Monday, 28 November 2022

OneConnect’s Tan: “Banks continue to struggle to implement DLT”

5 min read

By Foo Boon Ping

In this conversation, OneConnect Chief Executive Officer (Southeast Asia) Tan Bin Ru talked about the limited use of distributed ledger technology, especially for banks, and the ongoing digital transformation in Southeast Asia’s financial industry.

Tan was already at the helm when OneConnect Financial Technology Company started in 2018. The Singaporean executive has had an impressive career history before she joined OneConnect as CEO (SEA). She was with Microsoft for five years and held central positions there: programme and customer operations director, customer partner and field director, and regional sales director. Before that, she was with Hewlett Packard for more than a decade and rose up the ranks from Asia Pacific and Japan operations manager to global process and capability director, and later to chief operating officer and alliance management director. At present, Tan is also a co-chair of Blockchain Association Singapore.


OneConnect is an associate company of Ping An Insurance (Group) in China, providing a number of technology solutions to financial institutions in Asia. Since its inception, OneConnect has expanded its services into nearly 20 countries and regions. In 2020, OneConnect developed OneSME, a cross-border digital platform for small and medium-sized enterprises (SMEs) in Singapore and China. Following that, it collaborated with Trustana, a cross-border business-to-business (B2B) marketplace founded by Temasek Holdings Limited to further grow the trade opportunities between the two countries, along with the other Southeast Asian countries. It is also currently working with the Singapore Exchange (SGX) to build an environmental, social and governance (ESG) platform and provide a faster compliance check of the companies listed on SGX.


The following key points were discussed:

The following is the edited transcript:

Foo Boon Ping (FBP): Give us a sense of what's happening around Southeast Asia in terms of the industry going through digital transformation? Financial players are really looking at their business model and technology stack but is this whole movement towards creating a new way to improve customer experience for the consumers? On the regulatory side, you have regulators that are looking at how innovation can create better customer experience but also improve access to financial services for more of the population. This whole financial inclusion in Southeast Asia is a good market for that when banking penetration is fairly low so there is regulatory impetus to get the industry to provide better services as well as to open up access by encouraging competition through the digital-only banks. There are some upstarts, new players with new technology but on the other hand, you also have incumbents that are looking at transforming their technology altogether. Now, OneConnect, you are a fairly new player in the technology space born out of a financial group. There’s a very strong history in technology with Ping An Group. But you are tackling this whole technology space quite differently from traditional vendors. Rather than looking at a specific solution, you're creating platform solutions.

Tan Bin Ru (TBR): Indeed, OneConnect is a slightly different fintech business compared to the rest. When we first started OneConnect in Singapore in 2018, I clearly didn’t understand my competitors in Southeast Asia. But within three months of looking around, we realised we're quite unique because we are the fintech arm of Ping An and Ping An being the size that it is in Greater Bay Area in China, that's a lot of things. So we hold all the financial institutions licensed end-to-end. We have 40 subsidiaries, therefore the technology that is incorporated into Ping An ranges from banking, insurance, asset management, investment, etc.

For OneConnect China, we try to commercialise everything because China's market is big. There are so many products in OneConnect China so we looked at what Southeast Asia needed. And you are right that despite the fact that we're the biggest insurer in China, Southeast Asia's immediate needs are the unbanked population. Therefore, digital banking licence was also very much in discussion so we went after the digital banking modules first because it takes time to localise that. There are actually two steps to do this. First, the solution comes up from Ping An. Second is you can't just commercialise what Ping An is using because Ping An is huge so you need to make it a little smaller and productise it further for the industry. Then the Singapore team further localised it into different languages, different currencies, etc. So there's quite a bit of work to choose from. If you chose the wrong product, you might end up localising a product that doesn't have a market.

This year, we started insurance. For the digital banking licenses, we've now ventured into a couple of countries and it's proven to be the right product at the right time. But it's also proven to have given us a different value proposition compared to many other fintechs out there that focus on a single-point solution. So if you remember the first digital banking licences issued by Hong Kong, the Hong Kong players had a lot of learnings with regard to choosing solutions in the bank. The first challenge they had was which fintech solution to use because there's so many out there.

