Posts in category: GCG Asia Fintech News

In today’s day and age, the financial technology industry is flooded with young enthusiasts, many of whom are still in their early 20’s lacking the experience required to start a business. But are they really entrepreneurs or merely risk-taking dilettantes? 

The term entrepreneur mostly refers to an individual, regardless of their age and experience, who has a vision for a new innovative idea to break into the market, whether it’s in the fintech sector or other fields or industries. Entrepreneurs, especially young ones often overestimate their skill set and their ability to venture into the market. It is this level of overconfidence that is often what leads to premature failures.

That is not to say that many entrepreneurs aren’t succeeding. In fact, many young entrepreneurs do achieve their goals. But many fail, even if their idea is revolutionary because there are certain measures to be taken when trying to bring this idea into life. There may be no rules, but should you not do a certain set of actions as someone just embarking on your start-up, things can very quickly go south before you even get out of the starting blocks. 

Dr. Eddy Teow, CEO and founder of GCG Asia: Global ComTech Gossip has a lot of say about this. He should know, having been a young upstart once and encountering many aspiring entrepreneurs in his career.  “Many young entrepreneurs live in a fantasy world. They think that they can venture into an industry in which they clearly do not have a strong understanding of,” he said. “There is nothing to be ashamed of if you are ambitious, and I am not saying that young entrepreneurs should not jump into the industry, but what I am stressing on is the importance of exploring the industry before jumping into it. Do your research, try to network and speak to others in the field, so you can learn from other’s mistakes,” he added.

We’ve seen the damage it can do to the spirits and confidence in young entrepreneurs when things do not go their way. That is why our team here at GCG Asia surveyed fintech business leaders and compiled their responses for ideas for how to get a head start on your entrepreneurial journey. So here’s a few tips on what to avoid when starting a new fintech business.

• Don’t RushThings, Take it Easy.

It sounds simple, but really it isn’t that simple especially if you’re young and ambitious.  In fact this should be the first step for a successful start to any business. Just breathe, take a step back, and realise that what you want will not come quickly. Everything takes time and effort.  Though you might be tempted to barrel ahead, for every step you take, you must ensure that time and resources are met to reach set goals and the desired level of quality you and your team want to achieve. Planning and forethought are essential. 

• Don’t Skip the Regulations

As we all know, the financial technology sector is heavily dependent on regulations that are constantly changing and evolving. The internet for example, has only been around for 20 years, and people are still learning about it. Current debates on regulatory frameworks in fintech are also constantly changing. It’s crucial to keep abreast with current developments on this within your context as it is important to comply with such regulations and to also work with authorities if necessary measures need to be taken. 

Your business should be transparent with the authorities on consumer protection and have the necessary legal processes to comply with legislation. There are always opportunities to work with cybersecurity firms and law firms to ensure that your business is running accordingly to avoid any sort of future hassle that could heavily affect your business. GCG Asia founder Dr. Eddy Teow says this is a very important aspect to take note of and to face head-on.  “Perhaps the most challenging aspect of venturing into the financial technology industry is to comply with regulations, and to enhance cybersecurity,” he said. 

• Don’t Ignore the Technical Challenges

Many fintech startups are extremely buggy and messy.  You see, an idea is one thing, but bringing a digital service or product to life is a whole other thing. You will face technical difficulties, but do not underestimate the amount of time and work it will take to resolve these issues.  Especially if your product or tech is a super ambitious one. We all want to make the impossible possible, but you should also consider what could be possible in a technical sense. Devote ample resources towards this area by getting the best talent and the best minds you can to help you.

Make sure you address any technical issues that you could potentially encounter during the execution phase.  It is always better to plan ahead so you could be more prepared, but challenges are very unexpected, and you might not see it coming sometimes! And if it ever happens to you, don’t sweep it under the rug. You must address it, and not hide your head in the sand. 

• Know Your Audience & Client

This an important one, many have fallen into this trap. It is such a common mistake many entrepreneurs fall into, luckily we are here to help you address it. Know your client! Know your audience! You can’t just expect them to like your idea just because you think it’s great. Your idea must be based on other people’s legitimate needs, to fill a gap in the market in a way that ensures a satisfactory experience for your client and audience. 

That is why you must strategise pursuing the right client and the right audience. There must be a mutual understanding between you and your clients. It’s all about finding the right niche and to have a clear understanding of who your target audience is.  

• Aim for a Positive User Experience

Perhaps this is regarded as the most important thing to pursue. It is not all about making money. There is nothing wrong with wanting to make money, but you can’t have a successful business with your customers having a negative user experience. It is super important to generate a positive user experience in order for your business to grow. Take customer feedback seriously and  do not let harsh criticism and negative feedback get to you. User feedback is extremely important for the success of your business, and for you to get to know your client and audience better.

