Simon Loong, Founder and Group CEO of Hong Kong fintech platform WeLab, has his eyes set on Southeast Asia.
WeLab has already ventured into Mainland China and Indonesia with different fintech services after making its debut 11 years ago in Hong Kong as WeLend, a digital consumer credit offering.
Mr Loong wants to use that commercial and technical experience – plus capital from WeLab’s Hong Kong operations, to diversify revenues and accelerate growth in dynamic Southeast Asia markets.
The two main priorities for expansion in Southeast Asia are digital banking, eyeing the region’s large underbanked and unbanked segments, and enterprise solutions, helping traditional financial institutions upgrade their digital capabilities.
The fintech platform is also exploring opportunities in digital consumer financing, the company’s core business since its inception.
“We’ve identified a few markets on our radar, namely the Philippines, Thailand and Vietnam, in addition to Indonesia,” Mr Loong said, speaking in an interview with Hong Kong Means Business.
“These are markets with fast-growing economies and a large, young tech-savvy population.”
WeLab has already made an exploratory foray into Thailand, partnering with Lightnet, a local fintech powerhouse, to bid for one of the Kingdom’s first digital bank licenses.
It’s a partnership model that has worked well in Indonesia, where WeLab runs a digital bank and a separate digital lending service in partnership with Astra International, a local conglomerate controlled by Jardine Matheson.
Bank Saqu, the digital bank, has been especially successful, gaining 1 million customers within six months after launching in November 2023. Bank Saqu’s customer acquisition costs were 50% lower than first expected.
Prior experience can save costs and speed up market entry, when launching in new markets, Mr Loong pointed out.
WeLab’s first digital bank, in Hong Kong, took around 18 months to build. Bank Saqu, by comparison, took six months.
“We had built most of it in Hong Kong already,” Mr Loong explained. “We just have to localise it. The time to market is shorter, which saves a lot of money.”
Mr Loong also sees opportunities in Southeast Asia to roll out WeLab’s B2B services, which the company currently provides in Mainland China through Tianmian Tech, its Shenzhen-based business unit specialising in enterprise solutions, has more than 700 corporate customers.
These services tend to focus on specific areas, such as, data analysis and fraud detection, one of WeLab’s core technologies.
“There’s a lot of technical know-how that we’ve built over the last decade, and it’s proven technology,” Mr Loong said. “Historically, we have given out US$15 billion of loans.”
Mr Loong first started thinking seriously about ASEAN markets in 2016, when Khazanah, Malaysia’s sovereign wealth fund, backed WeLab as the lead investor in a funding round.
He has been busy cultivating business networks and connections in the region ever since.
Mr Loong also joined recent ASEAN missions led by the Hong Kong SAR Chief Executive John Lee and organised by the Hong Kong SAR Government and the Hong Kong Trade Development Council, visiting Singapore, Indonesia and Malaysia in 2023 as well as Laos, Cambodia and Vietnam in July and August.
Mr Loong was able to develop some strong ties and ongoing relationships with the companies he met during these missions.
“They were looking for know-how in fintech, but they didn’t know where to look,” Mr Loong said. “We had extra credibility because we were part of the delegation and were able to build trust a lot faster.”
Fintech companies from Hong Kong have some notable advantages when expanding overseas, Mr Loong said, thanks to the city’s access to financial talent and capital markets as well as its international outlook.
The opportunity to disrupt financial services – digital banking, in particular – largely depends on the number of incumbent banks and population size, Mr Loong explained.
There are only three digital banks in Vietnam and none in Cambodia and Laos, representing a greenfield opportunity compared with many other ASEAN markets.
Hong Kong was also an early mover in digital banking compared with Southeast Asia, giving Hong Kong players a head start, when launching digital banks elsewhere.
“It’s even more difficult for a local player who’s never done it before,” Mr Loong said. “This is an area, where Hong Kong definitely has a competitive advantage.”