‘FinTechs use emerging technologies to redesign the financial landscape’

Although she began as a lawyer, Singapore based Neha Mehta later made a switch to finance and FinTech, and finally decided to jump on the bandwagon and ride the FinTech wave in early 2017. 

In 2018, Neha decided that she had a higher calling – to boost the presence of women in the FinTech sector and drive financial inclusion for women. She then founded the FemTech partners a year later.

This dynamic entrepreneur recently talked with The Business Standard. Here is an excerpt of that interview for our readers. 

The Business Standard: Please tell us something about your academic and professional background? 

Neha Mehta: I have a double degree in Commerce and Law from University of Delhi, India. I also have a Master's diploma in Business Journalism and Corporate Communication. 

In 2017, I attended King's College London on Chevening Financial Fellowship, sponsored by the UK Foreign and Commonwealth Development Office (FCDO). 

I was part of the inaugural batch consisting of eight professionals from India who visited the UK to learn from the financial regulators and industry experts. 

This was a follow up after PM Modi's visit to the UK wherein he had proposed that India's finest talents learn the best practices in the UK's financial sector. 

I started my career as a corporate lawyer in Singapore but soon switched to regulatory advocacy work with trade associations in hedge funds, private equity, and venture capital. In 2012, I assisted Deutsche Börse's expansion into the Indian market. 

However, working in this space has been the most gratifying experience of my life. I strongly believe that FinTech has the ability to amplify the tech in good components.

Recently I was selected as the SDG Finance Expert by the United Nations Development Programme (UNDP). 

Besides founding FemTech Partners, I am the FinTech Team Lead for the South East Asia (SEA) Prosperity Fund (PF), and also working with PYXERA Global alongside Black Rock on a social challenge exploring financial inclusion for migrant workers and foreign domestic workers in Singapore.
 
I was also named as Singapore's Top 100 Women in Tech 2020, one of Asia's 50 Most Influential Women in Renewable Energy, 2020, and featured in FinTech 50, 2019 and 2020 and conferred with the 'Global Future FinTech Leader' Award at the FinTech Festival Abu Dhabi 2020.

TBS: You are the founder of FemTech partners. Can you please tell us about your organisation? 

NM: FemTech Partners was set up to strengthen the world's 50% Point of View (POV), to have more women in leadership roles as it currently stands at 9%. 

Globally, only one in three businesses are owned by women and only 6.2% of women owned established businesses as compared to 9.5% of men.

FemTech Partners is headquartered out of Singapore and was started in 2019 to create a level playing field for women in FinTech and to bring more women under the financial ecosystem. We use FinTech solutions to bridge the gender and digital divide.

We believe in promoting young women from different cultural backgrounds. We create an environment where new ideas and innovations can be nurtured. Currently, all our employees are female and we look forward to adding more to the FemTech Partners family. 

The firm specialises in FinTech and Financial Inclusion and strives to achieve Sustainable Development Goals (SDG) and works closely with development agencies. 

Last year, we were awarded the British Chamber of Commerce Award for the UK Impact in Singapore category. FemTech Partners has been highly involved in bringing the UK and Singapore FinTech ecosystems together. 

TBS: One of the agendas of FemTech partners is to 'always promote women in FinTech space'. What will the inclusion of women bring to the industry? 

NM: Globally, 1.7 billion adults remain unbanked and women make up 55% of the world's unbanked population, meaning they have no access to banking or insurance products. 

For many of them it means that their money is not protected, they have no access to savings or checking accounts, or financial products like insurance, credit facilities and loans.

Compounding this issue is the fact that the benefits of the digital age are not being shared equally. Women – especially those living in poor and marginalised communities – are most likely to be on the wrong side of a persistent digital divide. 

Two hundred million more men than women have access to the internet, and women are 21% less likely to own mobile phones that help them transfer money, run a business and connect with their community more effectively. Including women in FinTech space can be an important measure to deal with the digital divide. 

In 2019 through my work with the Voluntary Service Overseas (VSO) I carried out extensive field visits to meet women and youths in remote areas of Bangladesh to understand the current landscape and depth of capital problem and to provide them faster and cheaper access to finance. 

My recommendations were focused on FinTech solutions such as mobile money, e-KYC, AI for credit scoring and micro-insurance through bKash platform. 

I admire work done by bKash and would like to link up their work with Singapore and other Asian corridors. Hopefully after Covid-19 we can make sure the Bangladeshi migrant workers employed in Singapore are more resilient and future ready.

In the near future, Emotional Intelligence will increasingly become an asset for FinTech and other sectors alike, from winning over investors to interviewing prospective employees to successfully connecting with customers. 
Given the traditional association of women with Emotional Intelligence, we need more women. Inclusion of women will bring diversity, emotional intelligence and a new perspective to all industries. 

TBS: What is your overall assessment of the FinTech scenario in Asia? Do you think the regulators here are ready to accept things like crypto currency into the mainstream? 

NM: I believe the Covid-19 pandemic could be a game changer for Digital Financial Services (DFS). 

The shift towards digital financial services was already helping societies advance financial inclusion before the pandemic started, benefiting many low-income households and small firms with typically little access to traditional financial institutions. 

Lockdowns and social distancing have accelerated the use of digital financial services, just as the SARS epidemic in 2003 hastened China's launching of digital payments and e-commerce.

Women are fighting gender, digital and financial divide more acutely than ever before. The sooner a business can go from Offline to Online (O2O) the better its chances of surviving. 

