Banking has seen significant changes across the industry and around the world, and Southeast Asia has seen its fair share. With the digital banking licenses being handed out in Singapore to the increasing focus on financial literacy for the millions of unbanked in the region, it is an industry ripe for change.

One success story from the region is Nium (formerly InstaReM). This global financial technology platform has its beginnings and HQ in Singapore. It offers a full suite of banking-as-a-service (BaaS) solutions focused on crossborder spending.

It has evolved and pivoted its business model from solely focusing on consumer remittance to now being a powerhouse in the industry. They now operate in more than 100 countries to serve over 200 customers globally, processing billions of dollars a year for banks and payments institutions.

Singapore fintech

We look at how Singapore has become the regional hub for fintech

We had a chance to speak to Prajit Nanu, the CEO and Co-Founder of Nium about the company’s journey and what we can expect from the region. Here’s what he had to share.

Congrats on your success so far. Can you introduce Nium to our readers?

Thank you for your kind words. Nium was founded in 2015 with a vision to simplify the cross-border remittance experience. While continuing to be an expert in remittances, the team behind consumer remittance arm Instarem expanded and scaled its offerings to also meet the needs of the Financial Institutions, Enterprises, and other payment service providers. 

Today, customers can use Nium’s banking-as-a-service platform as a single connection that bridges the gaps in today’s global financial infrastructure. Cutting across international payments, card issuance and collection, the API-based solutions are offered in a modular framework, allowing customers to pick and choose or bundle up the solutions when needed. . Be it a new-age digital bank or a traditional industry player, our customers can leverage our stack to pick and choose from a wide spectrum of payments, card issuance, processing and collections to fulfil a specific business need or to creating an entire neobank. Our flexibility and scalability that we offer to businesses are what set us apart from others. 

Nium’s network is powered by our portfolio of licenses, hard-earned by building trust with financial regulators in nearly 40 countries. In addition to our ability to send payments anywhere in the world, we offer enhanced real-time payment capabilities in over 65 countries. We are regulated globally and have operations across six continents and cater to over 130 million end customers in more than 100 countries. This combination of regulatory and tech assets is unique to Nium and is at the core of our unique value proposition.

Businesses struggle with scaling, but Nium has expanded to over 100 countries – what do you believe has helped set you apart from the others?

Nium was built with the intention to scale, and our unique combination of regulatory and tech assets is built with that objective in mind. 

First, Nium’s flexible tech stack is built with both turnkey, cloud-based solutions and a flexible set of APIs to adapt to specific markets conditions and provide framework for other companies. Businesses can access our payment technology at scale, with the freedom to integrate our solutions with their existing stack, or create an entirely new product from scratch. 

Second, being a payments company, we know that regulatory licencing is always going to be something that we need to focus on. While building out our tech stack, we wasted no time in working to obtain regulatory licences in key markets across the world – including all of Europe, United States, Canada, as well as key markets in Asia Pacific, like India, Singapore, Malaysia, Hong Kong, and Australia. 

With all that done, we also needed to be strategic about where we start, given that ease of entry and regulatory turnaround time varies across markets. For instance, knowing that some licences could take months or even years to come in, Nium pilots new products and services in Singapore and Australia first – both markets known for their ease of doing business and administrative efficiency – before moving on to the other key markets around the world. This has allowed us to significantly shorten our go-to market time, while devising modular solutions to meet the needs of all consumers and businesses around the world. 

What are some of the challenges you had to overcome building a global business?

Above all, trust is needed to get a Money Services Business anywhere in the world up and running – but it takes an extraordinary amount of time, effort and patience to build that trust. With grit, perseverance, and patience, we – a relatively young Fintech company – managed to acquire regulatory licences and approvals in some of the most highly-regulated markets including Australia, Singapore, Hong Kong, Malaysia, India, United Kingdom, European Union and the U.S. within only four years of commencing operations. 

Asia is a particularly challenging market in terms of obtaining the necessary regulatory approvals and licences to operate. Unlike in Europe where a single licence from a member state effectively grants access to the entire European Union (EU) market, in Asia, one has to acquire separate licences from each individual country. This will be a continued challenge for the next 2-3 years as regulators are cautious – and rightly so – about extending approvals for a business to handle people’s money.