FBP: Many of them are fintech themselves.

TBR: It's getting very popular now that banks want to set up their fintechs. This is a concept that Ping An started but OneConnect has been successful. So a lot of banks have reached out to us. They want to set up their own fintechs. They want to commercialise what they have. They want to service others.

China, for the longest time, has tried to be more international, to be successful outside of China, which is not easy for them. So OneConnect’s ability to service the others, we bring back international learnings. We criticise our own products. So it brings back a different value for the OneConnect China team. So a lot of banks are following the same footsteps so as to broaden their solutions. Many banks face the problems that their solutions are too customised for themselves. So they can't change it, they can't touch it. But I also looked at many banks that have set up their own fintech arm. I say that the devil is in the detail of how you support them. No bank that I've seen has provided support the way  Ping An has supported OneConnect, given how small we are compared to Ping An.

FBP: How do you see digital-only banks developing, especially in more mature developed markets? We are already seeing signs that many of those that got their licence are not operating. Wanting a licence versus getting a licence and operating it are two very different scenarios. Do mature markets need digital-only banks? Incumbent banks are already very strong and it's a matter of time before they become truly digital.

TBR: Globally, there's no proven sustainability of profitability model for the digital banks. It's a learning journey. But at the same time, it’s fairly early to say that we don't need a digital-only bank. We service pure, digital banks and we also service traditional banks that try to digitise. I can clearly tell you that the effort to digitise them is probably three times the effort to help a traditional bank. But of course, our strength is doing that because we don't want to do the banking business outside of China. So we pride ourselves in having the domain knowledge to help them out. I think the COVID-19 situation helped them out a little. But it's now dragging to its second year of economy downturn so that may not be a good thing. After all, I cannot initially kickstart adoption a little. In the second year, it's really coming down to a bit of a win, given that the economy is heavily impacted.

The Hong Kong digital banks have, unfortunately, a bad start. They started their licence in the midst of COVID-19 plus the political situation. It's going to take a while, but nevertheless, there’s 10 years or less history for digital banks. For the traditional banks to do what they are doing today, they have at least 100 years of history. It will be a blend of success in the end. It’s not whether you are fully digital or not. The one with deeper pockets will probably survive. Like in many industries, the ones with deeper pockets will have a high chance to be the winners. In between, while the digital banks are learning, the traditional banks are also catching up. We had many conversations since the COVID-19 lockdown started for us in Singapore about banks that refused or were reluctant to talk to us, reluctant to change. Important systems are now taking a leap of faith to try and do something.

FBP: You already have a foot in the door in terms of working with some banks in the region. And you claimed to have 47 clients already in Southeast Asia. There are some big names that you’re working with like OneSME. So it's a platform that also involves some government agencies in Singapore as well as commercial bank UOB. That gives you a door entry into working with UOB on its digital infrastructure. It also has its own digital banking solution, TMRW.

TBR: So OneSME is a slightly different project from the typical digital bank solutions that we sell. With OneSME, we didn't come with the intention of wanting to penetrate into anything. Ping An does a lot of things and we're very big on ecosystem learning. So other than productising certain products that we can generically sell to many players, like know your customer (KYC), lending solutions, or core banking solutions, one part of uniquely engaging our people in OneConnect is that we get to do whatever business model that is successful that Ping An has experimented in China. We would like to see whether we can replicate it. And a SME ecosystem is one that we have spent a lot of time on in China for Ping An.

