Jay:  This week’s show guest is YT Siew. YT founded Jirnexu in 2012 and grew it from a two-man startup in Malaysia to becoming Southeast Asia’s first full-stack fintech and finserve company building anytime-anywhere customer acquisition and lifecycle management solutions to banks and insurers. YT, welcome to the show.

YT:  Hi, Jay. Thank you so much for having me.

Jay:  It’s a pleasure to have you on. For the audience listening in and tuning in from around the world, maybe you could give us a little bit of introduction of yourself and how you became an entrepreneur.

YT:  Sure. I started my career, unfortunately, in investment banking, like many people around my age.

Jay:  Don’t we all start there.

YT:  Yeah. It was about 12 years ago. At the time, I remember everybody coming out of college either went to consulting, banking, or some kind of MNC (multinational corporation). So I went into banking, spent around three years there as an investment banking analyst. I was very lucky to get an opportunity to join a hedge fund. This was in 2007. So literally, six months after I left the bank, the financial world started to fall apart. I had already had a front-row seat to all of this because I ended up becoming the bank’s analyst at a hedge fund called Kynikos. They are one of the world’s largest short-only hedge funds.

Jay:  Jim Chanos, right?

YT:  Correct. It’s a module you’re familiar with. It was really one of the most interesting times in my career but also scary because from 2007 to 2010, I saw a lot of banks disappear, but I’ve kind of retained this deep interest in banks and the financial system.

I decided to come back to Malaysia at the start of 2010. It was partly a personal call. My son was born at the end of 2009. I’m Malaysian; my wife’s Canadian, and we thought it would be nice he could grow up with some grandparents around. So we decided to move back to Malaysia. And also, personally, having been a professional for six years, I always wanted to go home and see what it was like to live and work in Malaysia. I left when I was 13. So it was 15 years away.

I came back and ended up working for a family business for a few years. It was an outdoor media business. I also have this deep fascination with how media has been disrupted by technology, but the wonderful thing about media is it’s almost impossible to disrupt. As long as people still travel and move around, there’s still a value in reaching those eyeballs when they’re moving around.

But it was when I came back to Malaysia in 2010, I had not lived there for 15 years, so I had to start my personal finances again from scratch. I think I still had my childhood bank account, but I had to open up a proper adult account. The whole experience was just bizarre to me because I had been in the UK as a professional for six years, and I could do everything online — whether I needed a credit card, a savings account, or insurance, I just went to MoneySuperMarket.com, selected the product that suited me best, and everything was done and dusted.

Fast-forward to Malaysia in 2010 or rewind to Malaysia in 2010, and it took me two hours to open up a bank account sitting in the branch. It still takes about two hours. It’s a fairly miserable experience. To get a credit card, I had to find an agent in a mall who filled out the form for me, take a copy of my identity documents. And then for car insurance, I also needed to find an agent, the same agent that was servicing my family. And even when I went online to try to find information to see if I could get a better car insurance price or find a better car to suit my needs, in 2010, it was pretty much impossible.

So just selfishly, as a consumer, I felt that there was an opportunity here to provide a better service, but I just landed on the ground. I didn’t think it was wise to get back home and start a business from scratch.

Now fast-forward to 2012. That’s when Rocket Internet hit. They were just starting their real push into Southeast Asia with Groupon, Lazada, Zalora. It was interesting. I don’t know what Hong Kong was like, but in Malaysia, you could really see the impact that Rocket was having.

In 2010, I always joked that people only did two things online, only bought two things online. That was AirAsia flights and cinema tickets. In 2012, you started to see all demographics buying off Groupon, all demographics buying off Lazada and Zalora, just because the value was so compelling. And even until today, I think that’s a key kind of indicator of whether our business, our online financial comparison, will work in a market, because if people don’t trust basic e-commerce transactions, I don’t think they’re going to trust financial transactions online. So that’s my background and how I got started.

