Seoul is home to a growing number of innovative fintechs. As we have explored in recent features, numerous Korean administrations have had considerable success in encouraging the proliferation of start-ups through generous funding, favourable regulation, and sandbox programmes. While the Korean market is large and lucrative, more fintechs are also looking to expand to foreign markets across Asia and, indeed, the world. One of Seoul’s biggest fintech players – Innofin – is looking to do just this. #DisruptionBanking spoke to its Global Chairperson Darren Yoon to find out how they’re going about it.
Innofin describes itself as a “fintech company that collects, refines, and processes scattered financial data with artificial intelligence (AI) and big data technologies.” This data – collected from numerous sources such as traditional news and social media – is then used by banks, traders, and individuals to make more sophisticated investment choices on global markets.
Darren explained that Innofin was born after “the two founders realised the importance of written messages on sites like Twitter when it comes to the stock exchange.” Having collected and analysed these messages, they concluded that you could use them to predict, with a high degree of accuracy, wider market sentiment. In turn, this allowed them to judge where the markets were likely to move in response. “They used an old school type of psychoanalysis,” Darren said. “By analysing people’s tendencies in relation to specific issues, they found they could more accurately predict where stock prices were heading, and therefore trade accordingly.”
Innofin is already a major player in Seoul, but they have bigger ambitions. Darren told #DisruptionBanking that the company is considering three different business models, which aren’t necessarily mutually exclusive, as it seeks to expand into Southeast Asia and beyond. The first can broadly be described as B2C. “We could supply our platform to the big guys such as Morgan Stanley, who then send it to their clients.” The second is “more special.” “We’re going to provide our service to retail people,” Darren said. “So, to regular people like you and me. If you want to trade smarter you can use Innofin, through a subscription model. You just pay a small amount each month for unlimited access to a general audience.” And the third? Servicing the needs of “serious money managers.” Deciding upon the most lucrative option, or finding the appropriate combination of the three models, will be crucial as Innofin moves beyond Korea’s borders.
Darren is confident that this is achievable; in his view, Innofin’s credentials speak for themselves. “The first thing we seek to emphasise is the returns. That’s the foremost thing. Innofin helps traders achieve much better returns. The team at Innofin traded its own funds, using its own platform, and achieved a 20% spread compared to the S&P benchmark.”
The personnel Darren has helped bring into Innofin is another selling point for him. “The majority of our tech guys are serious people from academic backgrounds – graduating from places like Stanford and MIT,” Darren explained. “We have very high quality, great minds with a strong motivation for mind. They have built, and will continue developing, industry leading programmes and software.”
Darren also believes that current market conditions will help Innofin’s expansion plans. During a bull market, most people can achieve strong returns with not too much effort or expertise. Everything is on the up, after all. But a bear market – of the kind we’re currently in – is much trickier. “It’s a totally different ballgame. You really have to think about how you’re going to decrease your losses or achieve returns. Deploying different solutions and leveraging big data analytics becomes even more important.”
There are several practical things which Innofin is currently working through. First and foremost is securing global licences so they can operate in different jurisdictions. Southeast Asia, particularly Indonesia and Vietnam, are particular targets. Darren believes that the concentration of retail consumers, the fact they offer young and tech-savvy populations, and that they’re rising fintech powerhouses, are all factors in its favour. To service different jurisdictions, they’ll also need to ensure that their technology works across different languages. Darren said Innofin will be operational in Japanese, English, Mandarin, and Vietnamese by the first quarter of next year.
But perhaps most interestingly, Innofin is also looking to list in London next year and looks set to be trading on the Alternative Investment Market (AIM) by the end of 2023. Darren believes that London is the ideal centre for “global outreach,” and also pointed to the city’s thriving fintech community as an additional attraction. More widely, he hopes that going public will allow Innofin to continue raising the capital required to invest in its software and technology and thereby service an ever-growing number of clients globally.
Apart from a few global players – household names like Samsung and LG – it’s something of a rarity for Korean companies and fintechs to expand beyond its borders. But as Seoul becomes of greater prominence globally, this is changing. Innofin is certainly leading the pack in this regard. If Darren is right, then we’ll soon be seeing Innofin providing innovative solutions to financial institutions and retail consumers all around the world.
Author: Harry Clynch
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