New normal for businesses is a digital world equipped with e-commerce, e-payments and trade finance and supply chain using Blockchain technology and having robust cyber security.

The FinTech landscape can be generally grouped into 10 different subsectors, with payments, alternative leading and Banking Tech (AI and ML for KYC, and AML/CFT) accounting for nearly 70% of ASEAN deal value in 2020.

In the ASEAN region, Payments, Digital banks, WealthTech and InsurTech remain the most attractive themes of FinTech during the pandemic. Digital banking is gaining traction across ASEAN.

Bank of Thailand announced in Jan 2020 that they are looking into licenses for digital banks. In 2020, MAS issued four digital bank licenses (two digital full banks and two digital wholesale banks). In Malaysia, five Digital Banking Licenses will be issued by mid-2021 etc.

Digitalisation is reshaping economic activity, shrinking the role of cash, and spurring new digital forms of money. Central banks have been pondering whether and how to adapt.

While private-backed digital currency has been around for a long time, it is only in recent times that governments across the world have taken an interest. 

The already existing virtual currencies are commonly called crypto currencies. Crypto currencies run on distributed-ledger technology, i.e., there are multiple devices all over the world that are constantly verifying its accuracy and not just one central hub. 

Crypto currency can be fully decentralised such as Bitcoin while they can be centralised like Facebook's Libra. Central Bank Digital Currency (CBDC) is a digital currency which holds the same value as fiat currency issued by a country's central bank. 

The concept of 'Future of Money' delves deeper into the world of CBDC. 

The rise of CBDC and what it means for the general public especially when we are looking to go cashless as it is more hygienic, how some governments across the world have brought about CBDC, its many implications with respect to privacy, the use of data, the implementation of monetary policy. 

The impact of CBDC on financial inclusion for the unbanked and the under-banked is immense.  

The growth of use of crypto currencies can be twofold:

First phase is the wider usage of crypto by many merchants as a means of transaction. At this stage, you do not need permission from the government or a bank since it is a people-to-people or peer-to-peer exchange mechanism.

Second phase is the traditional banks exchanging fiat for crypto and vice-versa, which means local and international payment systems are embedded in the crypto currency ecosystem. 

Even though some crypto has not been accepted as legal tenders, some banks have openly liberalised transactions almost to a point of having dualistic currencies (fiat and crypto) running parallel to each other.

TBS: What do you think are the main challenges for start-ups; especially for a FinTech start-up? 

NM: A few challenges could be obtaining funding for starting-up, lack of adoption due to infrastructure in remote areas, heavy regulations and compliance requirements, huge competition from existing players, legal complexities etc. 

With limited guidance available in this space, and limited access to financial services, these challenges are even more complicated for women. 

Women face daunting funding challenges, as they get less than 3% of VC funding. I want to share my learning as widely as possible to help entrepreneurs bypass these biases. 

One way of doing is to be part of the leadership through board memberships for start-ups, especially women led businesses. 

TBS: Do you believe FinTech is 'more fin than tech?' If so, why? 

NM: "There are two big opportunities in the future financial industry. One is online banking, where all the financial institutions go online; the other is internet finance, which is purely led by outsiders." – Jack Ma

FinTech is more about fin rather than tech. FinTechs use emerging technologies to redesign the financial landscape. The ultimate goal of FinTech is to help with the financial industry, but with the use of technology. FinTechs need people who not only know 'fin', but also 'tech'. Thus, tech is the core of the FinTech. 

We need developers, programmers, coders to build a digital bridge for people and businesses. 

But for this to happen, central banks will need to consider their own innovation as well as create an enabling environment for FinTechs and TechFins (technology firms such as Google, Amazon and Alibaba) to deliver innovative financial services. 

This may include digital currencies and application programme interfaces (API) for open banking.

TBS: Do you think a major disruption in the traditional financial industry is coming ahead? Are the financial institutions ready for this disruption? 

NM: Covid-19 is the biggest setback to gender equality as it would set women back decades. The major disruption that could help women is the acceleration of digitalisation. FinTech as a force of good will play a key role in moving the dial. 

The pandemic has pushed the pace and adoption of innovation- business and financial institutions are left with no choice but to adapt to the new normal. 

For the first time, cash withdrawal and deposits fell sharply further affecting the poorest of the poor who heavily rely on cash. 

Use of cloud-based services to ensure remote working and smooth functioning of banking systems has only augmented the growth of innovation and efficiency. 

Governments across the global are trying to make sure that no one is left behind in the digital era and remittance channels function smoothly.

Some of the least developed countries have leapfrogged to disruptive technologies such as mobile technology without experiencing fixed lines. 

This coupled with digital and financial literacy in the local language will go a long way to ensure that the bottom of the pyramid becomes financially resilient to feather the aftershocks of the global pandemic.

Financial services need to be accessible and affordable to be used by all. By introducing non-traditional sources of credit to a credit-starved population and small businesses, FinTech lenders can help people get easy access to capital. 

Peer to Peer Lending (P2P) and pocket loans to SMEs, and adoption of digital technologies, FinTechs create a faster, safer, and more efficient lending ecosystem, which can protect the interests of both the borrowers and the lenders.  

Thus, by developing a robust digital lending ecosystem, FinTechs and leaders have the potential to truly participate and contribute in the world's economic progress by being drivers and enablers of financial inclusion.