Access to financial services in emerging markets is inefficient. The traditional banking and insurance sector is tied to expensive branch and agent-based distribution networks, and is generally ill-equipped to maximise the use of newer digital channels. Established banks focus on a limited section of the population and have excluded, or provided poor choices to, many. As incomes rise and online access increases, more people demand better financial services. Technology can help solve both issues – making distribution more efficient for traditional banks and insurers, and enabling the creation of new financial products and, in some cases, new providers.
Across the region, a US$30B market opportunity exists in the distribution of banking and insurance products from traditional financial institutions. In the more developed and affluent parts of Southeast Asia, namely Singapore, Thailand, and Malaysia, multiple financial products are promoted, consumer debt levels have risen quickly, and households tend to have multiple financial products. From the consumer’s point of view, banks are often still opaque when marketing their offerings and the insurance industry has barely started its transition to digital distribution. The regional opportunity is larger – 150M adults in Southeast Asia can be considered under-banked, and insurance penetration is up to 90% below developed market standards.
Based on the experience of other emerging markets, notably India (e.g. BankBazaar) and Russia (e.g. SravniSam), we expect the early stages in the development of digital financial services to be platforms that help banks and insurers manage digital distribution. Currently in Southeast Asia, few banks have sophisticated online marketing capabilities or comprehensive workflow systems that integrate their digital marketing, call centre, scoring / assessment and other efforts up to and including debt collection and other post-sale activities into a scalable, efficient process. This alone is a sizeable opportunity to but also leads to the opportunity, in due course, to supplement traditional products by capturing a superior set of consumer data and using it to build better products and services.
Jirnexu originally began as an online financial services aggregator, but has developed into an end-to-end solution for financial service providers, managing the process of customer acquisition from awareness building, through application processing to customer support. Its consumer solutions handle lead generation and application processing, through the Company’s consumer sites RinggitPlus.com in Malaysia and KreditGogo.com in Indonesia. Its B2B solutions are XpressApply, a hosted application processing process for the bank, and SORA, a specialised workflow management platform. Across the mix of business models, Jirnexu collects deep customer data sets in order to better understand demand for financial products.
The results are impressive. In a competitive market, Jirnexu has become a clear leader in Malaysia and has established a strong presence in its second market of Indonesia. To date, it has helped issue 40,000 credit cards, open 50,000 savings accounts, and disburse $30M of personal loans.
Jirnexu’s vision is to enable any customer in Southeast Asia to get any financial product they require. Matching customers to existing financial products is just the start, the ambition is to help those in the region who are currently under-banked or insured access suitable products. Cento Ventures is delighted to lead the company’s US$4.5M Series A funding round alongside NTT Docomo, Celebes Capital, Gobi Ventures, OSK and a number of influential angel investors from around Southeast Asia, many of whom have interests in the financial services industry.
The team of six founders have impressed us with their ability to understand the requirements of their markets and build products that solve the real problems that are present. The company already works with most of the large banks and insurers in Malaysia, and we are happy to support them as they continue to build on their strengths in Malaysia and beyond.
Khor Chieh Suang and Ada Yeo lead the investment from Cento Ventures, and will provide support and guidance on regional expansion and capital trajectory. Given the deep financial services experience amongst the pool of other investors, an advisory board will also be created to guide the company in operational matters, navigating industry regulation, and building the company into a regional leader.