A one-stop portal for SMEs

OneConnect, together with Ping An, built about six or seven SME ecosystems. There isn't a competitor in this space, literally, unless you find Alibaba or the other larger technology players to help you out. Otherwise, there isn't a fintech that specifically sells SME platforms because these are very customised. These are not really products per se. But we see that business model is essential for SMEs to be able to do something more digital cross border, plus with the COVID-19 situation, there is such a need. Of course, in every platform, we put in our strength, and it is in financing. So SMEs need more than financing. But then there is a lot of work with regard to getting a robust digital community domestically. The second part that relates to our advantage is that we are then able to connect to the China platforms. So for OneSME, that's what we did. This is between Shenzhen and Singapore. Based on a survey, we know that Singapore SMEs have a desire to sell things to China. It’s a big market, right? China SMEs actually have a desire to buy from Singapore, which is surprising to me when we did the survey because we're so small. Surprisingly, China's getting more international. They want to sell Indian food, Thai food. They don't know where to buy their spices. They don't go to Thailand directly to the suppliers. They go through a reseller in Singapore, there they're more certain that the food is of good quality. We find that Singapore has a strong reputation in terms of credibility for our suppliers in between. This is an edge for us just like we’re a strong transit port. Now we're a strong reseller of food products.

Accelerating cross-border commerce

The platform Infocomm Media Development Authority (IMDA) invested in the platform and we built it. But we were also very clear that you need to find a good partner to operate it. Because to operate an SME platform is a 2C business and OneConnect is a 2B business. So after we built the platform, we worked with IMDA to find a good party to operate it and Temasek came in with an entity called Trustana. Trustana has the same vision, which is to do well for SMEs. So they became the perfect party to work with us. Trustana was already half built when we met them. They have gone the other way around, which is connecting the China sellers to Singapore, which are very big food suppliers in China. We've gone the other way, which is connecting Singapore sellers to China buyers. So it’s nice that we merged them. It's a big win. And Trustana is very motivated to operate as a 2C platform and created a team to operate that platform. We continue a strategic partnership by providing the digital services.

FBP: How many SMEs are on the platform? So you're involved in providing the technology platform? Signing up of SMEs are done by Trustana or by the bank partners? And how do you onboard the banks? Despite that UOB was mentioned, are they free to choose other banks to provide financing, credit and so on?

TBR: Definitely. The ecosystem platform has to be open so it can't be exclusive to any particular bank or any particular type of SMEs per se. You might want to whitelist certain SMEs but then it's supposed to be an open ecosystem. So Trustana will onboard these SMEs. Then if there's any connection to China platforms, we will do the connection and we'll do the introduction to the China government platforms so that Trustana can then take the lead to onboard these SMEs onto the platform. The same thing on the Singapore side, that IMDA would work with Trustana. From the build of this platform, we have already onboarded about more than 200 SMEs that have all migrated to the Trustana platform.

FBP: Trustana and the OneSME platform are the same, right? So there’ll be no more OneSME? Potentially it could be rebranded.

TBR: Trustana platform is the Temasek platform. So we're going to adopt the Temasek name for the marketplace, we call it the SME Marketplace. So we will call it Trustana moving forward. We haven't actually discussed about OneSME. It may be rebranded as the Trustana brand name.

FBP: The underlying technology is OneConnect because Temasek also has the Blockchain @Temasek that they created.

TBR: A certain portion of Trustana is already built. Right now we're in the midst of integrating that so we're not going to kill any part of the functionality, because what we already built is quite complementary.

FBP: So integrating what you started designing for OneSME and then the existing part that Trustana is working with, you are forming into one? What they probably don't have is that connection with the China platform, which you bring to the table?

TBR: Yes, which I bring to the table. Temasek also brings a lot of things to the table for Trustana. We've found a good partner. Once the community is robust, the digital services on the platform should be open to all the banks in Singapore, including the new digital banks.

FBP: Your business model is software-as-a-service (SaaS), licensing. The licensing is through IMDA or Temasek? So at the end of the day, who's your client?

TBR: I still operate the digital services licenses so the solution still belongs to us. There’s a high chance that Trustana will monetise the platform based on the trading volume, buy and sell services on the platform. Then whenever the SMEs data is used for a loan or there’s a loan application, it comes to my platform then we charge a fee for the loan services. It’s usually a percentage of the loan amount or a percentage of the transaction fee.

