Nick Hungerford, the Portag3 Ventures partner and Nutmeg cofounder, on the differences and lessons he's learnt working in fintech in Asia and Europe.
In Asia in FinTech, what is happening is generations ahead of what we have here in Europe. The companies are absolutely fascinating and dwarf in size most of the fintech companies that are here in Europe.
When I think of companies like Ping An or AliPay—just how many people use them, the volume of transactions that go through them each year—is completed remarkable.
In Asia, everything can be done pretty instantly through technology: So the lending company, or the fintech company, can work with the telephone company to access your Sim data - your messaging data. You just have to download the app and give it permission.
It will then read all your messages, and understand if your bank's been texting you and if your bank has been texting you it can then just read off the balance of how much you have or how much you owe.
It of course automatically enables them to see on your social networks who you're friends with. And then it should know whether your friends are good people who pay back their money as well, or whether they're completely unreliable and make assumptions of you through that.
In Europe, you might think, 'Oh, my goodness, how scary is that'. But why not allow people to use that data? To make your life better and easier and simpler.
The European and UK financial services infrastructure have been pretty much the same for centuries, whereas in China, technology gave people the opportunity to have access to financial services that they otherwise would never have had interested in. One of the takeaways I've had from living in Asia is I think that hardware changes in fintech may be more applicable for for moving from continent to continent than software changes.
If we think about software changes, they really are oftentimes dependent on the culture of the user and the culture of the provider. Whereas with hardware, let's take a simple example of paying with your phone, for example, loading up a virtual bank account. That's really easy to transport.
So the more that these businesses that can actually adapt on on the hardware side, then that's an easier, smoother transition to go global. The better we do in terms of creation of product, the more that consumers are going to buy, and the better we will do as a result. So whether it's about product or about the level of service and the level of engagement, all firms—new or established incumbents—need to think about how they're going to get to the client, how they're going to interact with the client, and what those service methods are going to be.
Nick is a banker turned entrepreneur and investor who's passionate about improving the availability and usability of financial products and services. He was cofounder and director of Nutmeg, and is now a Senior Partner at Portag3 Ventures.