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Seunghyun Cho (Joe) Chairman

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WHAT IS FINTECH?

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AGENDA1. What is Fintech?

a. Ecosystemb. Categoriesc. Investments

2. Global Industry Trendsa. Global investmentsb. M&Asc. IPOs

3. Why Asia Now?a. Mobile Technologyb. Unbanked Populationc. Underserved

Population + SMEsd. Fragmented Marketse. Government Support

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In the pastFinancial technology were developed bylarge financial institutionsBig-scale + Complex +Difficult to Use + Highly Regulated

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Financial Technology

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ATMs

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Post Financial CrisisFinancial institutions’ wallets tightened, Employees jumped off the ship

Fintech StartupsKick Started

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This Marks The Beginning‘Birth’ of fintech

‘Death’ of financial technology

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TransformationMobility of technologyMobility of ideasMobility of payments

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Common themesacross fintech sector

Monetisation of dataFraud and identity protectionInfrastructure replacementDisintermediation

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Fintech Main Themes 1. Payments

Apple, Google, Paypal, Amazon, and Alibaba have

payment solutions that replace physical wallets and

credit cards

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Fintech Main Themes 2. Lending

Zopa, Lending Club, and Funding Circle offer peer-to-peer lending solutions that

match lenders and borrowers on their online platforms

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Fintech Main Themes 3. Investment

“Robo-advisers” like WealthFront use data

analytics to dispense online personal financial advice and

investment management services.

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Traditional vs Emergent FintechTraditional Emergent

Positioning

Market players generally perceived as facilitators which are large, incumbent technology vendors supporting the financial services sectorEg: Fiserv, SunGard, Infosys, First Data

Market players are disruptors and innovators by nature. They are disintermediating incumbent financial services or provide new technology solutions to service existing needsEg: Zopa, Fidor Bank, Transferwise

Infrastructure

Companies focus on support, maintenance and provision of existing infrastructure

Two operating models have merged of either utilising existing infrastructure which tends to be controlled by established players or by replacing them completely

This is a high risk strategy but provides high returns if successful

Revenue model

Operate under established revenue models that tend to use cost per transaction, percentage of assets or license fees

Emerging revenue models are broad and tend to function using different types of revenue streams.

Source: EY Landscaping UK Fintech

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Big Fintech TrendsDigital & Mobile PaymentsAuthentication & BiometricsBlockchainCloud ComputingBig DataLearning Machines

Private and Confidential | All Rights Reserved 2015Source: http://programme.innovatefinance.com/e/bigdata

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Loans & Consumer Credit

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P2B & B2B Finance

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Payments & Transfers

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Facebook

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Wealth Management1.Personally tailored portfolios and

diversified investment plans 2.Clean user interface 3.Online platforms and processes to

make opening accounts fast and easy 4.Smart Phone apps 5.Interactive knowledge sharing

platforms6.Low fees and incredible transparency

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Open API Platform

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US Fintech Takes The Lead

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2014 USA

$9.89 B

Global fintech investments tripled,now more than $12 B

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Fintech Investments

Source: CB Insights

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Fintech Exits

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$18.9 B

We have seen 192fintech M&A deals in 2015 so far

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18 IPOs

$4.9 B

IPO < M&A

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2014 Fintech IPOsInsurance/Healthcare Fintech led the way with 6 IPOs

No companies reported positive net income in 2014

8 Fintech companies achieved ‘unicorn’ states with market cap > $1 B

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2014 UK Fintech Revenue:£20 B

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• WHY ASIA NOW?

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Unbanked

Why Asia?Why Now?

UnderservedFragmented Markets

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1. Widespread use of mobile 2. Mobile tech infrastructure in

place

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Mobile Phone

Mobile Internet

Singapore 152% 65%Indonesia 121% 21%

South Korea

109% 63%

India 75% 16%Philippines 113% 32%Malaysia 137% 54%Thailand 150% 40%

China 95% 42%Japan 123% 34%

Myanmar 26% 7%

Very high mobile phone penetration+ growing mobile internet penetration

Source: GSMA Intelligence 2014

Asia:• High mobile

penetration• Young population• High adoption rates

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2014 Mobile Internet & Projections

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Unbanked PopulationGlobal Unbanked 2.5 B

Indian transactions still 95% cash

More than half of the world’sunbanked come from Asia

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SMEsToo small for big banks Too big a segmentto be ignored

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India

Malaysia

Thailand

Singapore

South Korea

Japan

Indonesia

China

0% 10% 20% 30% 40% 50% 60% 70%

9%

33%

37%

50%

50%

53%

57%

59%

SME to GDP Ratio (%)

SMEs in Asia are underserved

Source: Asia Development Bank 2013

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SMEs

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Fragmented MarketsDespite Asia’s potential,there is no one solution

Financial services andmarkets growing atdifferent rates across Asia

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Fragmented no more…

The rise of micro markets

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>>B2B Markets & Micro Markets

Example:China leads the way

Opportunities

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Government Policies‘Bad Cop, Good Cop’

Big boys are squeezedBut approves new players, new rules

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Tremendous government support for fintech

Positive regulatoryframeworks

Financial grants + schemes

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Government // Financial

Singapore MASS$225 million over 5 yearsKorea Development Bank and Industrial Bank of Korea 200 billion won (US$185 million)

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Government // Regulations Thai SEC now allows SMEs to raise funds via crowd-funding portals

Malaysia SC announces 6 approved equity crowd-funding platforms

Korea FSC allows banks to fund fintech firms//Internet banks allowed

Philippines GPH launched e-peso(single e-payment platform)

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Government // Programmes Singapore MAS Fintech & Innovation Group, FTIG

Hong Kong Internet Finance Council, HKIFC, was set to promote fintech in HK

Fintech development at the top of Korea’s governmental agenda

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ASIAN OPPORTUNITIES

Wealth management

Big data

Peer-to-Peer (P2P),Peer-to-Business

(P2B)

Mobile paymentsSocial

Trading

Insurance

Capital raising

Internet bank

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MARVELSTONE PLAN

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FundEastA fintech platform

Focusing on Asian markets, it combines different segments under one umbrella to form a financial group

The structure allows the development of new brands to grow and thrive

Its competitive edge lies in its ability to structure financial products in both traditional and alternative investment spaces

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