"With fintech, people over-index on the math of why someone should do something. They forget about the psychology of someone buying that financial product. Most financial products don't get bought very often if you think about it. It's not a daily decision you're making. There are a lot of considerations that go into purchasing a financial product, and they're not all math. Most people actually are emotion-driven, not math-driven. They forget to talk to their customer about their considerations. They go straight to the numbers and the math, and a lot of people don't enjoy that because it doesn't resonate. They don't engage with it well." - Shiyan Koh
"Neobanks were a huge category that got funded, but the report indicates only about 5% of them are profitable. This is where they run into that problem, which is you can go out and get a lot of users, but if you're not disciplined about how you underwrite and monetize them, it can be a money-losing proposition. It's on the neobanks and incumbent banks to improve the product experience and make customers stay even if other places offer slightly more interest." - Shiyan Koh
"People tend to focus a lot on the cost of acquisition because that seems to be a more straightforward go-to-market. They want to buy and sell. A lot of aspiring fintech founders end up getting shocked by the cost of capital, especially since there's been a lot of change over the past three years. So a lot of models that seem to work, don’t work at different levels of cost of capital. A huge amount of humility around the accuracy of the underwriting is going to be key. When you build a company in your deck, you're going to know your cost of capital pretty fast. Your cost of acquisition is doable if you do a fit test, and you understand the vertical well. I've seen some fintech founders fail when they don’t think about how each of these factors could change over time." - Jeremy Au
In this episode, Jeremy Au speaks on Sea Group's 29% stock price drop, digital bank strategy synergy, and fintech underwriting quality.
Keywords: Sea Group Stock Price 29% Drop, Digital Bank Strategy Synergy, Fintech Underwriting Quality, Singapore, FinTech, Thought Leadership
