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AMTD gives MAS-backed AFIN the H.K. touch

Funding aims to inject Greater China tech expertise into AFIN, a platform connecting banks and fintechs.



Yosha Gupta, IFC

One year ago, DigFin wrote about a platform in the making that would help banks in Southeast and South Asia connect with fintechs from around the world. Now the project, called the Asian Financial Innovation Network (AFIN), has added Hong Kong to the mix just weeks before it goes live.

The International Finance Corporation, the private-sector lending arm of the World Bank, had been spearheading the AFIN initiative in cooperation with the Asean Bankers Association and the Monetary Authority of Singapore.

In November, the project took shape: the MAS announced the creation of the marketplace, called APIX. (APIX is the actual platform and AFIN is the company operating it; APIX should not to be confused with another API exchange, also called APIX, built by Hong Kong payments company Jetco.)

Now the project has received a major boost with a donation (amount undisclosed) by AMTD Foundation, a non-profit arm of AMTD, a Hong Kong financial group with a focus on fintech. AMTD CEO Calvin Choi is joining the AFIN board of directors. The APIX platform is slated to go live in July.

In addition to supporting financial inclusion, the addition of AMTD brings a Chinese-language presence to AFIN, and the company is encouraging Hong Kong-based fintechs to get involved in the runup to APIX’s debut.

One platform, many APIs

More than 90 fintechs worldwide are registered on APIX, mainly from India and Singapore, says Yosha Gupta, consultant to IFC for digital payments and financial inclusion, and one of the people developing the APIX platform.

Yesterday in Hong Kong she presented a demo of the platform, showing how banks and fintechs can share APIs and test them in a sandbox. “Banks can even combine APIs from multiple fintechs so they can create a holistic product,” she said, although at this stage the data is generic and synthetic; at a later stage the data will become customizable for local markets.

“We want to collaborate with AFIN,” said Tan Bin Ru, Singapore CEO at OneConnect Financial Techonology, Ping An Group’s fintech arm. “We have similar objectives.”

Yousaf Masud, co-founder of Hong Kong wealthtech, said the API approach should add value to fintechs looking for financial institutions. “We want to focus on working with users, not on infrastructure,” he said.

No brainer

Raymond Yung, vice chairman at AMTD, said he first learned about APIX at the 2017 Singapore Fintech Festival, when MAS fintech leader Sopnendu Mohanty introduced the concept. “It’s a no-brainer for fintech and for financial inclusion,” he said.

The resulting platform is an impetus for banks, insurers and other financial institutions in Asian markets to source fintech partners in a secure manner.

AFIN was set up to help banks in emerging markets that don’t have access to fintechs and aren’t sure how to carry out digital transformation; and for fintech companies that find it expensive and difficult to pitch to individual banks in smaller markets – and which can’t pay like global firms.

Its MAS backing planted it in Southeast Asia and South Asia. AMTD’s involvement is meant to bring mainland Chinese and Hong Kong expertise to bear. (AMTD is a shareholder in one of Hong Kong’s new virtual banks, in conjunction with mainland telecom firm Xiaomi.)

Financial inclusion

“IFC’s interest is to help financial institutions move down-market and foster financial inclusion, as well as mitigate the impact of climate change” on poor people who lack financial service, said Rachel Freeman, advisory member at IFC and a founder of AFIN.

She says many banks in emerging markets are dissuaded from innovation because they think it’s expensive, that it requires massive changes to their core systems, and that they need to hire a lot of experts. Today it takes six to eight months to seal a partnership with a fintech, with related costs mounting to $1 million.

“This is a market failure,” she said, adding that AFIN should make the process faster, cheaper, and more secure.

Ivan Mortimer-Schutts, a digital payments and payments specialist at the World Bank, says over time, as more banks and fintechs use the platform, they will develop standards – particularly as central banks also get involved.

“There should be an organic movement to advocate for standards,” in which banks, fintechs and regulators can select the best ideas from the likes of Europe’s PSD2 regulations, to enable data to be shared more efficiently and safely. “That depends on AFIN attracting strong engagement,” he said, but whatever code of conducts that emerge would stand a better chance of adoption among Asian regulators than having Western rules forced upon them.

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