As GCG Asia researcher based in Singapore Carmen Chan explains, “Customer experience is considered the most important success factor in any business, but most importantly in the fintech industry as technology is meant to make things easier and more efficient, always aim for improvement even if the product and service is already in good shape, always try to think of new ways to improve the user experience to reduce the roadblocks consumers may face when using your product or services”.

• Your next “Big Thing” is Probably your next “Big Failure”

You see, if you think your idea is great, don’t let it take over your head, have some common sense, many of us could get distracted from reality by thinking of extremely unrealistic goals. There must be a balance between “big tech” and perceived “big practice”. 

The element of risk involved in transforming revolutionary ideas into reality is extremely high. Take for example writing a new application in a different language that is not being used in the market today. Do you see the risk involved here? Even if this new language could help you reach what your intended audience, you must consider the risks involved in drastically going against conventional rules. That is not to say that you can or should always conform,  but just understand the risks that are involved if you wish to do so.

•  Don’t Forget, You are Only Human After All and So is Your Team 

Impactful digital products and services can never succeed without the right team in place to help you achieve your goals.  Remember that you are dealing with humans that need to be nurtured. Be kind and understand their passions and flaws.  Try to designate the right task to the right person, do not overwhelm them with work that they should not be doing, or else be prepared to face a drop in productivity and morale. 

Remember that your business is your responsibility at the end of the day. You must identify new growth opportunities and understand the fierce competition for talents you face in the fintech industry. Building the right team that truly identifies with your vision and are on the same page as you is the necessary step to keep your business on the right track.

Forex, otherwise known as foreign exchange, FX or cash exchanging, is a decentralized worldwide market where every one of the world’s monetary standards gets bought and sold. The forex market is the biggest, most liquid market on the planet with a normal day by day exchanging volume surpassing USD$5 trillion. If you’re looking to get started in trading in forex, this article is here to get you started. In this article, the GCG Asia Forex Trading team explains how you may track down opportunities in currency exchanging options in the changing market. 

First, what is forex? How is it determined? The forex exchange rate between the two currencies is based on supply and demand which determine the amount of currency you will get. The foreign exchange market is a worldwide commercial hub that is open 24 hours every day Monday through Friday. All forex exchanging happens Over the Counter (OTC), which means there’s no actual physical place (as there is for stocks or equities), as OTC transactions occur directly between two parties.

GCG Asia Malaysia and Singapore forex trading teams explain that exchange rates fluctuate continuously depending on environmental factors varying from geopolitics to environmental disasters. These fluctuations are closely monitored because of their potentially huge effect on businesses. For example, if someone values 1 Malaysian Ringgit at 0.32 Singapore Dollars on Thursday, but come Friday, the Malaysian Ringgit is valued at 0.33 Singapore Dollars. This does not seem like much of a difference for the average individual but imagine being a Singaporean multi-million dollar company having to pay hundreds of employees in Malaysia. This minor change can pile up and cost the company a big amount of revenue if the currency is not traded at the right time.

While a great deal of foreign exchange is used for functional purposes, most trades are done with the aim of gaining profit. However, forex trading can be unpredictable. As GCG Asia CEO Eddy Teow explains, “It is this instability that can make forex so appealing to brokers: achieving a possibility of high gains, while additionally expanding the risk. High risk, high reward, as the saying goes.”

A larger part of the exchange in the forex market happens between institutional traders, for example, individuals who work for banks, corporations, and hedge funds. These parties don’t mean to take actual ownership of the monetary forms themselves; they may be predicting the future exchange rate variances with educated guesses to make a gain. For instance, a broker may purchase Malaysian Ringgit and sell Singaporean Dollars if the broker thought that the Ringgit will gain value in the market and Singaporean Dollar will continue to dip. 

Advantages and Disadvantages of Forex Trading as an Investment  

Although forex trading seems exciting and profitable, GCG Asia experts caution that it can turn around on you very quickly, turning profit into accumulated losses. As a GCG Asia report once stated: “when you purchase and sell currencies through foreign exchanges, you’re wagering on how various nations’ currencies rates will change against each other. All else equivalent, on the off chance that you buy a currency that winds up strengthening in rates against the currency it’s concerned with, you benefit. On the off chance that its rate diminishes you incur shortfalls.”