FBP: So it’s ongoing. You're part of the platform services. So you’re not just a solution provider, you’re a transaction processor as well. Now in Southeast Asia, Ping An is not active. They're not directly involved in providing insurance or banking. They are in the Greater Bay Area and even in Hong Kong. Are there potential conflicts when you sell solutions to players in that market?

TBR: Yes. We will still operate the digital services because it’s not Trustana’s core strength. That is OneConnect’s core strength. So that makes the partnership a kind of on a continuous basis and sustainable for the both of us.

I don't look after the Greater Bay Area, but there we do everything, given how integrated it is essentially. It's just a one-hour drive from Hong Kong. But outside Southeast Asia, our value proposition is very clear. We don't compete. We want to be clear on our value proposition and our strength to enable the banks, no matter if they are digital banks or normal banks.

FBP: Increasingly, you are looking at digitising processes and operations. Ensuring not just a better customer experience in terms of end-to-end digitisation but also ensuring operational resilience and compliance for risk management of regulatory reporting. How is that changing? Incumbent banks are facing challenges in terms of whether these are product silos or data silos. They don't have information to really meet the requirements for regular reporting to ensure holistic compliance.

TBR: The banks today are capable of meeting their compliance requirements except that it's very labour intensive and has a multiple system. For the larger size banks, they can't replace everything at one go. They have to go step by step. That's why the entire implementation is a longer journey. And with the COVID-19 situation, it is more challenging because everything technical can be done on the cloud. You don't meet people face to face. But everything regarding governance processes require some face to face interaction especially if your clients are not here. So if you are servicing a traditional bank that has some level of history, a 40-50 year-old bank in another country, it may be hard to digitise whatever legacy, complexity there is without a face to face workshop. So that's the challenging part.

So the whole part of our solution uses a lot of anti-fraud rules and alternative data. It allows end-to-end risk monitoring. Usually in a legacy bank, you do post-mortem checking. But the ability to use that system also requires business process changes to adapt to that system. The digital banks will be easier. The traditional banks will require a bit of time. But you're right, it's not just changing a software, it's to get more job, it’s to have a better view of your customer. So it's not just about anti-fraud, it’s also having a better understanding of your customers so that they can react better and faster in terms of new products, new anti-fraud rules, new enhancements.

FBP: As you mentioned, it's very complex. It's not just improving the operations or the processes, it also involves the whole data part of the bank. How data is architected, the whole data engine, whether it's agile. The processes is just one part of it. So everything is connected. The technology, you play a role in terms of the whole system integration for the entire bank. In this space, there are a lot of different technology providers that promise the same. What's the difference?

Leveraging Ping An’s expertise

TBR: Based on what I see out there in the market, our strength comes up in a few areas. Let's take the most challenging customer, which is a legacy bank, a traditional bank with a lot of history and different systems. That's the most difficult to digitise. But they do have money so that's important right now. You'll find that it is hard to swap out everything. You will first need domain knowledge to do the work. Without it, you will be a fintech selling a solution that is ready, easy to plug on, but the customer will not be able to plug on. He will have problems using it as it is. For us, our strength is that we are owned by Ping An Bank.

We started with 50% veteran bankers from Ping An Bank when we first started OneConnect and that's very unique for us as a fintech with that domain knowledge. That is important to our clients who have complex requirements. The second is that usually for a legacy bank, after you deploy the software, there is a slow migration and adoption process because you cannot swap out right away. Unfortunately you need to change your processes and move the newer digital products over to the platform first, then you need to think of a way to retire the old system. For that, we’ve put in a lot of effort post-implementation of a system for adoption reasons because Ping An’s learnings around ecosystem is all about how to drive adoption of the software that you are implementing, how to acquire what we call internet or digital customers in China. Then hollow out your legacy system over time. So that part of the work is something we cannot package. Also, we call ourselves a technology-as-a-service provider rather than software-as-a-service provider because we provide much more than software. From that perspective, we are fixing a pain point that the legacy bank is having a hard time in finding such a partner.