All fintech companies, however, face the same challenge – the battle with cash. The move towards cashless requires a behavioural change in most people. The recent pandemic has helped accelerated the adoption of digital financial services due to lockdown and social distancing measures. Today, even the older generation are open and curious to try out digital banking solutions. With a razor-sharp focus on lowering of costs and providing a superior customer experience, our customer retention rate is now as high as 80-85%.

Do you see the potential for strong growth within Southeast Asia for BaaS? Which markets in the region show the most potential?

Across the region, we’re seeing a huge unbanked and unserved opportunity in Southeast Asia. According to a research by Bain, the region is home to 70% of underbanked or unbanked adults, as well as millions of small and mid-size enterprises (SMEs) who face large funding gaps. 

While digital financial services are expected to generate about US$38 billion in annual revenue across the region by 2025, Southeast Asia remains a very diverse region, and market potential varies across borders. For instance, we see particularly strong growth opportunities in Indonesia, where the e-payment market is expected to surge to US$95 billion by 2025 – a nine fold jump from where it is today, and B2B eCommerce and payment revenue is continuing to clock an annual growth of around 50%. 

The very core of BaaS lies in strategic collaboration – where parties can connect directly with the systems of banks to build products on top of regulated infrastructure – to create seamless, scalable payment experiences across and within borders. It is promising that across the Southeast Asia region, we are beginning to see more collaborations between and amongst industry players such as regulators, FinTech partners, and businesses in the banking and financial services.

For example, Nium is providing services to four of the Top 10 banks in Southeast Asia. The traditional “rivalry” seen between banks and fintechs no longer exists, and many banks are looking to fintechs to help accelerate their go-to-market strategies.  

What is next for fintech in Southeast Asia in 2021?

Emerging technologies can become realistic solutions given the advancement of application programming interfaces (APIs). Open APIs, along with the open platform banking they enable, change the way financial services firms develop products and respond to demanding market segments, such as millennials and the younger generation, and also offers opportunities to foster innovation. Be it domestic or cross-border payments, card issuing and acquiring, collections and virtual accounts, alternative lending, discount broking etc., complex financial services are now available over API for bespoke consumption.

The concept of BaaS is not new, and one could even argue that the API economy made this a predictable outcome. However, it is still interesting to see how the treatment of BaaS is evolving. While regulation typically follows innovation, in some cases like Open Finance or Open APIs, it seems to have preceded and even seeded it. Sophisticated regulators around the world have created frameworks that make it possible for Fintechs to become a credible player in the ecosystem. A lot of countries have recently seen this gap completely traversed and “Digital Banking” regimes are a testament to that. The number, and kind of applicants that these attract is further proof that banking is inching towards becoming a true technological meritocracy. Investor sentiment and the increasing appetite for institutional Fintech is hence unsurprising.

What’s next for Nium?

International expansion and partnerships are key priorities for our company’s growth. Payments are all about scale, and that is our focus – to scale and grow the business across our Send, Spend, and Receive products. 

Though the pandemic has proven to be a business challenge for many, Nium has witnessed some of our strongest lifetime months recently. We have sealed multiple partnerships in recent months to expand our service offerings to more customers worldwide. Most recently, we are partnering with a Singapore-based IT and manpower solution provider to launch MyRemit, a remittance service within Aptiv8’s FWapp mobile application that allows foreign workers in Singapore to conduct digital remittance transactions digitally via an app – anytime and anywhere. We are also partnering with Singapore-based fintech startup Aspire, to go plastic-less through the issuance of virtual Visa corporate cards. This collaboration further enables all cards under Aspire to be made available on Google Pay. 

Nium is also expanding our global partnership network such as with Mexico’s prominent bank Accendo Banco to enable their users to conduct money transfers internationally. We are now also working with the Republic of Korea’s leading digital remittance provider E9pay to expand and enhance remittance offerings for E9pay’s corporate and individual customers. 

As a company, we are also rapidly expanding internally. Most recently, we appointed Frederick Crosby as our new Chief Revenue Officer; Dana Nino as Senior Vice President for Growth, Customer Success and Partnerships, Global; Clara Wanjiku Odero as Vice President, Partnerships and Growth, Middle East and Africa; and Ayoub Jemail as General Manager, Business Development for the Middle East. This series of new appointments come as we look to expand and develop our global financial infrastructure to enter new markets – The Middle East, Africa, and Latin America – and establish banking relationships to seamlessly move money around the world. 

We are aiming to grow our revenue two-folds or more by 2021, and at the same time expand our team worldwide before hitting the IPO stage.