The TECS #tecsthenewleaders are rapidly emerging as the new leaders. The paths they follow differ widely in various Asian markets, due to local conditions and regulations. However, the common theme is that the TECS, rather than traditional banks, will be the dominant players in Asian personal financial services and emerging markets.

1. MOBILE PAYMENTS – THE ‘TECS’ LED
DISRUPTION OF PERSONAL FINANCIAL
SERVICES.
Seamless Philippines
September 28, 2017
Sandeep Deobhakta
Retail Banking Head
VP Bank
sandeepd@alum.mit.edu
@sandeepdeobhakt
#TECSTHENEWLEADERS
https://www.linkedin.com/in/sandeep-deobhakta-914b3a1/?ppe=1
NOTE: This presentation reflects my personal views and observations only. These views are not expressed on behalf of my current or previous employers.

2. THANKS TO
1. CONNY DORRESTIJN
SHIRAZ PARTNERS
FINTECH | NEWTECH BUSINESS DEVELOPMENT
2. GUNNEET SINGH BALLY
VP BANK
3. HEEJUNG KIM
BENEPAY ASIA
3. MASTERCARD, VIETNAM
4. VISA, VIETNAM

3. QUESTION
WHICH CONTINENT / COUNTRY LEADS IN
THE MOBILE PAYMENTS SPACE?

4. OF THE TOP 20 COUNTRIES IN THE WORLD
FOR MOBILE MONEY USAGE,
15 ARE IN AFRICA.
ACCORDING TO A SURVEY CONDUCTED BY THE GATES FOUNDATION, THE WORLD BANK AND GALLUP WORLD POLL.

5. QUESTION
WHO ARE THE DOMINANT FINANCIAL
SERVICES PLAYERS IN ASIA?

6. WHO HAS THE LARGEST USERS?

7. WHO HAS THE DATA?

8. THE ‘TECS’ ARE RAPIDLY TRANSFORMING
PERSONAL FINANCIAL SERVICES!

9. ‘TECS’
The rapid growth of mobile usage, social networks and e-commerce platforms has
transformed the way people communicate and transact around the world.
T - Telco /mobile operators
EC - E-commerce platforms
S - Social

10. THE ‘TECS’ HAVE THE DATA, THE OIL
OF THE DIGITAL ERA

11. THE ‘TECS’ COMPANIES’ CONTROL OF
DATA GIVES THEM ENORMOUS POWER.
Think of all the data that
your bank and insurance
company sends you via
SMS?
Source: https://www.economist.com/news/leaders/21721656-data-economy-demands-new-approach-antitrust-rules-worlds-most-valuable-resource

12. THE ‘TECS’ ARE INVESTING IN ASIA
Alibaba
• Alibaba is the largest investor
in Lazada
• Ant Financial has invested
USD 1.2 Billion in MoneyGram
• Kakao Pay in Korea
• Ascend Money in Thailand
• Mynt in the Philippines
• Emtek in Indonesia
• M-Daq is Singapore
• Compare Asia, online
insurance
Tencent
• Sanook and Ookabee in
Thailand
• Gojek in Indonesia
• Hike in India
• Invested in VNG, the owner of
ZALO messaging in Vietnam
‘TECS’ in India –
payment banks
• Alibaba is the biggest investor
in PayTM, the biggest e-wallet
with over 200 Million users
• India has issued 11 payment
bank licenses. The major
mobile operators now have
payment bank licenses.

13. ALIBABA, ANT FINANCIAL, TENCENT AND OTHER ‘TECS’
ARE ALREADY THE DOMINANT PLAYERS IN ASIA.
THE ‘TECS’ ARE TRANSFORMING & DISRUPTING THE
FINANCIAL SERVICES INDUSTRY.

14. A RAPID OVERVIEW OF 4 ‘TECS’ LED MOBILE
PAYMENT MARKETS -
KENYA, CHINA, INDIA & KOREA
Integrating digital payments into these growing networks and platforms has
presented vast opportunities to drive economic opportunity, financial inclusion,
transparency, security, and growth.

15. KENYA – TELCO/ MOBILE OPERATOR LED
M-Pesa (M for mobile, pesa is Swahili for money) is a mobile phone-based money
transfer, financing and microfinancing service, launched in 2007 by Vodafone for
Safaricom and Vodacom, the largest mobile network operators in Kenya and
Tanzania.

16. MOBILE MONEY USAGE IN AFRICA

17. MOBILE MONEY IS UBIQUITOUS IN KENYA

18. 130,000 M-PESA AGENTS AND 50,000 ACTIVE
MERCHANTS MAKE IT VERY EASY TO CASH IN,
CASH OUT AND TRANSACT.