Initially, I was also challenged by the fact that we have a lot of solutions. When you have one or two solutions, it is very easy to perfect them. When you have a lot of solutions, it's actually not easy. But it turned out to be a strength that the industry needs because the banks need to design in "baby" steps. They can swap out a lot of things. So they are going to swap out one part of the app first. For example in RHB, we designed in "baby" steps. So the first thing we saw was their internal agent app. The second thing we swapped out was their customer app, then their web portal before we go to the backend. You'll find that having different modules and the ability to work out this journey with a bank requires multiple solutions, otherwise, they’ll have to go to a different partner and there’s a high chance the projects are going to fail if they have to swap out with another partner.

FBP: In terms of the focus on digital banks, there are a few markets. Malaysia will be announcing so therefore we see 29 applications. The Philippines is also another market, which has already issued some licences. Both of them are Singapore-based fintechs and are operating digital banks there. In Indonesia and Thailand, we understand that there's a lot happening in the e-commerce space. Very strong incumbent banks as well. How do you see those markets developing? They also have in Vietnam but their digital banks so far are all affiliated with existing banks. Obviously, those markets have a real need for digital-only banks to push financial inclusion and there is enormous space for them to operate because banking penetration is low.

TBR: Yes definitely. Whether COVID-19 takes another 5-10 years or never recovers, there’s a need in Southeast Asia to address the unbanked population and to prevent further people from getting into poverty. An article said that about a billion people have gone under the poverty line since we had COVID-19 and a good 60% of the population are in emerging Asia.

In emerging Asia, we're doing very well. Most of our customers are in the countries, they are stepping up on digital banking licences. That's Malaysia and the Philippines. Indonesia and Thailand are coming up. In the United Arab Emirates (UAE), we have set up an entity in Abu Dhabi as service Abu Dhabi Global Market (ADGM), but the UAE is also issuing a lot of digital banking licences. So in the larger emerging Asia, you'll find that the ones that are connected by land to China in one way or the other are very pro-China, to a certain extent, very open to our solutions. But even the Philippines, Thailand, Singapore, Malaysia, the ones most surrounded by sea are also very economically dependent on China. We are more neutral as a party, but in my view as a Singaporean, health care and politically, we’re probably closer to the US and then economically, for sure, we’re closer to China. So in financial services, one key important thing is adopting technology. It will be stupid of us to discriminate. I came from US companies. I think China's solutions have an edge in terms of pricing and fit for emerging Asia. So those countries, they are doing very well.

The other thing that is up and coming is the insurance solutions. That’s a trend not to be missed. After the digital banking licence, in between, they will slow down as COVID-19 and lockdowns get worse. But I think the overall trend is the correct trend, which is to continue digitising. The insurance companies are backing up because they’ve been comfortable. They sat behind during the crisis, watching the banks struggle through it, the fintechs and all that. And I think they, as an industry, is taking a lot of learnings from digitisation of the banks and therefore there will be a higher chance to be quicker to adopt technology. When we first started, auto insurance was quite a bit under but we didn't take that solution because Southeast Asia wasn't ready with the data that's needed for auto. But for life insurance automation, I think definitely this will be a key focus for us.

FBP: Looking at your business in Southeast Asia, you mentioned digital banking, SME platform, we also know more recently, you've gone into the environmental, social and corporate governance (ESG) space, which is an interesting area. Give us a sense of the financial status of OneConnect in Southeast Asia. Are you profitable already, bearing in mind that you're still a growing company?

TBR: Yes, I think we are very happy with our three year-progress. It's always the challenges that you need to tackle in order to be able to service the clients. There are learnings in each different countries. Southeast Asia is a disparate set of different countries. So the learning curve and all that synergy between one country to the other need to be explored further. 

FBP: In terms of the penetration of the big banks, what's your penetration of the industry? The last information that was shared was 46 banking lines.

