Digital Banking Models

This post is a contuation of our previous post, on a hypothetical exploration what if some of the 'non-winners' got the nod instead:

BigBank

BigPay: Parent AirAsia have always envisioned a pan ASEAN presence, starting with travel and then accommodation. A logical next step is a seamless digital bank.

• Open an account in Jakarta and be in good financial standing in Manila
• Get paid in SG and withdraw in KL.
• Buy a property in Nusantara (new capital) and pay instalments in SG.
• Bring ASEAN economically closer together vs groupings like EU, CARICOM (Caribbean), AEC (Africa) and GCC (Gulf States), BIMP-EAGA (Borneo)

EduBank

Sunway: Gradual savings toward education after A-levels.

• Received an offer to study at a top notch uni like Oxbridge, MIT, Havard or Stanford?
• But can't take up the offer due to insufficient funds?
• Start saving when young, accumulated monies can be utilized for education, housing, mobility or starting a family etc.
• Loans are available if funds are insufficient.

Digital Banks: Winners & Non-Winners

 Last week, Bank Negara Malaysia (BNM) announced the five successful applicants fo MY\s digital bank licenses:

Cigar

• AEON Credit + AEON Financial + MoneyLion
• Axiata - Boost + RHB
• Grab + Singtel + Kuok Group
• KAF Investment Bank + MoneyMatch + Carsome
• Shopee + YTL

No Cigar

• Angkasa Cooperative + Boustead
• BigPay + MIDF + Ikhlas Capital
• GreenPacket + Zico + M24 Tawreeq
• iFast + Armed Forces Cooperative + THZ Alliance + 99SpeedMart +YillionBank
• Kenanga Bank + Revenue Group + Sarawak
• Paramount + Star Media + RCE Capital
• Presto Wallet + Sabah + Pahang
• Sunway + LinkLokgis (Tencent) + Bangkok Bank

Notes

• Preference seem to be  given to consortia which at least one member has a large app-based user base eg. Boost, Grab and Shopee. THiis is perhaps to give the sucessful licencees the best possible start vs HK digital banks which took some time to gain traction.
• A possible lean towards the B40 maket eg. Grab works wih riders and mcro-enterprises.
• BigPay seems to meet the above 2 criteria but could have been hampered by the lack of a standout deep-pocketed partrner.
• Sunway and Paramount are prominent candidates but they could be seen as mainly non-financial M40/T20 players.

TNB Raya 2022

The great balik kampung exodus starts today( (and tomorrow). Drive slowly and patienly like these two TNB technicians who notice an Indian lady stranded on a rural road and decide to give her a ride to her destination in their pickup. A YouTube remix acompanied by Wali Band's Ya Allah.

TNB's official Raya ad for 2022 can be viewed here. Being a public utility, it's more of a brand maintenance execise with a smogarsbord of elements including EV charging, geometric cakes, North vs South cuisine and ebanking.

Speaking of TNB and electricity, before taking off for the long festive break, remember to (not pro advce):

• Switch off fans, air-cons, chargers, computers, TVs, stoves, ovens water heaters etc.
• Leave on (and check) CCTVs, alarms, routers (for remote CCTV access), fridges, porch lights, spotlights, some internal lights, aquarium aerators & diffusers (also remeber to water the plants).

Selamat Hari Raya Aidilfitri!

