COVID-19 continues to spread around the planet with now more than 7.3 million reported cases, including over 416,000 deaths, according to the latest data from the Johns Hopkins University.
In Southeast Asia, Singapore has one of the highest infection tallies, with more than 38,000 cases.
In addition to the human impact, there is also a significant commercial impact being felt globally as the Singapore economy is projected to see the deepest economic contraction since the nation’s independence.
Official forecasts from the Ministry of Trade and Industry predicts a contraction by between 1% to 4% in 2020, and nearly 70% of Singapore residents expect the business environment to deteriorate in the second half of the year, a recent survey by CBRE found.
In response to the economic and social consequences of COVID-19, stimulus packages as well as regulatory and supervisory measures from the government have been introduced to ease the financial strain of individuals and businesses.
But besides policy responses from the government, the private sector too has been actively supporting the business community by developing new products and services, and providing discounts and free services.
To do our part in supporting the fintech startup community, the Fintech News Network is covering each week a promising Singaporean fintech startup that deserve the spotlight.
For this week, we look at Koku, a foreign exchange (FX) tech provider serving Asia’s non-bank financial institutions (NBFIs).
Equipping Southeast Asia’s NBFIs with powerful FX tech
Founded in 2016, Koku is a fintech startup from Singapore that specializes in FX technology that serves NBFIs.
Koku’s FX TechUP Suite allows NBFIs including non-bank remittance companies and liquidity providers to provide their agents, corporate and retail customers across the world with cheaper, quicker and digital-first remittance and FX services.
The FX TechUP Suite consists of three core solutions designed to help NBFIs that have legacy or little to no technology: Money Transfer Stack, which allows businesses to leverage Koku’s white-label SaaS solutions to build out their own remittance and FX offerings; Liquidity Providers (LP) Connect, which allows them to invite and onboard partners and agents to trade across their own private network or Koku’s network; and Integrations Marketplace, a one-stop shop for clients to extend their remittance and FX business offerings.
Koku expanded to Indonesia in August 2019 following its successful US$2 million pre-Series A funding round.
Indonesia is “an increasingly promising market with a high migrant population and increasing inbound and outbound remittance,” the company said, adding that it had been collaborating with local partners including e-wallet players, micro-lending and payment companies, remittance and money exchange businesses.
Koku said it was also exploring opportunities to partner with local supermarkets and convenience stores, which would act as points of access to financial services for the unbanked community.
Besides Indonesia, Koku said it was also eyeing other Southeast Asian countries including Vietnam, Myanmar and Cambodia.
Impact of COVID-19 on remittances
A significant percentage of all ASEAN workers consist of migrant labor, whose remittances contribute to substantial proportion of GDP in many nations around the region. But with COVID-19 affecting all countries, global remittances are expected to fall by about 20% in 2020 due to the resulting economic crisis, the sharpest decline in recent history, according to the World Bank.
Remittances going towards low and middle-income countries (LMICs) are set to decline by 19.7% to US$445 billion, putting a strain on vulnerable households. In Southeast Asia, the World Bank projects remittance flows to fall 22.1% this year.
Though in past, remittances had been counter-cyclical with workers sending more money home in times of crisis, this time, the pandemic has affected all countries, creating additional uncertainties, the organization says.
