's starting to talk about in Malaysia. Singapore has its own version of it. So you will see some of that quickly coming through. You see the distribution models that we talked about coming through in multiple countries. The number of profitable neobanks around the world, uh, tiny. And of those who are profitable, I think 11 was the number. I think eight of them or seven of them sat in Asia. And of those who sat in Asia, all of them are ah, ecosystem banks. Right. They're embedded into somebody else's ecosystem or their own large ecosystem, Cacao being an example. The only exception to those rules are nubank which is a monopoly largely in Brazil and I think Tinkov in Russia which is also a huge player. So at scale with uni economics at work. Monzo for example just turned profitable. Mhm. After was it 10 years or 12 years?

Speaker C: Zopa another one.

Speaker B: Zopa is another one. And by the way, call out for love for ts. I love ts, therefore Samhain. Absolutely. So the traditional Neo bank model does, is challenged. And whether or not investors today have that timeline appetite for that return to sustainable profitability is going to be a real conversation to be had in the next couple of years, even in Asia. So the new neobank licenses that are going out in multiple markets today are going to start looking at how they execute it. And I suspect the distribution models are going to be very different from when Hong Kong issued their licenses. Very true.

Speaker A: From my perspective, what has changed in the fintech ecosystem from maybe a few years back to now, I think it is the way the incumbents and the fintechs have started to cooperate better. When fintech was, we're still in the first innings, but rewind back five years. I don't think the incumbents were sure what to make of them. Should they entertain them? Are they a threat? Are they a friend? It was unclear. Are they even serious? Are they really going to do something or is it just a flashy thing in the corner that, you know, I'm not sure what to do with it. I think you're seeing a lot more positive interplay between the two worlds, uh, if I may say so, and the customer has come out better off as a result of it. To me that's been the most positive and rewarding change if I have to say.

Speaker B: Absolutely. Uh, I think on the flip of it, the fintechs are also starting to learn the Value of the incumbents, of the banks who play compliance and regulatory, uh, interfaces.

Speaker C: One of the things you touched on earlier, Kelvin, is just the differences that we see across the region. International expansion is hard, but no matter where you go in the world and even some of the biggest fintechs have sometimes struggled with their international expansion efforts. And obviously what makes you successful in one country doesn't necessarily make you successful in another market. And I witnessed this myself when I was working in Hong Kong where obviously market dynamics and customer behavior is so fundamentally different compared to what we're seeing in the uk. What challenges do you guys see for Asian fintechs looking to expand across the region?

Speaker B: The short term challenge is the uneven application of regulatory requirements across the markets. I think, for example, Vietnam still requires wet signature for client onboarding, whereas that doesn't exist for Indonesia anymore. Neither does it exist for Malaysia or Singapore. Uh, and you would run into multiple examples of that as you scale across the multiple countries. China is obviously way beyond, uh, 2029, I would argue in Japan, ironically might be way beyond way before 2015. I think that is the first short term obstacle for scaling across multiple regions in Asia. And for fintechs to find a business model that is not dependent on adhering to a singular regulatory regime to scale, that is a massive challenge for fintech, especially if you're consumer facing.

Speaker A: I would agree with what Kelvin said to me. There are a couple of ways to look at it. Whatever problem you're looking to solve, I think the initial market that you look to start off with needs to have a wide enough appeal that if you're successful there, the success counts for something and people are willing to give you the requisite capital, uh, to enter into another market. I think often what I see is founders start off solving in a country that is too small to begin with, or fundamentally you're addressing a problem that's too small and there's less sympathy for it because it's something one new going in. It's not something to be found out five years into the journey. Why did you start there? I think to me what's more interesting out of all of this is, you know, there's a lot that's talked about, as Kelman said, the unevenness of the region. Once you're able to get around it, that becomes your biggest moat as well. There is no shortcut to success. You've got to do your hard yards again. It comes back to my point. If you can get execution right and start out in a more methodical way where the Roadmap is a lot clearer in terms of how you plan to get to your North Star. Then these things start to which are impediments actually start to work in your favor.

Speaker B: So just to add a layer to Rishi's comments, it also depends on whether you are a direct to consumer fintech, you are direct business fintech or you are enterprise technology platform, all of which have different challenges. Direct to consumers, relatively easy to get to a single market, relatively easy to launch. But scalability is a real issue on various countries. Same applies in terms of middling between 1 and 3 in direct to small businesses for example because KYB requirements are different, monitoring requirements are different in each market. Enterprise fintechs have the advantage of being more, shall we say regulation agnostic in that they create the capability for multiple regulations anyway. But sales cycles are long. Getting to market takes a long time. Going live is a two to three year process. So those are the trade offs. I think from that perspective that people need to be aware of.