Rapid Delivery

• Whicch is the more lucrative business: food delivery, groceries or ride hailing?
• According to the order of icons of these services in a prominent 'superapp', food delivery is the most lucrative, followed by groceries, then ride hailing.
• This could be a new type of ecommerce, one where the logistics platform takes centre stage.
• Previously, ecoomerce models were like malls (or standalone stores), merchants get a shop in the mall and get the benefits of the mall's brand recognition, cutomers flocking to the mall, and making purchases thererof. While the mall is a funnel, fulfillment and logistics are sill handled by the merchant.
• Delivery platforms do one better, they handle the immense hassle of logistics (order taking, payment, pickup, delivery, complaints, refunds, reviews) whilst offering merchants a huge market of ready hyper-local customers.
• All the merchant has to do is to sign-up a a merchant, receive orders, do picking and packaging and handover to the delivey rider or driver. Saves the merchant a tonne of hassles and time compared to slow, beareaucratic mall plaforms.
• For a spanking new physical mall, we are seeing swathes of birck-and-mortar shops signing up on rapid delivery platforms.: the brick-and-mortar gets extra business from eommerce plus it inroduces itself to the neighbourhood via exposure and an online catalog.

Modular Nuclear

• A few months back, we featured a $100M carbon removal challenge by Elon Musk and X-Prize (no grand prize winner but 23 student prizes were awarded).
• Upping the ante, Meta, Alphabet, Stripe, Shopiify and McKinsey have stepped forward to offer a $1B advanced market commitment (AMC, a guarantee to buy carbon credits from the most promising carbon removal startups).
• Carbon capture is moving to the forefront as emissions reduction is too slow and iffy and the climate emergency is getting too real (strange weather, floods, droughts).
• On the emissions side, a big culprit is power generation using fossil fuels (coal, natural gas)). Solar and wind are making some gains but are not practical in many locations and applications.
• There are grand plans for countries with ample sunlight and cloudless skies (essentially deserts) to build vast solar farms and export the power via long distance electric transmission or, possibly green hydrogen.
• Another promising non-carbon power source are small modular reactors (SMRs), nuclear fission reactors that are made in factories and installed on site. The SMRs are safer, cheaper to acquire and run than conventional reactors. A possible future high growth industry.
• SMR fits nicely with sky high fuel prices, power hungry desalination plants (droughts are coming). and the EV revolution. Some SMR players: Toshiba (JP), CGNPC, CNNC (CN), UltraSafe (CA), KEPCO, KAERI(SK), GE-Hitachi, Westinghouse (US), Framatome, Areva (FR), OKBM Afrikanotov (RU), Rolls Royce (UK), ThorCon (ID).

Gwallet

The race is on to define the nextgen and web3's wallet and identification standards. Last week, Meta proposed 'Zuck Bucks' as its vision of digital currency for the metaverse.. Now, Gooogle looks to revamp its Google Pay wallet with a new icon and possibly a new name ('Gwallet'?). More than new branding, web3 offers verdant opportunities for a new wallet:

• Pairing of identity and wallet.- Use your wallet to login into 3rd party sites, replaces the use of Gmail as login.
• A universal wallet for cash, cards, tokens, identification, credentials, memberships, tickets, passes, insurance, medical card and the metaverse.
• Can incorporate and work with sovereign/national systems (social security number, passport, vax certs, driving license).
• Cancel-proof identification and wallet. vs the hassle of losing one's Gmail aacount

Apple is also working on the hardware real-world version of the ewallet via Apple Watch which should enable functions ike NFC payments and transactions.

Intangible Marketing

How do you market class, prestige, refinement, excellence and desire?

• In the first video, Porsche brilliantly nvokes nostalgic childhood memories of looking out of one's classroom windows, day dreaming on objects of desire, and resolving to get them one day. A subtle yet memorable ad.
• In the second video, Omega uses a meticulously produced, high quality animation, and  an emotive score to convey a brand message of tradition, progress, adventure, craftsmanship, precision and attention to detail, without going into technical specifications or features.