Jay:  It’s fascinating. I’m particularly intrigued because we share very similar backgrounds. I was a Wall Street guy. I worked in New York on Wall Street for a while and also here in Hong Kong. I currently actually work at a hedge fund, so I’m well familiar with your sort of background, but I’m always fascinated to hear about how people come out from industry, whether it’s banking or working for a corporate and just decide to become an entrepreneur. It sounds like it was almost a personal experience, a personal pain point that you experienced when you came back, moved back, that made you realize that this is a huge opportunity for me to attack, basically. So that’s pretty cool. Thanks for sharing your background.

In the time leading up to when you decided, “Okay, I’m going to do this. I’m going to start my own company,” you said you were working for a media company. Were you tinkering around with the idea at the same time and doing some market research and this sort of thing? What was the catalyst that made you, in 2012, be like “I’m going to do this”?

YT:  That’s a good question. Market research is a tough one, and I say that sitting on the other side having done this for six years and looking into moving into new markets. At the time, did I sit there and do a whole load of research? Not really. It was more a case of having… I never intended to join that family media business. It was more of a stopgap. And after two and a half years, I thought…if you look at outdoor media, it’s really just about acquiring assets and selling the assets. There’s not a lot of value add you can bring.

But what was really interesting is when I looked at, I suppose the technology space or the online media space in 2012 in Malaysia, it was so nascent. There were so few startups. There were so few people you could go to for advice on how to start a technology business. There was practically no one investing in the space, so practically no online startups. So when I thought about what I wanted for my career over the next 10-plus years, did I want to build a career in traditional media and outdoor media, or did I want to have a go at… At the time, it wasn’t fintech. No one would be talking about fintech in 2012, but it was, did I want to have a go at online financial services? So I chose the latter. So it was more of a personal call.

It’s really tough. I talk to different people today who are still sitting in a job and asking, “What’s the catalyst to leave?” And it’s, can you do the market research to prove that it’s the best time? I think probably not. If you’ve been on the buy side, it’s almost important to time the market for fundamentals. I would say it’s probably better to be early than late, as long as you can afford it because when you’re late, it’s just really expensive to try and catch up. Whereas if you’re early, you can kind of control your burn.

But it was really more of a personal call and also looking at where Malaysians were. Again, in 2011, who was transacting online? Really nobody. But in 2012, you suddenly saw… I always use my mother as a great kind of bellwether. She started ordering on Groupon. It’s really fascinating because I look at when she was booking stuff online… What does she use? I think it was Bookings.com. “Oh, you know, they’re giving me points, and they give me better rates than the other sites. They’re rewarding me for being a loyal user.” And if customer service is bad, she’ll highlight it, and she’ll talk about how quickly they responded or not. But I think she’s a nice kind of bellwether of an average customer online and how important it is to build that loyalty, customer service.

But in 2012, I could see that she was buying off Groupon and some other sites. So I’m like, something is changing here. This wasn’t happening…

Jay:  That’s pretty interesting. It’s interesting when you observe trends like that. You just mentioned you were observing your mother’s behavior, which I can relate to because it’s oftentimes not the people at the forefront but it’s the ancillary users that you don’t actually think to go to first for market research. A lot of times — I’m from the States — and a lot of times, from the US, if you just sit around and you watch and observe teenagers and what apps their downloading and this sort of thing, it kind of gives you a good idea of where the next trends are coming. So that’s pretty cool.

So let’s dig into your company, Jirnexu. I know that you had gone… Now it seems like quite a large, almost conglomerate with multiple different business lines. So can you walk us through how it first started — what was the initial business that you launched and how it’s evolved to the giant that it is today?

YT:  That’s very kind. It’s still very much a startup. In 2012, I look back, and I say I had an overly romantic and naive vision, which is, I just want to build the MoneySuperMarket of, first, Malaysia and then Southeast Asia. What that meant was just building the kind of traditional price comparison and online financial comparison model where consumers come to the website, select the product they want, but when they click “apply” or “buy,” we’d send them out to the bank or insurance company.

