May 29, 2020
“FinTech Leadership During the COVID-19 Crisis” is a new video series created by MEDICI Studio and FinStep Asia. In this Q&A session, Simon Loong, Founder & Group CEO at WeLab, answers a few questions about how they are dealing with the COVID-19 pandemic as an organization.
This video Q&A was moderated by Syed Musheer Ahmed – Managing Director of FinStep Asia, and Amit Goel – Founder of MEDICI. MEDICI’s new video series aims to showcase FinTech leaders in times of crisis and how they and their teams navigate these uncertain times.
Snippets from the discussion
Amit Goel: What have been the considerations and challenges as you grew from a smaller FinTech to a Unicorn to then obtaining a banking license and becoming a virtual bank? What were the considerations for these different stages? What challenges did you face? How did you overcome them?
Simon Loong: We faced different challenges at different stages of the company. Initially, we founded the company in a very small “startup-ish” area in Sheung Wan in Hong Kong. At that time, we asked ourselves, “Do we want to be a $50 million company or a billion-dollar company?” With bigger aspirations, we realized that we need to expose ourselves to a larger market than the Hong Kong market, which has a 7 million population. Although Hong Kong was a fantastic test bed, we needed to face a much larger population. That’s why we entered the mainland China market, which was a different competitive landscape. We were able to apply a lot of our technology and experience in China, and we were quite successful.
From there, we also went on from being a B2C business and explored the B2B business model. Along the way, we realized that banks wanted technology like FinTech to fully deploy financial services online to mitigate fraud and credit risk. So, to be able to do that, we started our B2B business. That’s why we have a strong B2C and B2B business.
And from there, we also ventured into Indonesia, a Southeast Asian market that we would like to scale. So, it is all about slowly increasing the stakes step-by-step, scaling the know-how from our previous successes, and building from strength-to-strength.
Amit Goel: I also want to talk specifically about digital lending where you started. Now, in the current COVID-19 situation, there are two things to consider. One is that the overall consumption is going down in multiple markets; people are buying only the essentials, and the credit card spends are down. On the other hand, theoretically, digital products should do much better because people are staying at home because of lockdowns. So, between these two things, what do you see in terms of data points? Do you see a growth in digital lending? Which side of the equation would you say is heavier right now?
Simon Loong: COVID-19 is a particularly challenging situation for not just the FinTech industry but also humankind. And, every single industry, be it banking or FinTech is being affected.
Concerning lending, offline lending has been completely disrupted. What we are doing right now is we have greatly tightened the credit criteria; we are more cautious about lending. We want to see how the economy, the employment rate, and everything else will play out.
In Hong Kong, we are more confident about our credit model. We are still trying to grow that market. If we compare March 2020 to March 2019, our online applications increased by around 36%. So, there is a massive uptake in terms of online applications, and that is pretty good.
The next market that we are still observing – and we think will change a bit structurally – is Indonesia. We see that volume is getting impacted too. We are also more conservative because the credit infrastructure seems to be developing. However, thankfully, we have a very strong partner in Astra. We are trying to leverage its infrastructure to see how we can find opportunities in this difficult time.
Syed Musheer Ahmed: You have a team that is spread across three markets effectively. One being mainland China where you have a big customer base and a big team in Guangzhou and Shenzhen. You have a team in Indonesia and Hong Kong. With COVID-19’s effects being in play from January, how has the team reacted? What’s the business continuity planning (BCP) been like? What has the team structure been like, especially considering you have been building a new bank? How have you handled compliance and related aspects? These are questions from a team perspective. The second set of questions would be: How have you changed your leadership style? Have you been speaking to people more, organizing more team meetings, etc.?
Simon Loong: This is an interesting set of questions. I think the strength of a fast-growing company is its agility and ability to adapt. We always talk about the survival of the fittest and the survival of the most agile. The COVID-19 outbreak happened in China around December 2019. The lockdown hit us by surprise.
In Hong Kong, we announced a work-from-home policy right after the government encouraged everyone to work from home. We were quite fortunate that the staff in Hong Kong – almost 100% of us – use laptops. So, we were able to go back to the office, grab our laptop, go back home, and work quite efficiently.
We knew that the China team was supposed to start working from home in less than a week after the Hong Kong team did. With the experience we gained from Hong Kong, we were better prepared to implement the work-from-home policy for the China team quickly.
So, what we have learned is that the tech-savviness of the staff and the mental readiness of the organization is the key to a successful work-from-home policy.
We took a few steps while implementing the work-from-home policy:
This transcript has been edited for clarity and brevity. To watch the full discussion, follow the link to our MEDICI Studio here.