Speaker C: I want to ask you guys a couple of questions. We talked a lot about the current state of fintech in Asia and how do we think this space will evolve? Earlier during the show we talked about the fact that fintech investments in Asia saw a significant drop in the past year or so. On the flip side and as I referred to earlier, many of my discussions with founders and investors in the region, I'm actually seeing a lot of renewed optimism and excitement, which I think is fantastic to see. How do you think the landscape, the fintech landscape in Asia will evolve in uh, let's say the next two to three years? I mean give us something to be optimistic about.

Speaker B: I'm going to be skeptical and say again, before April 2023 no one was talking about Genai guys. So two to three years is a bit of a stretch but if you ask me, I think the trajectory will continue. I think you will see a lot more, hopefully different uh, business models coming out from Asia. Given the innate challenges that the Asian fintechs face, you will see some emerge from that, hopefully better. I don't know. The reality is, I think that there is optimism purely because there's an expectation at some point that the Fed will have to lower interest rates and therefore funding will become a bit easier. People's expectations become a little bit better, uh, with the sense of sensibility for sustainable growth providing a new lens through which hopefully better, at least cheaper source of funding, uh, provides for investors. So sorry, in a nutshell, don't know in two to three years, but I think that we will see a new business model emerged from Asian fintech that we haven't seen before.

Speaker C: That'll be very exciting.

Speaker A: I'm a little bit more optimistic, maybe just the seat that I have. What I take heart from is I, uh, think everybody has come to the general consensus. After a fair bit of introspection, businesses have actually started to fix themselves. And once these fixes are in place, we forget there's still a ton of capital and dry powder that is just sitting. And the operative word is it's growth capital, the word being growth. So the number of conversations I have with founders is it's no good to be a three, $4 million top line business. Yes, you're profitable, great, but that is insufficient to wherever you're headed. I think the point is to come back into growth mode. Re show that the growth is actually the growth that got everybody excited in the first place. You've learned what now works better and you're going to put those learnings to work. That is your execution risk is lower as a result, cost of capital should be lower, more dollars should be put to work. I mean, to me that's how I think about it.

Speaker C: I think it's a really, really good point. Um, just building on that point, again, looking towards the future, I had a really interesting discussion with some friends in uh, London the other day about, because obviously we want to see more IPOs in London, not just fintech IPOs but IPOs more broadly. And there's a fair few companies that I've spoken to who instead of looking towards London, they're all looking at New York, for example. What do you think needs to happen? Again, if you look at the Asian, uh, fintech investment landscape more broadly, what do you think needs to happen in order for the region to attract more investment? Whether that's from local regional investors or even international investors, really seeing Asia as an attractive opportunity for growth.

Speaker A: It comes back to the same thing that you are now at a certain level of scale where the benefits of scale are starting to work for you because you know, fundamentally every company, no matter which gen AI company as well, ultimately has to get valued on positive cash flows. Every company has to get valued on that basis. And I think effectively the sooner you can start to show that you're on a path to that, even if it is just on a per unit basis. And then it's a matter of scale which exists because the demand is there. Given you're going after the right problem, set capital will follow. It's as simple as that. In My mind and investors aren't looking for the perfect path either. I think what they're saying is, show me enough proof, points will build the rest of the bridge. But if you're just at point A and you want me to visualize the path myself, that isn't going to happen anymore. You're the entrepreneur, you're the expert. You've got to figure out how to get from point A to point B. And investor is the facilitator.

Speaker B: I defer to your expertise on this, of course, Rishi, but I have, uh, something else to add to that. Perhaps the ability or the opportunity for an exit also has a real impact on this conversation. Most people want to list in New York for an IPO because the access to capital is much easier in the U.S. investors are there. The capital markets in Southeast Asia in general has been less than exciting versus London or New York.

Speaker C: Right.

Speaker B: So from that perspective, maybe if you list in China, but they come with other considerations. So from that perspective, that may be something to think about. And we know that the Singapore government, we know that the Malaysian government, even the Thai government are working to try to get capital pools in this region for local fintechs to be able to go to market here. Uh, but so far we still haven't seen that much in terms of momentum. So I don't know. I'm honestly not too clued in on this aspect, but I think that it's something to consider.

Speaker C: You mentioned the role of government. One, I think similar to what you've witnessed in the uk, similar to what we've seen in other parts of the world, I think the government has a clear role to play when it comes to creating the environment for fintechs to thrive. Uh, really, really focusing on how do we drive not just more innovation, but how do we stimulate more competition in the market. From your perspective, what do you think is the role that not just governments, but also other industry bodies could play or should play when it comes to supporting the growth of the sector? Again, really creating an environment for fintechs to thrive.

Speaker B: Okay, I may be a little biased in this one, so I'll, um, caveat that first. I think that there could be a little bit more of a managed risk taking mindset from governments. Right. For example, if you are looking to do a small ticket mass market loan, this is largely on the consumer facing side of things, then surely if you kept the amount of loan that you give out to whatever, to $100 per loan or whatever that might be, then you should be able to allow for Things like income estimation models in developing markets as opposed to documentary proof of income which in most cases in people working in villages in, in Indonesia or Malaysia or Vietnam probably won't have that. And you will have to be able to take some risk on third party data to be able to estimate the individual's cash flow and make some risk and obviously price for it accordingly. You can't have two sides of the coin. You can't say let's protect all consumers and say this is a lending cap on interest rates and then create a proliferation of black market lenders who chop hands off and on the other hand say, hey, let's not take risk on, on figuring out what the cash flow of the individual is. At some point the two needs to come together. I think that from a consumer facing at least access to credit standpoint, governments can really help.

