Name: KoreFusion at FinovateEurope 2024 - Payment innovation's role in emerging markets
Uploaded: 2024-03-07T10:54:00.156Z
Duration: 756.88

FF.INT.011_1.mp4

FF.INT.011.vtt

ENGLISH

{{00:00:04}}
Hello everybody, and welcome
to Fintech Futures here at

{{00:00:10}}
Finovate Europe in London, UK.

{{00:00:14}}
My name is Tyler Pathe, I'm a reporter
for Fintech Futures, and today I'm very

{{00:00:20}}
happy to be joined by Daniel Ben-Aron.

{{00:00:23}}
The Managing Director of KoreFusion.

{{00:00:26}}
Daniel, how are you?

{{00:00:28}}
Thank you for that lovely introduction.

{{00:00:29}}
Nice to meet you as well, Tyler.

{{00:00:30}}
Lovely to meet you too.

{{00:00:32}}
Are you, enjoying Finovate this year?

{{00:00:35}}
I, before we started rolling you mentioned
it was your first Finovate event.

{{00:00:39}}
What'd you make of it?

{{00:00:40}}
Yeah, it's great.

{{00:00:41}}
We do the conference circuit of Kaibamanu
2020 in Singapore and all these.

{{00:00:46}}
I've been to a one of these
festivals before at Finovate.

{{00:00:50}}
It's great.

{{00:00:51}}
Much more, I think.

{{00:00:52}}
Grassroots focus on FinTechs that are
actually in the trenches doing the

{{00:00:56}}
innovation, wonderful perspective.

{{00:00:59}}
It's really fantastic to
have you with us today.

{{00:01:02}}
I think it's quite an interesting
environment for a company like CoreFusion

{{00:01:07}}
to find themselves in, surrounded by
all these industry sort of movers and

{{00:01:11}}
shakers and disruptors, of course.

{{00:01:14}}
Before we get going, maybe you can
just tell us a little bit about

{{00:01:18}}
what Corefusion is, where you are,
what's your standing in the industry?

{{00:01:22}}
Sure.

{{00:01:23}}
We're, a two headed beast.

{{00:01:25}}
We are a management consultancy
with offices globally.

{{00:01:29}}
So Singapore, Mumbai Dubai, New
York, San Francisco, Mexico City.

{{00:01:36}}
And we're also regulated in the US as
an investment bank as a broker dealer.

{{00:01:41}}
So we run that out of San Francisco.

{{00:01:43}}
So we do a little bit of both working
for clients across the industry,

{{00:01:47}}
be them large financial service
incumbents all the way through to

{{00:01:52}}
startups and everything in between.

{{00:01:54}}
Fantastic.

{{00:01:56}}
It definitely sounds like you've got quite
a significant scope across the industry.

{{00:02:02}}
A lot of what we're seeing here at
Finovate, this year is looking at

{{00:02:07}}
really a lot of the latest trends.

{{00:02:09}}
in the, in financial technology for me
personally I've seen a lot in AI, in

{{00:02:17}}
tokenization, in trading a lot to do
with like compliance and regulation, as

{{00:02:22}}
you'd expect from a heavily regulated
industry, like finance and banking, but

{{00:02:29}}
for CoreFusion you've got You described
it as a two headed business, right?

{{00:02:36}}
And you've got a footprint in lots of
different countries across the world.

{{00:02:42}}
How do you think that the FinTech
landscape differs from your US offices

{{00:02:48}}
to your offices in India, for example?

{{00:02:50}}
I'd say there's probably
two main differences.

{{00:02:53}}
One is that the user needs, which
ultimately define what the FinTechs are

{{00:02:58}}
doing, how they're creating value in
the business models they're pursuing.

{{00:03:03}}
Differ significantly between
developing and emerging economies.

{{00:03:06}}
And so we work a lot in Southeast Asia,
India, middle markets as well, and totally

{{00:03:13}}
different world in terms of what the
end user requires as compared to places

{{00:03:18}}
like London New York, San Francisco.

{{00:03:20}}
The other factor that ultimately
determines that difference

{{00:03:25}}
is the ecosystem in which the
Fintechs themselves are operating.

{{00:03:30}}
What the financial ecosystem as driven
by the VCs look like, what the regulators

{{00:03:34}}
have to say and then the broader mix
of partners, whether that's go to

{{00:03:39}}
market channel partners or It could
even be how the credit bureau system

{{00:03:44}}
is set up in a particular country.

{{00:03:45}}
So there's a lot that kind of
comes together to define what

{{00:03:48}}
is possible and what needs to
be done for any given FinTech.