TBR: Roughly about half of them are the top 10 banks in each country because you will find that it is easier for me to go after the larger banks because they are faster to digitise. Then they look for service providers that has a suite of solutions to help them in their journey. So most of our initial customers are the top 10 banks. In every country, I would have penetrated about three out of the top 10 easily. So there's still a journey to go because state-owned banks are a little slower than the challenger banks. Usually, if you are number six or number seven, those are our ideal clients. They're usually the fastest to move. We see that our solution now is localised enough for us to even be able to service outside of the top 10 banks now. It's just that growing too fast means that you take longer to break even to a certain extent so were growing cautiously.

FBP: When it comes to technology, Ping An uses a lot of artificial intelligence (AI), machine learning (ML). So that will be part of your product suite and portfolio. It's also pioneering blockchain, DLT. How mainstream is blockchain and DLT today?

The struggle of implementing DLT

TBR: Not very much. I think it’s more hype than actual usage. So the AI modules have more actual usage So facial recognition, optical character recognition (OCR), card reading, voice recognition, those have actual implementations. DLT has been something that is very much spoken of, but it’s very hard to convince the banks to use it because essentially, it's not widely applicable. DLT or blockchain, you require an ecosystem. It allows you to share data. If you don't trust each other, it allows entities that are not associated with each other, that don't trust each other, that are unwilling to share data to hop onto one platform. That's where blockchain plays a good role. There are very limited scenarios to fit that. So we have banks coming to say that I would like to use blockchain. I have five or seven subsidiaries that want to share data. We say, those are your subsidiaries. You are willing to share data with each other? So you just need a normal platform to do data sharing. You don't need blockchain. The use is limited. But I will say that in the last two years, because I run the Blockchain Association of Singapore together with Chia Hock Lai, it has grown tremendously although last year it skewed towards crypto. So in OneConnect, we only do blockchain enterprise blockchain. We don't do the coin and the crypto part of it. But the crypto side of it has grown so much in the last two years.

FBP: So you’re not involved in crypto, in the tokens and the issuing of digital assets? You're more in the infrastructure process, using smart contract.

TBR: Yes. In China, we participated in the central bank digital currency, but in Singapore less so. It's still very exploratory. In China, most of the larger banks participated in the government effort to explore, understand and pilot some things. Monetary Authority of Singapore (MAS) is doing their own things as well. At some point, all the learnings will come to the table.  I do foresee that in the future, central bank digital currency might be a capability we build in our systems for core banking but there’s a high chance that won't be in the forefront when it comes to crypto-related or digital money-related.

FBP: Blockchain in payments. So Project Ubin has come to the end and it's kind of spun off into project party, commercialising the commercial payments. That is one application of DLT and blockchain. You have UBX in the Philippines and OneSME, are they on the blockchain platform?

TBR: No. OneSME doesn't have blockchain. The SMEs don't share confidential data with each other. The correct level of compliance with regard to PDPA is like if an SME wants to share data with another SME, it gives the proper consent in the platform and makes sure that there is proper consent. But there's no blockchain needed in that platform. In the future, whereby trading data from the platform further uses other functions potentially, there is room to introduce blockchain for sharing of confidential data. For example, if an SME wants to take out a loan and wants to share several entities data, if you buy and sell through another entity, you might need another entity to share the buy and sell data to validate. Those components might need a bit of blockchain but we're not there yet at this stage. We have applied blockchain in the Hong Kong platform. It's also a cross-trading, cross-border platform. It allows a check of double financing. So basically, all the banks on the platform, they can check whether or not this particular invoice has been financed before and they don't want other banks to know that they're checking and other banks don't want to know who is checking. So everything is done by the engineer that is using blockchain.

FBP: So it's kind of like double finance but you don't know exactly which bank did the financing.