Speaker C: One of the things that we talked about is just the vast size of the region. I think hopefully these stats are correct. But it was still 48 different countries, nearly 5 billion people, making up nearly 60% of the world's population. Again, looking across the region, is there a particular part of Asia that you guys are very, very excited about where you see a lot of innovation? Again, the government is playing a very, very active role in stimulating growth. Is there anything in particular that really stands out to you guys?

Speaker B: I'm very, very bullish on India. I'm very bullish on India. I think the Indian government is doing a lot of the right things to create the infrastructure to establishment of UPI and Aadhaar, huh? Was a master stroke. I mean this was the last five, ten years, right? And that sets the foundational framework for many, many things to come to be in India. And I'm um, bullish on Indian not because of the foundational framework, which of course is progressive, but because it's a foundational framework in a market that is ridiculously huge and one of the youngest working populations around the world, which means that they are going to be an exploding middle class in the next 10 years. So I am very bullish and very long on India.

Speaker A: I agree with Kelvin. Uh, the only thing I'll add to what Kelvin said is I think they are putting the right checks and balances in place. So they're not just necessarily pro fintech at all costs. They're also making sure they are, you know, granting of licenses, adhering to certain standards, the bar is being set at a certain level so that it's not just to support innovation, but to support innovation in the right way, if you will. And so the consumer is protected and yes, they want to stimulate the growth, but but not at the detriment of the customer or what have you. So I agree with you. I think the Indian government has done a tremendous job where they are.

Speaker B: I think they establish a very good playbook for the Vietnamese government, the Thai governments to follow and create the right ecosystems for the countries of their size. I'm very excited about China as well, to be fair. But China does face a, shall we say, population distribution issue. But that's a 20, 30 year conversation from now.

Speaker C: Uh, I got one final question for you guys and I'm going to ask you the same question but in a slightly different way. I'm going to come to you first, Kelvin, on this one. What advice do you have for aspiring entrepreneurs looking to build a successful fintech business in Asia?

Speaker B: My instinctive response is I don't know because I haven't yet built a successful fintech business in Asia. I'm on my way there. I think it's crossed. My second response is depends on how much pain tolerance you have, don't do it. And my final piece of this is the reality of the matter is if you want to be a fintech of any scale, and this is my personal opinion, there will be no escaping collaboration with large incumbents, entrenched financial institutions. If you believe you can turn it on its head. You could have 20 years ago, but today I think that's going to be hard given the access to resources and the familiarity now with the tech conversations that large FIs have. So it's good for founders, uh, in this region to learn how to interact with the incumbent banks, learn their processes, learn their governance requirements, learn their compliance, uh, policies and why they do it, and get familiar and figure a way out to work with them. Otherwise it's really difficult to scale separately.

Speaker C: Rishi, it's the same question for you, but I'm going to ask it in a slightly different way. So what advice do you have for. And again, taking into account everything that we've just talked about, what advice do you have for aspiring investors looking to invest into fintech in Asia?

Speaker A: Great question, Jeff. Don't let the past effectively create too much of a negative bias. Yes, I think 2020, 2021 was. There was anonymity in those two years. I think the ecosystem has come out stronger. Fundamentally, what was attractive about the region very much remains in place. There are big problems to be solved here. Success could mean very, very big things. It is just ensuring you're backing the founders where you can actually believe in their vision, but you can equally back their execution skills. And if you can get comfortable with them, you know, those are good investments to back.

Speaker C: I think that's a nice positive note to end on, guys. Uh, thank you so much for listening to this very special episode of Deciphered from a very hot and sticky Bangkok. Uh, Kelvin Rishi, that was a fantastic discussion. I very much enjoyed that. Uh, thank you so much for joining us. We could easily continue this conversation for another hour, but yeah, we should definitely do that. But then over a nice cold beer. Uh, where can listeners find out more about you?

Speaker B: Calvin well, you can Obviously visit my LinkedIn page or you can go to www.audaxaudax.IO to find out more about Audax and what we do.

Speaker C: Very good. Audax IO.

Speaker A: Uh Rishi LinkedIn or www.torchpartners.com.

Speaker C: very good. You can find me on either Twitter or LinkedIn. Of course. Keep an eye on Bain.com for some of the latest fintech and broader financial services insights. If you enjoyed that, please leave us a preferably a five star review on Apple and Spotify or your favorite podcast platform. And also please do subscribe to the podcast so you never miss an episode going forward. Kelvin Rishi, thanks again for joining us. That was a great discussion.

Speaker B: Thanks Jeff.