{{00:03:53}}
It's really interesting that you talk
about serving these sort of different

{{00:03:57}}
emerging needs within each market type.

{{00:04:02}}
Developed or mid market or
emerging market, for example.

{{00:04:06}}
From your standing, are you noticing
that there are major differences in

{{00:04:13}}
what the customer is demanding from
the industry between different agents.

{{00:04:19}}
Yeah, absolutely.

{{00:04:19}}
I like, I think of the example of,
Carvana the American kind of auto

{{00:04:26}}
selling platform which is not strictly
speaking of FinTech, but given the role

{{00:04:29}}
of financing in the industry, on the
one hand, and Move, which is a African

{{00:04:35}}
Nigerian startup that does auto loans.

{{00:04:38}}
So Carvana really speaks
to a market like the U.

{{00:04:42}}
S.

{{00:04:43}}
that, where 17 million new cars are bought
every year and provides a platform to

{{00:04:49}}
sell some of those on a secondary market.

{{00:04:52}}
Across all of Africa in 2022, I think
they, there was 900, 000 cars bought.

{{00:04:57}}
And part of the reason for that
discrepancy is the inability for

{{00:05:02}}
Africans to get auto financing.

{{00:05:04}}
And so cars are really thought of as
a luxury item across the continent.

{{00:05:09}}
And Move has stepped in to try
to address that funding gap.

{{00:05:13}}
I think they've raised over 100 million
to date to try to tackle that problem.

{{00:05:17}}
And to me the example between a FinTech
Dalek in the US selling secondary

{{00:05:23}}
products that everybody in the US
already has versus the African one that

{{00:05:27}}
is enabling people to get their first
entry into that market really talks

{{00:05:30}}
to the difference of needs and the way
that those needs are fulfilled gets

{{00:05:34}}
to some of those ecosystem questions.

{{00:05:38}}
How you're doing underwriting in
Africa obviously looks very different

{{00:05:42}}
than how you're doing in the US.

{{00:05:45}}
I'm not sure if you saw, but at the very
back of the hall, there was this huge map.

{{00:05:50}}
And they had places where you could
pinpoint where you'd come from today.

{{00:05:56}}
I, when I saw it, I thought, gosh
how, fantastic it is that you have all

{{00:06:00}}
of these different companies coming
together in one room and collaborating

{{00:06:04}}
all together in towards one cause.

{{00:06:08}}
When you look at these discrepancies
within different markets that you're

{{00:06:12}}
talking about, how do you think those
discrepancies slash differences have

{{00:06:18}}
spurred a new level of innovation.

{{00:06:19}}
What does that innovation look like?

{{00:06:22}}
Great question.

{{00:06:22}}
I think it, it depends on what
the type of innovation happening.

{{00:06:27}}
It does take a market level persona.

{{00:06:30}}
And I think what's really interesting
is where you start to see some

{{00:06:33}}
crossover pollinization between
emerging economies and developed

{{00:06:37}}
markets in terms of innovation.

{{00:06:39}}
If you look at the role of regulators,
for example, in driving innovation.

{{00:06:45}}
probably a little bit of borrowing
of best practices, globally.

{{00:06:49}}
So it could be folks in the U.

{{00:06:52}}
S.

{{00:06:52}}
looking at what India has done with
UPI and the success that they've had

{{00:06:56}}
in payments, and saying what can that
teach us about how we develop and adopt

{{00:07:00}}
a real time payments infrastructure
building on top of ACH in the U.

{{00:07:04}}
S.

{{00:07:05}}
Or it could be going the other way,
where, you know, Europe and the U.

{{00:07:09}}
K.

{{00:07:09}}
especially, leaders in open
banking and driving that agenda.

{{00:07:13}}
And the world, kind of country
by country, is starting to roll

{{00:07:16}}
out open banking frameworks.

{{00:07:18}}
So to go back to the example of Move
in Nigeria, in the last year or so

{{00:07:22}}
has opened, rolled out their own
framework that borrows heavily from

{{00:07:26}}
the model developed here in Europe.

{{00:07:27}}
So there is a cross pollinization
as regulators drive it.

{{00:07:32}}
Obviously, though, getting back to the
point of what the end user needs, what,

{{00:07:39}}
the way that businesses themselves
and the FinTechs themselves are

{{00:07:42}}
innovating to address Kind of those
different needs does differ, right?

{{00:07:47}}
In the U.

{{00:07:48}}
S., again, to take as an example
of credit, you have a very well

{{00:07:51}}
established banking system that
serves consumers very well.

{{00:07:54}}
There's high card penetration, so people
have access to unsecured lines of credit.

