This week I am delighted to welcome Jon Vollemaere CEO of R5FX to talk about the realpolitik of Fintech Scaleups, Asia Fintech and how relevant the “Fintech” label is and isn’t over the journey from being a Fintech Startup to Scaleup.
R5 offers a new electronic marketplace for emerging market foreign exchange (EMFX) and electronic non-deliverable forwards (eNDF) and has a prestigious single-figure millions investment from Deutsche Boerse and have offices in London and Singapore.
Jon was one of the early guests on the show, entirely synchronicitously being the guest on show number 5.
Upcoming Regulation requires Foreign Exchange (FX) trading banks to drastically change their current trading channels for the BRICS and other Emerging Market/NDF currency pairs.
Today these currencies are currently traded and fixed over a number of old, difficult to track and inefficient methods. The market is opaque and liable to imperfect price movements to the detriment of bank customers and consumers, hence regulators desire for change.
R5 is building the emerging marketplace for FX banks that not only satisfies these new legal
requirements, but also specialises in the fast growing transaction volumes in BRIC
and emerging economy currencies.
What is the journey like from startup to serious player?
What in prior and existing narratives around Fintech is BS/hype/fantasy?
What are the differences that matter at the coalface of competition for clients?
Where’s it all going?
Along with these topics we discuss:
– how the vibe of the Fintech scene has changed from 2014 to 2016
– “when do you stop calling yourself a Fintech?” – at some point it’s like stopping calling oneself a dot-com
– the broad scale of what is counted as Fintech these days and how the brand value has changed
– tales from Hong Kong about Asia and China Fintech – at that point 1,000 P2Ps had gone bust but there are 2,000 still around; the funds having been invested in the stockmarket (as there is no regulation); Hong Kong selling itself as China entry but having regulatory oversight
– Hackathons at the FCA and the MAS (Monetary Authority of Singapore) looking at doing something similar
– the role of regulation looking at the spectrum from Equity Crowdfunding in the States, the UK and China P2P – perversely of course the regulatory practices being bureaucratic and centrally-controlled in the US and very “free market” in China
– learnings from the past two years being surprisingly similar to any small company growing; the main difference being there is very little margin for error
– changes of business direction being accommodated along the way
– complexities around cultural localisation of business practices around the world
– specialities about Chinese ways of doing business
– the neo-imperialistic subtext of “the West” attempting to impose its concepts of society and business on countries around the world
– the stickiness of customers even if you are offering a better solution
– banks as being very very slow at changing these days (when they used to be very good at implementing new things), the reasons behind this
– a tale about how someone in a bank recently had to get 82 signatures to get a relatively straightforward thing done in a bank :-O
– the stat of more than 95% of Fintechs globally haven’t yet broken even
– the challenge of getting the “right” investor as well as “the money” – comparison with marriage; – the importance of valuation and market size in this context
– competition co-operation and everything in between with #newFS and #oldFS
– the growth for R5FX coming from the growth of emerging countries and markets
– the rather different dynamics of these countries/customers – often leapfrogging the more old world/oldskool approaches (and being less bureaucratic customers)
– innovation initiatives in many of these countries as being far ahead of ours [and the neo-imperialistic narrative underlying claims of our global Fintech superiority]
– the Bombay stock exchange as being a great example of where others are far ahead in innovating – it has an entire floor dedicated to Fintech startups; this tale alone worth listening to the podcast for 🙂
– the relevance of segmenting Fintech by geography of customer
– R5FX’s centralised all-to-all marketplace model
– customers are higher end financial institutions; minimum order size $1m
– revenue coming from a brokerage fee
– R5FX’s future plans – plenty of new and interesting economies and markets
– increasingly the life of a Fintech is mostly around “being a good business” – the core competencies and issues of any growing business outweigh the more specific Fintech-y stuff
And much much more 🙂
Share and enjoy!