We did that for most of 2013, and the experience was just, frankly, miserable. But it was miserable because consumers were… We were sending customers to bank and insurance company websites, and they just weren’t being followed up on. They would leave their information. They would drop a lead, so they would leave their information on the bank website. And that’s where the problem starts. Now that information would usually end up in an Excel sheet, it would be distributed to a call center, and everything was managed manually. Even if the call center rep did call you, they would send you a PDF form, ask you to print it out, fill it out, and send it back.

Jay:  So it’s like the financial institutions were dropping the ball.

YT:  Yeah. It’s tricky because you’re trying to test this new channel, this digital channel, and they didn’t necessarily want to invest a whole lot of money into building lead-management systems and integrating with the call center. So they were using associates, and they, arguably… In our experience, the call centers probably weren’t adequately staffed enough, so they didn’t have enough sales people. Again, they were trying to manage their costs.

So the call center sales people would naturally just call the freshest leads every day. So if they couldn’t call you on day one, they probably would forget to call you on day two and day three because there’s no kind of CRM to manage it. Customers would just kind of disappear.

Jay:  Interesting.

YT:  And this still happens all over in emerging markets because it’s pretty expensive for a bank to purchase any kind of software. They can’t buy [inaudible] solutions because they’re heavily regulated. They have to buy something on premise, and as soon as you buy something on premise, it becomes very expensive. And they typically also try and buy things that can scale. They’re pretty tough on banks to have an MVP product.

So the consumers were just having a bad experience. They come to our website, we’d send them to a bank website, and sometimes they were called, sometimes they weren’t. And even if they were called, they would have a terrible experience. So imagine going to an e-commerce site and not being able to guy the product but being sent to another website, indicating interest, and waiting for someone to call you back. If that was the case and e-commerce just went scale, and that’s exactly where we were in 2013.

From a user experience, it was miserable. From a business perspective, it was miserable because we weren’t able to get paid very much because the banks would say, “Well, you’re not really delivering customers.”

And we’d tell them, “According the customers…” That’s not very constructive. It’s not a very constructive relationship.

So come to the end of 2013 and 2014, the founders got together and said, just the pure comparison business isn’t really scaling. So it doesn’t seem like there’s much point in continuing if we’re just going to do that. Why don’t we try and solve… It’s not a very sexy problem, but why don’t we try and solve the basic problem of making sure customers can actually get the product they want online.

So if you come to our website and select a product, how do we make sure that you actually get that product you want? That’s really all we’ve been focusing ever sense, and it’s still what we’re focusing on today. We solved that by building out the technology platform and providing the services for the platform which allows the customer to come to our website, select a product, go through the entire application or transaction process, which we control. So we don’t hand over the customer to the bank or insurance company until they’ve essentially finished the process. And for the insurance company, now we can transact, so they don’t get involved at all. But for a bank, they only take over for my KYC checks or for credit processing.

The key there is really taking responsibility for the customer journey and customer experience. And instead of trying to address it with people — for example, building large call centers or agent forces, we’ve addressed it with technology. So for consumers it was all about providing anytime-anywhere access to financial services. And then for the banks or insurances companies, it was… The business is essentially a digital sales channel. Or the all the services we provide is a digital sales channel.

Jay:  It’s pretty interesting. I’m just curious as to how did you actually…how were you able to bring that… It’s almost like the onboarding process of the customer. How were you actually able to bring that in house? Let’s say you have a bank, an insurance company — two or three different counterparties — did you actually have to go to each one of them and basically explain your business model and say, “Look, we’ll take this work load off your hands. We’ll do everything here. What do you guys need?” It sounds like a lot of work. Right?

YT:  It is. How did we do that? Exactly what you just said, which is we had to knock on every door one by one and explain to them. So on paper, it seems like a no-brainer to a bank. When we talk to an outside, someone from outside the financial services industry, and you explain what we do, which is we’re going to go to the bank, and we’re going to ask the bank to outsource the customer onboarding to us. So instead of the bank having to deal with fixed costs of people, technology, etc., they could just work with us and pay us on a variable cost base and, ultimately, the bank is still responsible for the credit processing, risk assessment. So no skin off their nose. Right?