19. MPESA VIDEO
https://www.youtube.com/watch?v=uygbfBWYMiE

20. CHINA – THE TALE OF TWO ‘TECS’ GIANTS
Two of China’s most far-reaching applications – WeChat and Alipay – their
role is central to the development of one of the world’s largest and most
sophisticated digital payments ecosystems.
Source: Social Networks, e-Commerce Platforms, and the Growth of Digital Payment Ecosystems in China: What It Means for Other Countries. Better than
Cash Alliance. April 2017. Authors: Zennon Kapron & Michelle Meertens

21. EVOLUTION – ALIPAY AND WE CHAT
Alipay has 520 million monthly active users, who each spent
US$2,921 on average in 2015. By comparison, WeChat has >
900 million monthly active users who spent $1526 [in 2016] on
average.
Source: Social Networks, e-Commerce Platforms, and the Growth of Digital Payment Ecosystems in China: What It Means for Other Countries. Better than
Cash Alliance. April 2017. Authors: Zennon Kapron & Michelle Meertens

22. THE RAPID GROWTH IN MOBILE PAYMENTS IS
CHANGING BEHAVIOR AND THE FINANCIAL
SERVICES LANDSCAPE
Source: Social Networks, e-Commerce Platforms, and the Growth of Digital Payment Ecosystems in China: What It Means for Other Countries. Better than
Cash Alliance. April 2017. Authors: Zennon Kapron & Michelle Meertens

23. MOBILE PAYMENTS ARE CHANGING LIVES -
THROUGH ACCESS AND INCLUSION
Kaiyu Ma runs a small store selling used clothing on
Taobao. She says this is a great way to earn money as
she looks after her young daughter. She is not alone.
Digital payments help individuals and families improve
their lives.
Source: Social Networks, e-Commerce Platforms, and the Growth of Digital Payment Ecosystems in China: What It Means for Other Countries. Better than
Cash Alliance. April 2017. Authors: Zennon Kapron & Michelle Meertens

24. Source: Social Networks, e-
Commerce Platforms, and the
Growth of Digital Payment
Ecosystems in China: What It Means
for Other Countries. Better than Cash
Alliance. April 2017. Authors: Zennon
Kapron & Michelle Meertens
E-commerce
platforms
Data & transaction
processing
Payment system
Banking, loans and
wealth
management
Capabilities-
Infrastructure,
analytics and
scoring

25. INDIA – AN INTEGRATED ECOSYSTEM
The central bank [RBI] is playing a catalytical role by means of enabling policy
framework, by allowing non banks in payments and promoting innovative
payment technologies

26. THE KEY DRIVERS OF THE PAYMENTS
ECOSYSTEM IN INDIA

27. Key enabler
that allows
any wallet to
connect to
any bank
account
Payment
apps that
leverage the
biometric
national ID
New
category of
banks that
enable
wallets and
Mobile
operators

28. UPI IS A KEY ENABLER

29. DEMONETIZATION HAS DRIVEN THE GROWTH
OF MOBILE PAYMENTS IN INDIA

30. THE LATEST ENTRANT
Source: http://www.bbc.com/news/technology-41306312

31. VIETNAM – POTENTIAL AND OPPORTUNITY
Vietnam is aiming to move towards a 90% cashless economy by 2020. To
promote e-wallets, The State Bank of Vietnam has released circular 39, officially
recognizing e-wallets as a payment service.
Source: 1. Vietnam Briefing, july 12, 2017 and 2. FIS – Flavors of Fast. http://www.fisglobal.com/

32. KOREA – SOCIAL AND MESSAGING
Kakao Bank, Korea's second online-only bank, celebrated a meteoric
first month in business in August 2017.
Source: http://english.chosun.com/site/data/html_dir/2017/08/30/2017083001480.html?related_all

34. Source: http://www.businesskorea.co.kr/english/news/money/18805-threatening-traditional-banks-kakao-bank-made-its-debut

35. The bank had 3.07 million accounts in August 2017
• 1.94 trillion won (US$1.73 billion) in deposits and savings and
extending
• 1.40 trillion won (US$1.25 billion) in loans, according to the
bank.
• More than 2.16 million debit cards have been issued.
Source: http://www.huffingtonpost.com/entry/kakao-bank-creates-the-catfish-effect-in-local-banking_us_59a41cbbe4b0a62d0987b0c2

36. IT INTENSIFIED COMPETITION AMONG BANKS…

37. SO, WHAT ARE THE
IMPLICATIONS?

38. FOR CUSTOMERS

40. FOR BANKS

41. BY 2018, DIGITAL
DISRUPTION IN
BANKING IS
EXPECTED TO
REACH ITS
INFLECTION
POINT
Likely revenue disruption
due to digital

42. Source: McKinsey, Retail_banking_in_Asia_Actionable_insights_for_new_opportunities

43. SOME EXAMPLES OF
PARTNERSHIPS AND
CUSTOMER INSIGHT DRIVEN
PRODUCTS AT VP BANK