{{00:07:58}}
The credit bureau infrastructure
is highly efficient.

{{00:08:01}}
Some middle markets are
quickly catching up to that.

{{00:08:04}}
So if you look at as an example of
Saudi Arabia, very advanced, right?

{{00:08:10}}
In terms of their open regulatory
framework and the ability to

{{00:08:13}}
start to underwrite credit.

{{00:08:15}}
Again, tropicalization, the attitudes
towards credit in the Muslim world very,

{{00:08:21}}
different from in the Western world.

{{00:08:24}}
And that kind of informs the
way that a Muslim FinTech.

{{00:08:30}}
Take Tamara as an example of a
BNPL operating in that country.

{{00:08:35}}
Even how they perceive credit
risk because there's strong social

{{00:08:39}}
pressures for repayment that you see
in that part of the world that you

{{00:08:42}}
don't necessarily see in the West.

{{00:08:44}}
Yeah.

{{00:08:45}}
That's, it's really, interesting.

{{00:08:46}}
And I think, for me, it's like almost
two sides of the same coin in a sense,

{{00:08:54}}
because we spoke a lot about B2C and.

{{00:08:58}}
Serving the different needs of
consumers, of we talked about the

{{00:09:02}}
developments in Saudi, for example.

{{00:09:04}}
I, was very, fortunate to be able to
travel to Saudi last year and saw all of

{{00:09:10}}
the greatest innovations happening there.

{{00:09:12}}
In terms of the B2B landscape,
which is, I think, from what I've

{{00:09:18}}
seen on the agenda it's quite
evenly divided between B2B and B2C.

{{00:09:25}}
In regard to B2B, how how are
we seeing trends in FinTech

{{00:09:32}}
and payments emerging there?

{{00:09:33}}
Yeah, interesting phenomenon, I would
say, in B2B, whereas B2C, you see very

{{00:09:38}}
different, end user needs and landscapes.

{{00:09:43}}
B2B is actually much more similar
between emerging and developed markets.

{{00:09:47}}
I think, what when you look at credit
issuance as an example in Southeast

{{00:09:53}}
Asia the World Bank's identified a 2.

{{00:09:57}}
4 trillion SME credit gap
in that part of the world.

{{00:10:01}}
If you look at the U.

{{00:10:02}}
S.

{{00:10:02}}
in comparison, 40 percent of U.

{{00:10:04}}
S.

{{00:10:05}}
small businesses can't get a
loan when they go to their banks.

{{00:10:09}}
And so you really have actually pretty
similar dynamics or at least much

{{00:10:13}}
more similar than on the B2C side.

{{00:10:16}}
When you look at what the world of
FinTech is doing to start to address

{{00:10:21}}
or create value in the B2B space.

{{00:10:24}}
Historically, one of the points of entry
into the B2B market for Fintechs has

{{00:10:29}}
largely been around payments because
payments volumes and payments flows in

{{00:10:32}}
B2B are huge kind of 125 trillion in
global B2B payments volume last year

{{00:10:40}}
relative to about 50 in B2C, and so when
companies and Fintechs look at those,

{{00:10:45}}
Flows, there seem to be an opportunity.

{{00:10:49}}
What I think has emerged is that a lot of
that flow in B2B has been commoditized.

{{00:10:56}}
And so to start to create value,
it's not sufficient to just be your

{{00:11:00}}
payments rail, but rather you have
to start to create payments around,

{{00:11:03}}
value rather around the B2B payment.

{{00:11:06}}
And there's a lot of innovation, really
innovation happening across market types

{{00:11:10}}
in creating value around that B2B payment.

{{00:11:13}}
Could be obviously credit issuance
and the issuance of terms credit card

{{00:11:18}}
companies are looking at how they
can increase commercial card usage,

{{00:11:22}}
which is a perennial challenge,
particularly with issuers that may

{{00:11:27}}
not be prioritizing commercial cards
as much as they do consumer cards.

{{00:11:33}}
There's kind of opportunities to increase
efficiency of a kind of business process

{{00:11:39}}
and procurement and Marrying payments
into those kind of workflows as well To

{{00:11:44}}
bring down kind of manual intervention,
reduce errors, and it attach information

{{00:11:50}}
to payment Payments themselves to help
reconciliation and things like that.

{{00:11:55}}
So there's a lot of innovation happening
around payments within B2B But that

{{00:12:00}}
nut is the tough one to crack, and I
don't think anybody has yet achieved it.

{{00:12:04}}
Yeah, not yet, but hopefully with events
like these and attendees like you,

{{00:12:09}}
we It will be a challenge that will
be overcome sooner rather than later.

