Finantier: Singapore Open Finance Startup Backed by Y Combinator

The term “underbanked” signifies a lack of access to conventional financial services, such as traditional bank accounts and credit cards, rather than a complete absence of financial engagement. In regions like Indonesia, widespread adoption of digital wallets and e-commerce platforms generates alternative data sources that can be utilized to facilitate access to working capital and other financial products. Finantier, an open finance startup headquartered in Singapore, aims to consolidate this data through a unified API, granting financial service providers access to user data with explicit user permission. The platform also incorporates machine-learning analytics for credit scoring and Know Your Customer (KYC) verification processes.

Finantier is presently in a beta testing phase with over 20 clients and is preparing for its official launch. The company announced today its acceptance into the Winter 2021 batch of Y Combinator. Additionally, Finantier recently secured an undisclosed amount of pre-seed funding, with East Ventures leading the round and participation from AC Ventures, Genesia Ventures, Two Culture Capital, and other investment firms.

Founded earlier this year by Diego Rojas, Keng Low, and Edwin Kusuma, Finantier’s founders bring extensive experience in developing products for fintech companies, driven by a goal to enable open finance within emerging markets.

Open finance has evolved from open banking, the foundational framework upon which companies like Plaid and Tink are built. Designed to empower individuals with greater control over their financial data, rather than confining it within banks and other institutions, open finance allows users to securely grant access to their online account information – including bank accounts, credit cards, and digital wallets – to apps and websites of their choosing. While open banking primarily focuses on payment accounts, open finance, the core focus of Finantier, encompasses a broader range of services, such as business lending, mortgage applications, and insurance underwriting.

Finantier’s initial focus is on Singapore and Indonesia, but the company intends to expand its operations to other countries and establish itself as a global fintech leader, similar to Plaid. Vietnam and the Philippines are among the first target markets for expansion.

Prior to founding Finantier, Rojas contributed to product development for peer-to-peer lending platforms Lending Club and Dianrong, and held the position of chief technology officer at several Southeast Asian fintech startups. He observed that numerous companies faced challenges integrating with various platforms and obtaining data from banks, or procuring data from multiple vendors.

“The conversation revolves around open banking, embedded finance, and related concepts,” explained Rojas, Finantier’s chief executive officer, in an interview with TechCrunch. “However, these are merely the components of a larger movement – open finance. In a region like Southeast Asia, where approximately 60% to 70% of adults are unbanked or underbanked, we are dedicated to assisting consumers and businesses in utilizing the data they possess across multiple platforms. This data doesn’t necessarily have to reside in a bank account; it could be within a digital wallet, an e-commerce platform, or another service provider.”

For consumers, this translates to the possibility of establishing creditworthiness even without a traditional credit card, for instance, by sharing transaction data from e-commerce platforms. Individuals participating in the gig economy can gain access to more financial services and favorable terms by providing data related to their daily activities, such as rides or other work completed through various applications.

Building Southeast Asia’s financial infrastructure

Several open-banking companies operating in Southeast Asia include Brankas and Brick. Rojas explained that Finantier sets itself apart by concentrating on open finance and developing the foundational systems that allow financial organizations to develop enhanced services for their customers.

Financial institutions can expand their customer base and discover new avenues for collaborative revenue-sharing arrangements through open finance. Within Southeast Asia, this also translates to extending financial services to a greater number of individuals who are underserved or lack sufficient access to banking options.

Finantier will concurrently participate in the regulatory sandbox program run by the Indonesia Financial Service Authority while involved in Y Combinator’s accelerator initiative. Successful completion of this program will enable collaborations with a wider range of fintech businesses in Indonesia, including larger, established entities.

Willson Cuaca, co-founder and managing partner of East Ventures, stated that there are 139 million adults in Indonesia who are either underbanked or completely without banking services.

East Ventures, which concentrates its investments in Indonesia, annually publishes the East Ventures Digital Competitiveness Index. This research consistently reveals that financial exclusion represents one of the most substantial disparities. A considerable difference exists between the availability of financial services in densely populated islands like Java, the location of Jakarta, and those in other parts of the Indonesian archipelago.

To encourage greater financial inclusion and lessen the economic consequences of the COVID-19 pandemic, the Indonesian government aims to have 10 million micro, small and medium-sized enterprises (MSMEs) adopt digital technologies by year’s end. Currently, approximately eight million Indonesian MSMEs conduct sales online, which accounts for only 13% of the total MSME population in the nation.

Cuaca shared with TechCrunch that East Ventures’ investment in Finantier stems from the belief that “equitable access to financial services will generate widespread benefits for the Indonesian economy.” He further noted that “many companies are currently developing their own distinct solutions to broaden access to financial services. We anticipate that Finantier will empower them to provide a more comprehensive range of products and services to this currently underserved demographic.”