The ZuckBuck MetaCurrency

• After two tilts at a digital cuurencies, Meta is mulling another go to go along with ts vision of the metaverse.
• DUbbed 'Zuck Bucks', the latest attempt leans towards a radical, simplified and practical implementation in contrast to the current the-more-complex-the-better crypto trend.
• No block chain and therefore sans associated complexities such as proof of work, zero knowledge, gas fees, L1, L2 coin scarcity, smart contracts etc.
• Because 'Zuck Bucks' is likely intended for light weight transactions, and not as a challenger to the fiat money system, it can be implemented as tokens within the Meta ecosystem and passed around like messages like in Whatsapp.
• There will be tokens for content creation, influencer repute and group discussion contributions, game achievement etc.
• Because tokens are not money, they can be treated slightly less rigorously as as compared to handling money.
• In a nod to Web3, Meta is also looking into a decentralised identification.: an id and wallet that the user can take anywhere, not necessarily tied to Meta or an exchange.
• Early days yet, remains to be seen whether Meta can pull this off or will the latest effort will go the same way as the previous two.

Work From Office

Preface

• Apple is asking its employees to return to the office starting April 11. For 3 daya a week. Even with this concession, some employees are rebelling, citing long commutes and having to be in the office aimlessly.
• On rhe oher hand, Wall Street firms like Goldman Sachs are asking staff to return to a 5 day office week The nature of work in BigTech (developers want to lbe left alone to laser focus on coding) differs frrom BigFin (lots of cross functional teamwork & communications)
• Some speculate the big bosses want workers back in offices to prop up the commercial property market. In reality, the CEOs might have othe reasons (see next section):

Working From Office

• Pevent employees from becoming hermits and losing touch with the company.
• Prreserve espirit de corp.
• Gorup work and a social einvironment maintain mental health and collaborative creativity.
• Solidarity with employees who can't WFH.
• Revitalise the once buzzing office.

Other WFO Perks

• Lunches taste much bettter when eaten wiith colleagues.
• Dressing up for work prevents a descend into grunge.

Possible WFO Incentives

• Offices should be well ventilated with rmeasured ACH (air changes per hour) and CO2 levels.
• Company sponsored N95 masks amd RTK Antigen testkits.
• A move t to a 4-day work week with Fridays (or Mondays) off.
• A 4-day work week could be inevitable, prospective executive employees might consider it or hybrid work an essemtial perk.

Elon's Paradise

• Elon Musk is involved in two major ventures: the more well-known consumer facing Tesla, and  the far more technically challenging, SpaceX.
• Watch this YouTuber's inspired mix of hiphop rap hit Gngasta's Paradise and clips from SpaceX's early days.
• Gangsta in this context alludes to someone who is acomplished, skillfull and supremely confident (not mobsters or members of street gangs). Paradise is a state of high personal and societal achievement.
• In he video, Elon ahakes off sceptics, slights, put-downs, doubts, weaknesses, setbacks, mishaps and errors (symbolised by the exploding rockets). It tells of how one must go through the pain of 'newbie limbo', (hardwork, uncertainty, being fearful, hesitant, clumsy, aamateurish, ignorant, improvished, uncomimmitted lookng to 'try-only',) before graduating to Gangsta's Paradise.
• Beginning is always tough, even learning to cycle or to swim. Sometimes, one needs a spark, or a sharp nudge to jump right in.

YC Winter 2022

WE had a look at Y Combinator's Winter 2022 batch of 300+ graduating startups and picked 3 intriguing ones:

Andi

• Google is considered 'good enough' for general queries, but for specialist searches, it looks to have been overwhelmed by spam, SEO and its own ad revenue priorities
• Andi is a Google challenger with a conversational interface
• Results are still rough,,not much better than Google, but still early days.

Soon

• Crypto, stock and commodity prices go up an down.
• Conseequently, punters in these are obssessed with the latest prices, movements and news, which can be an unhealthy distraction and emotional drain.
• Soon breaks this addiction by buying and selling based on a pre-deerminined schedule, rather than having the punter pick the right time ( time the market')

Poko

• Want to formalise a Web2 casual gou'ping?
• You can do so by setting up Web3 distributed autonomous oorganisation (DAO) by ginving the group a a name, purpose,, platform, constitution (smart contracts) , and officers and members (token holders).
• If the DAO gains sufficient traction it will inevitably intrude into the real-world, where it will need to take care of imatters like legal status, laws, jurisdiction, physical adresss, taxation etc.
• Others like bank accounts are taken qare off natvely by Web3.
• Or vice-versa, a real-world company that wishes to be incorporated using DAO plumbing rather than the traditional memorandum of incorporation etc.
• Poko provides services o integrate DAOs with the real-wold in the above scenarios.