TBR: Correct. So this thing about double financing is a very common problem. In fact, Hong Kong is the first country that built such a platform. You realise that it requires a lot of effort that’s non-tech related to a certain extent because if you don't share your invoices or upload your invoices that you're financing onto the platform, the platform cannot check whether or not it has been financed before. So it takes a massive effort for the bank because this is a lot of data to onboard onto the platform. Blockchain also has some technical limitations. So if you upload invoices that have different values, it's also a lot of data to upload onto a platform. So right now we only check larger ticket sizes. It benefits the entire ecosystem to upload that so that you also get alerted when I'm financing an invoice that has been financed by someone before the platform can also alert you.

FBP: About the more recent initiative with SGX on the ESG platform, that is for reporting of ESG integration as the trend towards ESG reporting becomes more mainstream of all listed companies. So what does the platform do? And is it functioning? Or is it a platform that’s under current development as reporting requirements evolve?

TBR: It is under development currently. We only signed the MOU a quarter ago. That’s the interesting thing about working for the Ping An Group. Everything new that Ping An is doing, OneConnect has access to the knowledge, to the learnings. ESG was a platform that we already commercialised as a product. It wasn't something that we wanted to do for profit. It's basically Ping An wanting to take a leadership in embracing ESG. China is the largest contributor of carbon in the world. So Ping An feels the need to do more. Initially, it was just as simple as: we have 40 subsidiaries and we can't even do our own ESG reporting correct. So how do you do this reporting when you have 40 subsidiaries? A lot of people feel that ESG reporting is very cumbersome. It takes a lot of money. They hire the likes of Klynveld Peat Marwick Goerdele (KPMG), Deloitte and spend a lot of money. Then after they report to FGX, which is a regulatory requirement, they don't get anything back. It’s like they ticked the box. With Ping An, it’s the same thing. We used three years of time to identify what data makes sense to collect. We also leveraged our international framework. There are quite a lot of international frameworks. Then we tried to fit this international framework into what's available in China. Then we created a platform that allowed all our 40 subsidiaries to digitally submit this report. Then we want to give back something to this 40 subsidiaries to motivate them to continue to report more regularly, not just once a year. We’ll provide feedback on benchmark and how they’re doing compared to others. We’ll also give the total scores. We use AI module to sense negative news, just to check the accuracy of the report. So if you say that something is kind of different from the negative social media, then it gets flagged out for compliance check.

FBP: You have a check for greenwashing as well.

Improving ESG reporting

TBR: Correct. So we built that for ourselves. So when I share it with SGX, SGX is having similar problems governing or regulating. The list goes on for SGX: what to report, what standard data to report. So that's what we're doing. We merged the Ping An ESG methodology, which incorporates four global standards together with the China standards into an ASEAN standard for SGX. So that's really analytical work. Then we look at what the SGX list scores are currently reporting and what they are capable of reporting to come to standard. There maybe 150 indicators for them to report. Then we put it into a platform to digitise reporting and this allows SGX to then do compliance check and give a score and feedback to the companies in terms of how they're doing compared to their similar industries and where they need to improve on. This this will help SGX regulate in the future. It is also a much bigger value for the companies to put in their report because again, it’s feedback from SGX. So that's what we're doing currently and the bill is in progress.

FBP: Are you targeted to launch towards the end of the year?

TBR: Given the timeline with the regulator, it’s not easy. It's not so much the tech work, it’s probably the process and governance work. At the end of the year, that sounds possible.

FBP: Is it a solution that is commercialisable? It's kind of wreck reporting. Obviously, companies will need to invest in this reporting requirements but is it something that they can commercialise by monetising their reporting or issuing ESG-related products?

TBR: I think so. I think every exchange that is governing or collecting ESG report is a generic need. Whether or not I can actually duplicate what we did for SGX and say it will fit Bursa Malaysia directly, I'm not too sure. But I definitely think that the learnings, the experience of doing it, the mistakes, all will come in and it’s something that is relevant for the rest of the countries.

FBP:Many of those topics are ongoing that there can be no end to discussing it. But it's a great opportunity to have your thoughts on these areas. Definitely we know going forward the areas to come back to for your comments. Thank you so much.

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