{{00:12:14}}
Daniel Ben-Aron of KoreFusion,
it's been fantastic to speak

{{00:12:19}}
with you this afternoon.

{{00:12:20}}
Thank you for attending the event.

{{00:12:22}}
Thank you everybody who has taken
the time to watch this video with us.

{{00:12:26}}
And if you'd like to find out more,
please head on over to fintechfutures.

{{00:12:30}}
com.

{{00:12:31}}
Thank you.

Hello everybody, and welcome
to Fintech Futures here at

My name is Tyler Pathe, I'm a reporter
for Fintech Futures, and today I'm very

I, before we started rolling you mentioned
it was your first Finovate event.

We do the conference circuit of Kaibamanu
2020 in Singapore and all these.

I've been to a one of these
festivals before at Finovate.

Grassroots focus on FinTechs that are
actually in the trenches doing the

It's really fantastic to
have you with us today.

I think it's quite an interesting
environment for a company like CoreFusion

to find themselves in, surrounded by
all these industry sort of movers and

Before we get going, maybe you can
just tell us a little bit about

what Corefusion is, where you are,
what's your standing in the industry?

We are a management consultancy
with offices globally.

So Singapore, Mumbai Dubai, New
York, San Francisco, Mexico City.

And we're also regulated in the US as
an investment bank as a broker dealer.

So we do a little bit of both working
for clients across the industry,

be them large financial service
incumbents all the way through to

It definitely sounds like you've got quite
a significant scope across the industry.

A lot of what we're seeing here at
Finovate, this year is looking at

in the, in financial technology for me
personally I've seen a lot in AI, in

tokenization, in trading a lot to do
with like compliance and regulation, as

you'd expect from a heavily regulated
industry, like finance and banking, but

for CoreFusion you've got You described
it as a two headed business, right?

And you've got a footprint in lots of
different countries across the world.

How do you think that the FinTech
landscape differs from your US offices

I'd say there's probably
two main differences.

One is that the user needs, which
ultimately define what the FinTechs are

doing, how they're creating value in
the business models they're pursuing.

Differ significantly between
developing and emerging economies.

And so we work a lot in Southeast Asia,
India, middle markets as well, and totally

different world in terms of what the
end user requires as compared to places

The other factor that ultimately
determines that difference

is the ecosystem in which the
Fintechs themselves are operating.

What the financial ecosystem as driven
by the VCs look like, what the regulators

have to say and then the broader mix
of partners, whether that's go to

market channel partners or It could
even be how the credit bureau system

So there's a lot that kind of
comes together to define what

is possible and what needs to
be done for any given FinTech.

It's really interesting that you talk
about serving these sort of different

Developed or mid market or
emerging market, for example.

From your standing, are you noticing
that there are major differences in

what the customer is demanding from
the industry between different agents.

I like, I think of the example of,
Carvana the American kind of auto

selling platform which is not strictly
speaking of FinTech, but given the role

of financing in the industry, on the
one hand, and Move, which is a African

So Carvana really speaks
to a market like the U.

that, where 17 million new cars are bought
every year and provides a platform to

sell some of those on a secondary market.

Across all of Africa in 2022, I think
they, there was 900, 000 cars bought.

And part of the reason for that
discrepancy is the inability for

And so cars are really thought of as
a luxury item across the continent.

And Move has stepped in to try
to address that funding gap.

I think they've raised over 100 million
to date to try to tackle that problem.

And to me the example between a FinTech
Dalek in the US selling secondary

products that everybody in the US
already has versus the African one that

is enabling people to get their first
entry into that market really talks

to the difference of needs and the way
that those needs are fulfilled gets

How you're doing underwriting in
Africa obviously looks very different

I'm not sure if you saw, but at the very
back of the hall, there was this huge map.

And they had places where you could
pinpoint where you'd come from today.

I, when I saw it, I thought, gosh
how, fantastic it is that you have all

of these different companies coming
together in one room and collaborating

When you look at these discrepancies
within different markets that you're

talking about, how do you think those
discrepancies slash differences have

I think it, it depends on what
the type of innovation happening.

And I think what's really interesting
is where you start to see some

FinTech Futures

Expert Insight

Deep in the depths of FinovateEurope's opening demo day this year, FinTech Futures had the invaluable opportunity to sit down with Daniel Ben-Aron, vice president of APAC for management consultancy and investment bank KoreFusion, to discuss the constantly evolving face of the worldwide fintech industry, and how the unstoppable speed of its evolution is conjuring up fresh levels of innovation across market demand, customer needs and the latest payment trends.