Crypto Down Under

On Friday (Feb 24,2022), staid Aussie lender ANZ Bank went crypto by minting its own AUD-backed stablecoin A$DC. In a pilot transaction, A$30 million was transferred in 10 minutes in what would normally have taken several days using conventional banking. The supporting cast:

• ANZ on behalf of Viictor Smorgon Group - Pilot sender of A$DC
• Fireblocks on behalf of Zerocap - Pilot recipient of A$DC
• OpenZeppelin - Smart contracts auditor for A$DC
• Chainalysis - Regaulatory advisor for A$DC

Potato Vada

Wheat Stocks

RU and UA account for a third of the world's wheat exports. If the ccoflict between them drags on, wheat suppies could face a shortfall and/or sky-high prices. France is already planning a food voucher sytem for this contingency. Locally, the following wheat products could be impacted: bread, roti prata/canai, chapati, naan, wheat noodles (mee, ramen, instant noodles), pasta, cakes, buns, cookies etc. There is a fallback carbo: rice, so nasi lemak, laksa, idlyll, thosai, meehoon, kway teow can still be had.

Potato Vada

Another carbo alternative is the potato. Vada (pronounced 'vadey') is a popular strret snack in IN and SEA. It is a savoury doughnut made from dhal and chickpea flours, and spices. Mumbai has its own version of the Vada, with the centre, instead of a hole, filled in with a potato masala patty and shaped into a ball .Watch as a Mumbai street vendor whip up some some Mumbai Vada [rai=mustard seeds, jeera=cumin seeds, kasuri methi=dried fenugreek leaves].

DeFi Bank

Defacto Digital Banks

BNM (MY's banking regulator) is due to announce the 5 winners of MY's digital banking licenses this week or next. We have covered some of the candidate consortiums a few weeks back.. Here are two additional 'consortiums' that could be possible de facto digital banks by way of their parent banks' full banking license:

• CIMB - TouchnGo - AliPay
• Al-Rajhi - Thought Machine

DeFI Bank

Which consoritum will likely win a digital bnking license? Let's do a thought experiment and assume BNM aims to incubate a world class DeFi crypto bank instead of domestic digital banks catering for the ubanked and underserved. Which would be the strongest consortiums?

Axiata - Boost - RHB

Axiata is a regional telco and player. A cypto bank will allow it to serve all its markets seamlessly as cypto is borderless and highly scalable. Boost comes into the picture as the UI (like Metamask), RHB can be the trustee bank. Ideal additional parter: MX GLobal (Binace + Cuscapi). MX Global has crypto chops and Binance would be an invaluable partner as they have vast multi-jurisdiction experience, and expertise in technology and cybersecurity.

Grab - Singtel

Grab has many users for ts app, and Singel has depth of resources. Ideal additional partner: Paxos. Paxos has much experience navigating tech through eagle-eyed regulators. It also provides the crypto rails for PayPal, Venmo and Novi. Though NYC-HQed, one of its founders is a Singaporean. Paxos recently received approval from MAS (SG's banking regulator) to offer digital payment token services

Kenanga Bank - Revenue Group - Sarawak

If you look at Kenanga's products, they are exactly the ones targeted by DeFi: an incentive and imperative to be ahead of the curve or get overtaken. Revenue Group is a payment gateway provider, well-positioned to push crypto for payments. Sarawak, a state in MY has its fair share of un and under-banked. a good testbed wheher cypro can be inclusive and acessible. Ideal partner: FTX. FTX is offering $1 million reward to banks which are willing to accept stablecoins. Stablecoins could be the new 'reserve currency', (gold or greenback-backed, non volatile, free-flowing, easily exchangable, widely accepted) and would be an attractive deposit currency.

