Andy Li was an entrepreneur even before he founded Silot, a Singapore-based software company catering to banks. A Chinese national, Li has lived in Southeast Asia for almost 20 years and has been instrumental in growing local branches of large companies like Baidu and Sea in the region. Silot was the result of Li feeling the need to start something of his own.
Launched in early 2017, the startup promises to help banks process new methods of payment more efficiently and securely, without having to upgrade their systems. But the problem, Li tells Tech in Asia, is that financial institutions work with legacy infrastructure that isn’t built to easily accommodate new tech like QR-code payments.
Right now, banks are missing out on several opportunities, such as being acquirers for mobile wallets. An acquirer is the company that processes payment on behalf of the merchant in a transaction.
Companies like Adyen have stepped in to fill that gap when it comes to wallets like GrabPay. The reason for this is that for many banks, it’s too costly and time-consuming to upgrade so they can handle new payment methods. Silot provides that upgrade for banks by simply giving them access to its suite of tools.
Preparing for the future of payments
Silot’s suite includes an engine that can process QR-code payments, riding on the wave of adoption for this method in Southeast Asia, after it conquered China. The software supports QR-code payments from providers including Visa and Mastercard, Alipay and WeChat Pay, as well as Prompt Pay in Thailand and PayNet in Malaysia. It can also accommodate payment methods like NFC, as well as traditional card payments if needed.
Silot uses artificial intelligence and specifically knowledge graph technology, which makes sense out of data in silos. Data silos are stored sets of data within an organization that remain unconnected. This can often be because of legal and security reasons, and also because it can hamper a company’s processes as collaboration between different sets of information becomes difficult.
Knowledge graph technology can eliminate such data silos to glean useful insights without compromising security. For example, a bank might be looking for customers who need loans, but all the data they have access to is related to previous loan activity. But useful information about those customers might also be found in their transactions, or data from acquiring merchants. Silot’s tech is meant to bring all this data together to draw a full picture of potential customers for banks.
The idea is to get banks to work a little more like tech companies. “Internet companies have no legacy systems, because all the data is connected. And they have big data and AI teams to work with that data,” Li continues. Banks could build that infrastructure for themselves, but it takes significant amounts of time and investment.
Silot’s tech is meant to bring all this data together to draw a full picture of potential customers for banks.
Silot’s suite includes anti-fraud, anti-money laundering, and know-your-customer features to maintain security and reliability. It can make fast decisions, like identifying which transactions are legit and which need to be flagged. For example, if a user is traveling abroad, the system could gather and analyze data like the flight tickets they booked or the hotel where they checked in, and verify if the transactions coming from there are probably safe to approve.
Silot is targeting the Southeast Asian market and Hong Kong. It has completed a pilot with Krungsri Bank in Thailand, helping it accept transactions from payment platform PromptPay. It has also partnered with a “famous mobile wallet” in Singapore, although Li declined to reveal which one. It intends to explore other territories in the future.
Eventually, the startup wants to use blockchain technology to make data more accessible between different parties in a transaction, including financial institutions, merchants, and individuals. It plans to launch its blockchain product by the end of this year, so more details aren’t forthcoming.
Silot bagged US$800,000 in seed funding from ZhenFund in 2017, becoming the China-based angel fund’s first investment in Southeast Asia. Earlier this year, it raised US$2.87 million in a pre-series A round from fintech-oriented fund Arbor Ventures and Eight Roads Ventures, which has also invested in Alibaba. The funding will go towards Silot’s expansion in Southeast Asia, where the startup will be adding to its headcount.
Between two worlds
Before launching Silot, Li worked for a number of high-profile companies in the region. In Malaysia, he set up and managed local operations for Chinese software developer Kingsoft and Singaporean gaming platform Garena (now part of the Sea group). He was also deputy general manager for Baidu Global Payment, doing business development in Thailand, Myanmar, and Vietnam. And as ChangYou.com’s regional managing director, he established the Chinese online game operator’s Southeast Asia operations.
“In Jakarta, Bangkok, and Singapore, I don’t usually need a GPS,” he jokes. He can speak Thai and Indonesian, in addition to Mandarin and English.
This extensive work experience gave him the networks, connections, and confidence to finally build something of his own. But things got moving during a conversation with Max Hui, managing director of Chinese asset management firm CDH Investments, when they met over lunch to discuss a job opportunity in New Zealand. Li wanted to explore that side of the world, but Hui persuaded him to stick to Southeast Asia, where he could make a difference.
There are not many people familiar with what is happening in the industry in China and have the local connections in Southeast Asia.
Li counts Hui as one of two mentors who inspired him on his entrepreneurship trek. The other is Baidu president Zhang Ya-qin, who believes that internet companies looking to expand overseas should focus on the verticals where they have competitive advantage – whether that’s technology or operating experience in their field.
Li took this view to heart. When pitching to ZhenFund, he emphasized his understanding of the Chinese cashless payments industry and Southeast Asian markets. His experience of the region’s mobile-first mindset helped clinch the deal.
“There are not many people familiar with what is happening in the industry in China and have the local connections in Southeast Asia,” he claims.
China’s tech veterans
Silot’s 30-strong team is split between Singapore and Beijing. The team in the Lion City focuses on the operations and finance side of things. For example, COO Villence Yu is a Citigroup alum and a former product manager for Google Wallet.
The Beijing team takes care of tech matters and consists of several Baidu veterans, whom Li brought with him from his time there. It also includes research and development talent from Tencent and Alibaba. Bryan Sun, who worked on Baidu Wallet’s cross-border tech, is Silot’s CTO.
The team followed Li to Silot because, like him, they saw a chance to build a meaningful product of their own. Their work at Baidu didn’t have the impact they would have wished, as Tencent’s WeChat pulled the payments rug from under everyone in China, while Alibaba threw its considerable weight behind Alipay. “Baidu was far behind in payments relative to WeChat and Alipay,” he explains.
Li claims that Silot doesn’t have direct competitors at the moment, as its competition is mostly traditional banking system integrators that work with legacy systems.
The main challenge in running and growing Silot, Li muses, is in learning and improving how it works with traditional finance clients and partners. “Most of us have a technical background, and research and development requirements in the financial industry are a little bit different,” he says.
One example is applying fixes and updates to existing systems. Internet companies can push out regular updates to their products if they think it’s necessary. When your system is used by banks, though, this won’t fly. “Everything has to work from the outset,” Li stresses. “So we definitely need to learn fast and we cooperate with financial institutions to do that.”
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