That’s true. The business teams absolutely buy into that. But ultimately, banks being banks, being heavily regulated, which is fair and the right thing, I believe, it is very difficult for a bank to outsource any process. So going from that first pitch — what I just described — to going live with a bank on a full-digital onboarding, which includes some kind of, say, integration, can be a two-year process. It’s pretty hard to shorten that process. It can actually be longer.

On the insurance side, it’s interesting. On the insurance side, it’s more — and I think it’s true in other markets. It’s generally true that for insurance, there are more regulations around distribution because the insurance company is trusting you to sell the product, and you’re taking money off the customer. Whereas with credit, the risk assessment still sits with the bank.

So for insurance, we had to first find the right regulatory framework or look for the right regulatory framework, which at first did not exist. Then we entered the regulatory sandbox in Malaysia, where we go approval almost a year ago now. So on the insurance side, it was more of a regulatory hurdle. On the banking side, it was more, I would say, like a compliance, risk, and regulatory hurdle which we had to cross.

Jay:  It sounds like you’ve crossed a lot of hurdles. I feel like every time I meet someone that is doing fintech — whether it’s a trading app or just a solution like you’re providing — I just feel like there’s so much red tape that you have to go through, especially with banks, like you mentioned, just to get anything done. I just look at my personal account at HSBC, and they just never bend the rules. So for someone like yourself to come up with a new concept, it must have just been like pulling teeth trying to get these people to understand it and get it actually approved.

YT:  Yeah. Understanding and seeing the benefits, the buy-in is pretty quick. I suppose if you put yourself in the bank’s shoes, they need to make sure that they behave… They’re essentially regulated to be like a utility. So every morning, you wake up, you turn on the tap, you expect water to come out. So every day, when you want to logon to your bank, you expect to be able to get access to your money. So as a result, any institution that takes deposits is heavily, heavily regulated and rightly so. I still haven’t forgotten seeing an actual run on a bank when Northern Rock in the UK had to be rescued. It was 2007. There were people queueing up, and they could not withdrawal their money. And that still happens around the world.

So you can understand why banks are like that. But my takeaways from the last six years, looking back, I suppose a key question is, what would you do differently? Would you do this again? For people looking at fintech today, I’d say, “Look, you’ve got to make a decision of whether you want to work with a bank or insurance company or whether you want to work against them.”

At the time, we didn’t have the luxury of being able to raise enough money to compete with a bank. Very few people do still. So we decided to work for the banks or work with the banks as a service provider. But that’s a really key distinction. For example, the guys going into P2P online lending is completely different. You don’t need to deal with any red tape, but you take on your that risk yourself as a manufacturer.

Jay:  Very interesting. So, YT, this is one part of your business, and I know that you mentioned you were using, basically, the internet. I know you guys do a lot of things with mobile because that’s where the majority of people access the internet. So you’re using the leverage of the internet and mobile technology to proliferate your business. In my introduction, I said that your company was Southeast Asia’s first full-stack fintech and finserve company. So maybe you can explain that because I know that there’s other lines of your business that you’re building out apart from this e-commerce for personal finance platform.

YT:  That’s correct.  By full-stack, what I’m really referring to is taking the customer through their entire journey — right from the first impression online through to getting the product. Now the core of the business today is still runs off the marketplace, essentially becoming like a digital distribution channel. But what we’re launching early next year, what we technically soft-launched this year internally, is white labeling our platform. We get a lot of requests from clients — both within financial services but also outside — who see the value of having the platform that can manage large volumes of customers efficiently through complex funnels.

So if you think about traditional e-commerce, there’s tons of companies which provide white label technology platforms, which allow you to upload products, manage your website, take them to the payment, and manage the shipping. But as soon as you have any kind of complexity in that process — for example, you have to collect customer information, you need to risk-assess the customer, when you collect the customer information, if it requires follow up after with document upload — there are no off-the-shelf platforms for that. We should do it at scale. And that’s where we see the demand for the platform. The white label platform will cover both financial services and non-financial services, as it’s general FMCG, travel, etc.

The pros and cons, when you look at financial services, you need to be an on-premise solution, whereas if you look at other high-value products and complex products — say property, automobiles, travel, etc. — not regulated, so we can sell it as a white label.

