NexChange Interview Series continues with Olga Yaroshevsky speaking to Sankalp Shangari, ex-investment banker, and now tech entrepreneur, fintech pioneer and CEO of Algobitz. He has extensive experience in traditional financial industry having worked at JP Morgan and Deutsche Bank. He has also been a serial entrepreneur over the last 7 years, also being engaged in active angel investing. Sankalp finds time for blogging, speaking at events and and hosting an Asia startup podcast @HashTalk.
OY: You’re based in Singapore, right?
SS: Yes.
OY: This is one of the most interesting cities in the world in terms of technology development.
SS: Absolutely. It’s both a financial hub as well as a technologically innovative hub.
OY: Speaking of finance and tech. I know you’ve got a diverse background, but mostly you’ve been doing finance on different levels. Can we reminisce a little bit about where it all started for you? Like a quick overview of the most exciting milestones of your career.
SS: Good question. Like you said I have one of the most diverse experiences. I started as an engineer and then turned into an investment banker in London. Was working for Macquarie, and then Deutsche Bank and JP Morgan. It then moved me to Singapore. One fine day I decided that banking is enough, and tech is going to be the new revolutionary regime. That is when I started doing tech in about 2013, ventured into fintech, into mining Bitcoins. Just dabbling into various things the learn tech. One thing led to another. We had a team, we started three companies, one of them was a service company, one of them was a crypto wallet, one was a fintech company. We also launched Singapore’s oldest crypto exchange, etc. We advised and consulted, networked, and fundraised for several companies over the last seven years. And last year gradually we sold off each and every company to take a break. And I’ve been active again for the last couple of months to build something again, and that is where the whole Algobitz started. While the company has existed for a long time, and we have extensive experience in four particular domains. That’s briefly me – a banker turned entrepreneur.
OY: Can we go back a little bit to what you did at JP Morgan and Deutsche Bank. Have you noticed any interest in modern technology in the traditional finance world back then?
SS: Back then not really. We had systems that had been running for ages. Obviously, you keep on upgrading your software, but I wouldn’t say disruption was the word back then. I would say nobody, including myself, had dreamt that tech would replace so many people and so many systems so quickly. So the short answer is no. But I left in 2013, that was the peak in some ways, so very lucky to have left at the right time.
OY: Maybe it was the right time, as it was the dawn of the Bitcoin era.
SS: Yes, again, very very blessed.
OY: In NEO banking, what fascinates you the most, compared to what you’ve been experiencing in a traditional financial institution?
SS: That’s a great question. I think what fascinates me the most is to see how these Neo banks and niche fintech companies are step by step replacing the entire banking industry. With wealth management, with trading, with market trade finance, the whole crowdfunding investment banking, even the IPOs themselves are moving onwards, you’ve seen the latest craze about direct listings. Banks have suddenly woken up in the last 12-18 months, they realised it’s inevitable and it’s do-or-die. They have to be a part of it, either they make it themselves, or buy, or partner with someone, otherwise they’re gonna be left behind. And most of the banks, if you see, they have been left behind. Be it Deutsche, be it BNP Paribas, Credit Agricole, everywhere. I see that replacement of these banks makes me very happy.
OY: Now, to Algobitz. It does what seems like something that perfectly falls within your views and career – digital transformation. Please tell us more about the venture. I should say, the variety of services and technologies are insane.
SS: I’ll make it very simple for you. We are both a product as well as services company. On the product side and services side we work in four different domains, where our strength is. Which is blockchain, BFSI, or fintech, cybersecurity, and AI. In these domains, we provide A to Z services, of right ping protocols, building wallets, building exchanges, white label solutions, API integrations. On the product side we have some products which we push out for clients, or third party partners, vendors, as these products are not only state of the art world class but also have been build with a lot of experience, and mostly by making mistakes. So, learning – improving – making mistakes.
OY: Practice makes perfect, right? And it’s a business to business solution?
SS: Primarily, yes. It’s all B2B.
OY: What kind of businesses are your main clients?
SS: Honestly speaking, we are real business agnostic. But mostly our clients are startups, or growth companies. More than enterprises today. We have seen a lot of traction from enterprises over the last months, so I think that’s where we are now gradually moving to. With all the pedigree and experience that we carry.
OY: Do you relate to any particular jurisdiction? Does it depend geographically whether your services can be applied?
SS: Not really. We are a global nature. In my previous companies, I have had hundreds of employees on five different continents, we understand regulation and licenses. When we partner with companies, we don’t actually bring traditional tech. We’re bringing plan A,B,C for you. I know in my experience the plan A never works. Mostly doesn’t work. And perfection never comes. Tech is what is mostly commoditised today. Tech anyone can make. It’s more about how to execute the tech to earn revenues in that particular jurisdiction, how to navigate those regulatory waters, what licenses you need, especially in these four domains that I described.
OY: There are certain technologies that can be utilised by businesses, startups, enterprises, by banks. But what about governments? Do you think they need technical disruption?
SS: Absolutely. I think they need it more than anyone. An advanced economy like Singapore is a typical example. We’re advanced because of the technology innovation. We’re working on flying taxis and autonomous buses to be launched the next year, and the year after. Similarly, if you look at Dubai and UAE, they’re pretty much doing the same. Governments definitely need technology, because it takes away corruption and inefficiencies out of the system. The world as it is today doesn’t want to live in corruption. Tech is inevitable, it’s slowly creeping into every corner: the healthcare system, the municipal system, the government departments, the tendering systems. Everything is becoming technified.
OY: Well, Singapore is the best example here. You’ve lived there for the past 11 years. Can you try now to look back and make an overview how has the fintech landscape changed over the last decade — both in SG, and in Asia in general?
SS: I think the question is more on Asia that on Singapore. Because Singapore is so tiny versus Asia, just five million people. Usually companies are headquartered here, make product here and distribute it across Indonesia, Vietnam, China, Philippines, Hong Kong etc. From that perspective, he changes have obviously been immense. Ten years ago when I came I thought Singapore was so advanced, so clean, so secure, infrastructure was so great. But on the fintech side particularly I have seen a giant transformation from everyday going to a branch to do something to a total branchless banking today. I have not been to my bank for like two years. I’ve never needed it. Both corporate as well as my personal banking. And similar changes you see in China. People do not use cash. You go to Beijing, you will not find a note. Same for Philippines, so many fintech companies now. Same for Indonesia. And if I now compare this to the US, or Europe, I would say the US is today where Singapore was 10 years ago when I came. Venmo and Square are just coming today in the US. We are gradually moving towards a banking as a service model on the fintech side, where a company or a set of companies can just can give you an API for everything, you don’t have to build everything from scratch. And banks themselves, and thanks to COVID, are accelerating towards branchless banking. And every fintech is gradually taking away a piece of the banks’ revenue. The banks are actually suffering. And once you have proper regulation for digital banking these fintech are also allowed banking license, there will be lot of consolidation.
OY: Cashless society, branchless banking, open banking are the main goals of digital transformation on regional and international levels. And what would be the main goal for Algobitz for the next couple years?
SS: From experience and what I’m seeing in 2020, we’re living in very uncertain times. We don’t know what’s gonna happen around and after the elections. China, Russia, Middle East, North Korea, a lot of geopolitical stuff going on. For Algobotz the focus is sales. And profit. We want to stay profitable, always cash flow positive. Grow sales by direct sales and partners. We are signing partners across the globe as quickly as we can.