All trading instruments and markets have their advantages and disadvantages which you should know before taking the leap into making a trade or investment. Here are some of forex’s trading pros and cons:

 Advantages:

• Cost-effective: this means that in the spot market, typically there are no clearing charges, no exchange expenses, no administration burdens, no business expenses, and no commissions. “Brokers make their yields from the bids which are extremely straightforward to clients,” GCG Singapore analyst Ben Foo explains.
• Decentralized: the foreign exchange market is estimated to be one of the largest markets in the world worth more than USD$5 trillion in trades. There are numerous individuals trading each day which means extreme losses are somewhat hard to come by.
• User-Friendly: the forex market is easily accessible for anyone with limited capital and low operation costs, while also eliminating middlemen which allows direct access to the market for everyone.

Disadvantages: 

• Risk of scams: One of the disadvantages of forex is the high possibility of getting scammed by brokers that are not reliable and untrustworthy. The prevalence of unreliable scam brokerages is one of the reasons GCG Asia is developing the Scam Finder software to find and report scams in forex trading.
• Low transparency: low transparency in access to real-time data is a disadvantage for newcomers. This makes it harder for non-experienced individuals to enter the market, and easier for brokers to vary their prices.
• Country Risk: naturally, an investor should evaluate the market before entering it. Meaning that the investor must look into the environmental stability of whichever country’s forex they want to invest in. For example, a country may be facing political turmoil which can lead to a steep devaluation of the currency. That is why GCG Asia’s experts recommend newcomers to always invest in the world’s major currencies such as the USD, the Japanese yen or Pound sterling, rather than riskier third world currencies which might be more volatile, thus lowering your chances of getting a decent return on investment.

Types of Forex Trades

Due to the size of the market, the market is split up into three types of forex markets where a specific type of currency trading takes place. These are:   

1. The Spot Market: GCG Singapore’s Ben Foo explains that “The spot market makes up about 40% of the all-out exchange, and this is the place where you will discover most retail brokers.” The spot market is also the biggest forex market and is the place where every day traders use to exchange currencies. The word ‘spot’ comes from the ‘on the spot’ where the currency is purchased or sold at that moment. During this process, the cost is determined by the interest or supply of the currency. In the spot market, genuine currencies are exchanged, and when an agreement is agreed upon, it is known as a “spot bargain”.
2. The Forward Market: In the forward market, currencies are not sold. Rather, contracts for commodities and currencies are purchased and sold over-the-counter between two parties. The terms and agreements are controlled by those parties. 
3. The Futures Market: The forex futures market is the place where future agreements are purchased or sold, to exchange a pre-defined measure of currency at an agreed-upon cost, at a set date later on. In the futures market, contracts are done depending on the agreement’s expiration date.  

How to Start Trading 

GCG Asia Forex Trading experts advise investors to always be aware when it comes to forex trading to avoid any scam or price manipulation in the forex market. GCG Asia also recommends always use regulated or government-certified forex trading brokerages rather than black markets that promise unrealistically low fees or other sweeteners to lure investors. GCG Asia advises their clients to always go a step further and verify that brokers are reputable, qualified and certified to get the best out of your trades.

GCG CEO and founder Eddy Teow explains that forex trading for all its volatility does have one advantage over trading in equities. “Forex trading is focused and limited. There’s simply a limited number of currencies in the world. While newcomers can be overwhelmed by the numerous stocks in the world that are available to buy and sell, this doesn’t happen in forex.”

On the other hand, GCG Asia experts would recommend forex trading for several reasons. First, if you are looking for high liquidity then forex is the way to go. The forex market is open 24 hours daily from Monday to Friday, which makes it a lot easier to trade with foreign currencies in real-time. This means there’s ample opportunities to make profits at any time of day, especially using automated trading orders, you can set it and forget it! Trading in forex is also a great way to diversify your portfolio. 

However, the forex market is also very volatile. This means there is considerable risk for newcomers to forex trading especially if you don’t have a proper strategy. GCG Asia experts advise those who are interested in getting into forex to assess your risk tolerance and time horizon (whether it’s hours or days or weeks), just like any investor would do before making any investment. “Evaluating your risk appetite, thinking of your strategy etc, all these elements are an important part of any trade and investment, whether your focus is on short- or long-term gains,” says GCG Asia CEO Eddy Teow. 

Finally, there exists many tools and software that may help you in investing in forex. GCG Asia highly recommends that you train and learn more on using any of these tools before diving into the world of currency trading. Not only that, seeing as how geopolitics and environmental events directly affect the forex market, GCG Malaysia analysts suggest following the latest news from multiple news sources every day in order to keep up to date. You could also follow brokers and investors that have experience in the field to gain more knowledge from their experiences in forex.