Jay:  That’s pretty interesting. I know that you guys recently closed a pretty sizable funding round, Series B. Is that right? I imagine this is part of the roll out for your plan, is to use that funding to further move this side of the business along. Is that right?

YT:  Actually, that doesn’t need a whole load of capital. When you look at the pure technology businesses, a lot of time, a lot of investment has to go, typically, upfront to build the platform. One of the reasons why we like this business is because all the investment on the product development has already been done. We already have, essentially, the pilot customer, which is our own platform, and it’s been a very robust testing period because we’ve had to provide the services actually for financial services. So that doesn’t actually need a whole load of capital.

Jay:  Gotcha. Let’s just quickly run through the customer experience. If I’m using your platform, what are the various banks or insurances policies or whatever that I can access off your platform? What is the process by which I use it? How easy is it to use, for me to access, say, a line of credit or an insurance policy? And then, what is your revenue model there? And how do you guys make money?

YT:  Sure. Before I forget, I’ll answer the last question first. The revenue model is just like any kind of marketplace. We are paid on a success basis. So we’re paid for every approved customer or a percentage of the loan or insurance policy. So that’s the business model.

Coming back to the user experience, when you come to our website, you browse the product. Say it’s a credit card, a personal loan, car insurance… Now if you select a product where the bank or insurance company has engaged us on the express supply model, which is the digital straight through, it moves into a chatbot experience. We decided to build, launch our own chatbot at the end of last year.

The reason for this is because in Malaysia, we saw that mobile traffic, as a percentage of overall traffic, had grown from roughly 50-50 when we first started to closer to like 80-20. No matter how responsive you try to make a website, the user experience is never quite perfect. From what you can see in markets like Malaysia, consumers just love to chat. So we believe that both from the user experience but also from a user engagement model at the time, a chatbot was the way forward. So we built our own chatbot and launched it last year. So we went from having one bank till now we’ve 11 bank and insurance companies using that. And soon the entire website will switch to a chatbot interface for customers, for product application.

What this means for the consumer is once you’ve selected a product, instead of having to deal with online forms, the entire experience is just a chat. It’s just an AI-powered chat. So whether it’s a credit card or personal loan or motor insurance, you can go through the entire process straight from the chatbot. So in motor insurance, you can even transact the payment through the chatbot.

On the credit side, soon we will… At the moment, I think there are still some process where the upload is done. Typically we do it via email, but soon we’ll have the full upload done through the chatbot as well. For the consumer, it really will be a straight through process.

The other beautiful thing about the chatbot is that it’s an engine, so it can sit behind any other chat platform that has an API. Pretty much in any Southeast Asian market, there are leading…it’s some kind of leading chat platform. And right now, almost all of them have an API that’s open.

So the really cool thing about the chatbot, which we didn’t realize, I suppose, until after we launched it is if you’ve ever had to train salespeople… You can train them all you want, but the tricky part is you never know what is it the sales person says where the customer switches off. But the really cool thing about the chatbot is you can see it on a live basis every day. You can actually see at which question are users stopping. You can look at your conversion rate on a question-by-question basis. So it’s almost like we’re able to train our sales team on a live basis on any individual question.

And from the consumer’s point of view, they’ve got this entirely seamless chat-based experience.

Jay:  That’s amazing.

YT:  Yeah, from day one, it’s always a bit tricky because if it’s a new product and we’ve not tested it before, it can take a couple of weeks to optimize. But usually after three to four weeks, what we saw is that conversion rates on the frontend go up and HR productivity on the backend goes up as well because more of the process is handled by the AI.

Jay:  That’s incredible. I think you’re really on the right track there because I just think about myself, personally. Anything that I have to fill out a form, I hate doing. Any customer experience type thing, I want to talk to someone, but I don’t want to call them. I just want to chat with them. You want to feel like you’re talking to someone, but you don’t want to be on the phone waiting, blah, blah, blah. Right? So the chat is the perfect way. And if you can basically apply and even upload documents and this sort of thing and make payments, that’s brilliant. I think that’s really the way forward.

