Fintech start-up rides AI surge to bring 'inclusive' finance to underbanked markets

A start-up is trying to catch the artificial intelligence (AI) surge to bring financial services to the underbanked population in developing markets. Meet Surfin-Meta, a Singapore-based fintech company that is making waves - and money - with its inclusive vision of financial empowerment.

The firm, with services spanning lending, credit cards, payment remittance and wealth management, mainly targets young individuals between 23 and 30 years old who have never had financial access before. It has more than 50 million registered users across nine markets.

Surfin uses AI to generate an initial credit score for users to kick-start their financial journey, based on their internet behaviour and activity, according to Yanan Wu, the founder, chairman and CEO.

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"Like our name Surfin suggests, we want to ride on the technology wave to bring down the barrier of equal financial access to a wider population," Wu said in an interview in Hong Kong. "We want to focus on the emerging markets' fast income growth, consumer growth and emerging middle class for the coming decade."

Surfin mainly uses social channels such as Instagram, YouTube, Facebook and TikTok for user acquisition, Wu said. Internet activities on the user's mobile device, such as social networks and search history, help the company build a user profile that it uses to produce the credit score.

Since its launch in 2017, Surfin has expanded to nine markets including Indonesia, the Philippines, India and Mexico.

Accumulated transaction volume for the last six years has surpassed US$2.5 billion, and the company has been profitable since 2021 while delivering 50 to 60 per cent revenue growth, Wu said. Surfin generated more than US$170 million in revenue and US$20 million in net profit last year, and it expects to double its revenue this year, he said.

Digital lending is growing rapidly in Asia despite high interest rates, especially in emerging markets. The balance of online loans to consumers and small and medium-sized enterprises in Southeast Asia grew by 26 per cent year on year to US$60 billion in 2023, and is projected to surge by another 400 per cent to US$300 billion by 2030, according to a study from Temasek and Bain Capital last year.

Traditional financial companies are also accelerating their use of digital services to retain users, heating up the competition. That translates to a "survival of the fittest" fight among pure-play fintechs, the study said.

To differentiate itself and retain users, Wu said Surfin focuses on building long-term customer relationships. Lending is the beginning of the user journey, and the company has been working to expand its ecosystem of other financial services.

Pedestrians pass commercial buildings in Singapore's central business district on April 11, 2024. Photo: Bloomberg alt=Pedestrians pass commercial buildings in Singapore's central business district on April 11, 2024. Photo: Bloomberg>

Surfin underwrites its loan book from its own capital and could tolerate a delinquency rate of as much as 20 per cent during its current expansion stage, Wu said, adding that non-performing loans remain in control as the fintech focuses on credit management.

The firm recently raised US$10 million in debt capital from Europe and aims to secure another US$20 million this year from Asian investors. It is also on track to close a US$20 million equity round led by Singaporean venture capital funds, Wu said.

In the next three to five years, Wu wants to make Surfin into a "regional digital banking powerhouse and fintech leader". In addition, he wants to be "inclusive, scalable and sustainable" by using AI prompts to interact with customers and cater to their needs.

"I hope to make customers feel more equal and valued through prompt-driven financial services," he said.

This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2024 South China Morning Post Publishers Ltd. All rights reserved.

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