Ramadan Delights

With Ramadan just around the corner, here's a foodie tour of some break fast delights from a small SG hawker stall named Alham with its amazing variety of snacks, most of them self-made. Foodie Ramadan? Gluttony or austerity? Neither, it's a festive post (bazaars etc) about budget street food and nourishment.

Notice the passion and enthusiasm of the lady proprietor and the breath of products. In it, lies some tips from SG's hawker ecosystem in regards to small business incubation:

• Government run hawker centres are modern and well-maintained. Even top officials eat there. As SG pmodernised, it pulled the once dowdy hawkers up along with it.
• Hawkers are provided with space, (a stall), utilities, dining facilities for customers long-term tenancy, reasonable fees, ample foot traffic and managed variety (a direct competitor won't open next stall)
• In effect, the government tries its best to remove obstacles to aspiring food artisans to start up and to reduce hindrances to day-to-day operations. In return, the food entrepreneur is expected to do his/her best to bootstrap the business and make it sustainable and a success.
• Ways which a stall can distinguish itself and attract customers: food R&D, prominent signage, colourful and delicious-looking food displays, friendly service, in-stall or in house production: eg. self-made prata dough, in-stall mills, steamers, and roasters.
• Foreign workers are not allowed to work in stalls. This forces proprietors to draw upon family to help out ('mom and dad seem to be working very hard, I think I should go help them.'). This helps to ensure the handing down of proprietary family recipes and grit to a new generation and the preservation of culturall IP.

Alfa Romeo Tonale

NFTs are currently commonly associated with minimalist artwork with high valuations. But NFTs have mundane, business use cases as well. Alfa Romeo is promoting its Tonale SUV as the world's first NFT blockchain car. In essence:

• The blockchain serves as a database to record vehicle details, ownership, service and and maintenance history, and possibly some telemetry data (a centralised secure database would probably do the job just as well). The service records help boost the resale of a car (if it is well maintained).
• The NFT is a certificate of origin, authenticity and ownership (in parallel with the the car's registration papers with local motor vehicles authorities). The NFT can help boost resale value too if the vehicle has past celebrity or prominent owners. It can also help guard against vehicle theft (the non-legit owner wouldn't have the NFT).

Lambo, RR and Mercs are doing NFTs too but instead of getting the underlying tech, they are joining the art crowd in coming out with artwork branded with their marques.

DeFi DeMystified

Primer

Hearing a lot about Defi (decentralised finance) lately and how it would sweep CeFi (centralised finance, banks etc) but perplexed by its arcane insider terms? Here's a rough primer using legacy analogies: [Updated: fixed numerous typos, included addendum.]

• Centralised Exchanges (CEX) - Bank. Cypto banks (Coinbase etc) sre purely custodians, they do not pay interest.
• Liquidity Provider (LP) - Bank/ Lending Club. You deposit crypto wih a LP (BlockFi etc) to earn interest. In turn, the LP pools and lends crypto to borrowers using a particular protocol and associated smart contracts and algorithms. The pocess is fully auomated: little or no central authority or intermediaries are needed.
• Protocols - Method and model how funds are collected, lent out, charged and rewarded. In CeFi, protocols might include conventional, syariah, co-op, loansharking etc.
• Decentralised Exhange (DEX) - Money Changer. Change from say ETH to USDT and vice-versa. Fully automated (eg.Uniswap), does not rqquire any centralised authority.
• Liquidity Mining /Yield Farming  - Interest / Dividends. Say, a friend of yours wants to set up a money changing booth in a mall. Popular currency exchanges at the mall are between USD and EUR. You lend your friend a liquidity pair of USD and EUR to seed his business, and in return get a cut of the commissions. If a few friends pool their money together for this venture, it becomes a liquidity pool.
  