YT:  Yeah, and the best part or one of the most important parts for us is the fact that it’s mobile first. It doesn’t matter what size your screen is. A chat interface is always going to work.

Jay:  That’s awesome. YT, it’s been great hearing about your company. I want to look to wrap up here, but I have just a couple more questions before we go. First of all, Jirnexu, it’s a very unique name. I want to ask you what does it mean? Where does it come from? And then after that, maybe you can tell us a little bit about your future plans. Looking forward to the rest of this year, next year. Are there other markets that you want to try to tackle? And how are you going to move forward?

YT:  Sure. Jirnexu means prosperity. The original spelling has two Xs, but we took it out for simplicity. So it means prosperity in Maltese. We chose it because it had a dot-com but really for the… I know. Right? It’s less and less important nowadays. But it very much aligns with why we do what we do. Why should we bother trying to make a financial product anytime, anywhere? It’s so that people can find the best products for their needs whilst gaining value from their financial services.

In terms of our priorities, it’s really just more of the same. I suppose the easiest way to think about this is how do we keep chipping away at that goal of providing or enabling customers to get the best products for their needs — anytime, anywhere? A lot of that is just about improving choice — so getting more of the existing banks and insurance companies online — but also continuing to work with them to improve the service to the customer. Again, we’re not a manufacturer. We’re just a panel and a technology provider. So how can we… What else can we do to convince banks and insurance companies to improve their processes, to upgrade their systems so that customers can have an even better experience?

We are looking to continue the regional expansion. I can’t share too much about which markets right this second, but there are still opportunities to do what we do in the rest of Southeast Asia.

Jay:  Fantastic. I’m looking forward to hearing different countries that your product is available in. Last two questions I have for you, YT, and thanks again for your time and sharing with us your journey and this sort of thing.

The second-to-last question, which I like to ask all entrepreneurs and very relevant to my audience – a lot of them are finance professionals as well — if there is a piece of advice that you could give to maybe someone that is working at a bank right now and might want to spring out and do their own thing or try their hand at entrepreneurship, what piece of advice could you give?

YT:  I really don’t like giving advice, but I suppose when I look back at my experience, what’s the most important thing? What do I spend the most time on now? It’s about people. People and reputation of us — I have the luxury of sharing two things right now. On the people side, I was in finance for six years. Culture is never quite the most important thing. It’s very much the case that people are paid to do their jobs. They’re paid very well to do their jobs. And people do their jobs.

But when you leave the finance world — and especially in startups — to the best people in the market, chances are you’re not going to be able to pay them more than the next guy or the next startup. So why should they join you? And that’s very much to do with the culture of the company, the vision. Why should they stay with you? Again, it’s all about culture. It’s all about making sure that their personal goals are aligned with the business goals.

And the second one is reputation, especially for a fintech that provides services to regulated entities. The startup mantra is fail fast and fail often. But when you’re providing services to a bank or insurance company, you never want to fail. Failure is not an option. They really do value a partner who is consistent and who is there and who they can trust. But that does kind of change some of the dynamics of the relationship.

Jay:  Right. Totally. I think those are both very good pieces of advice, I think, particularly on your second point. The world is getting smaller and smaller because of the internet and this sort of thing, so your reputation, it matters. It’s always good to do right by your customers and your counterparties. So I think that that’s very sound advice.

Last question, YT, is where is the best place that people can find you follow you, connect with you, maybe learn a little bit more about Jirnexu?

YT:  Probably LinkedIn for me, to be honest. Not much of a Twitter user, so if you just search my full name on LinkedIn… Actually, I think you can search me at YT Siew.

Jay:  We’ll have it linked up in the show notes and stuff for the audience. Great. Well, thanks so much for the time, YT. It’s been very interesting learning about your company, and I think… I love the idea, and I’m excited to see your growth. And we wish you the best of luck in expanding your company and all the success.

YT:  Thank you. It was a right pleasure. So thank you very much for your time.

Jay:  Great. Thanks a lot. Take care.