• APY (Annual Percentage Yield) - DeFi's equivalent of CeFI's annual compounded interest rate.
• Staking - Guarantor. When a new blocckchain or coin is created, you stake money on it in expectation, as it grows, you will be rewarded for your trust and confidence. In a startup space, if you see branded VCs staking investments in a startup, these VCs are staking their money and reputation on the startup in expectation of future returns. In effect, these VCs are acting as validators. Validation gives the startup credibility and a leg up to attract customers and further investors.

DeFi vs CeFi

• Why do DeFi's APYs mostly seem higher (> 10%) than CeFi's interest rates (< 5%)? Selective quotation, frothy coin ecosystems: rising coin prices lift all boats.
• How does DeFi ensure a loan would be repaid automatically, with no resort to courts or collection agencies? By insisting on a plus-sized collateral (eg 150% of loan amount).
• Why borrrow 100% if you have 150%? Eaxmple: to quickly acquire a fast rising crypto for margin trading or speculation, not really for business loans etc.
• Lending and borrowing (finance) is a very human and humanistic activity (at its purest) and has long being pondered upon since early civilisation.
• A community or village lender might take a risk in lending money to a seemingly risky borrower without collateral by evaluating his or her venture, energy, character, parents, friends etc. Factors not currently easily amenable to computer algorithms (creepy data aggregation notwithstanding)..
• Does this mean DeFi's future is less than rosy? Only if the 'Fi' is taken as 'finance' but as shown by the examples in the previous section, DeFi could mean Decentralised Fintech.

Greenscapers

Greenscapers or greenscrapers, three examples of a trend to incorporate greenery as an integral part of the architectural design of towers: 1 2 3 4 5

• One River North (US) Perhaps taking a cue from the Grand Canyon, this Colorado high-rise residence features a signature rift in its design. The rift encompasses gardens and a four storey hiking trail.
• Capitaspring (SG) The exterior of this building looks conventional. The greenery is inside the building: 1) a ground level enclosed public park, 2) a mid-level sky garden and 3) a roof-level urban farm and observatory deck.
• 4 Seasons (AU). Instead of a polished glass facade, this Melbourne tower features flora terraces. Uniquely, the check-in for the hotel is at a top floor with spectacular views, instead of the usual ground floor.

A Kind of Hush

• War is deafening: explosions, bombs, artillery, rockets, gunfire, the roar of jet planes, copters and war chariots, sirens and klaxons, barked orders, strident media messaging.
• Just as the the most single important thing to a sick person is health, the single greatest desired outcome of war is peace, resolution, a hush over the land, and the return of the wrathful, implacable, unpredictable, all-consuming genie of war to its bottle (coaxed by a wise peacemaker?).
• Beware of harbouring ill-will for fellow hoomans, be a good listener and be careful of what you say to and of others, lest the genie is inadvertently summoned.
• VIdeo: There's a Kiind of Hush by Dana Winner.

Prawn Fritter Rojak

Nowadays, street food tend towards the-more-and-the-bigger-the-better smorgasbord of ingredients. Examples from the West are the multilayered hamburger and 'the works' hot dog.

In the East, rojak (spicy, savoury salad) has also gone down this road,it is commonly now a chaotic mix of veggies, fruits, hard boiled egg, fritters, tofu, smothered with heavy sauce, served on a plate.

WHat did original prawn fritter rojak looked like? It was a masterpiece of zen simplicity. It was sold as a disc of freshly-fried, crunchy prawn fritter sprinkled with julienned turnip and cucumber and topped with a dollop of light, piquant, spicy, savoury red rojak sauce.

Imagine a lesser amount of veggies in the first photo above sitting on a prawn fritter disc about twice the diameter of the ones shown in the second photo . Container and cuisine are one. You eat it by holding the disc and starting from the crunchy edges of the fritter till you reach the centre where the veggies, prawn and sauce are located. Appetiser at he edge, main course at the centre.