Highlights from our fireside with new Chairman of STACS, former Standard Chartered Singapore CEO banker-turned-unicorn leader, Ray Ferguson
Ever wondered how start-ups gain trajectory success? What drives a leader to take on the challenge of leading a start-up despite being an ex-CEO of a global bank?
Those are precisely the questions we put to Ray Ferguson [RF], the new Chairman of STACS, during the inaugural STACS Showcase x Singapore Fintech Festival 2020. Read on to gain insights from the leader who turned an insurtech start-up into a unicorn (valued at over $1 billion), and what his ambitions are for STACS.
Ray Ferguson, is a renowned international banker, business leader and advisor, having an extensive executive career in banking across 5 continents in multiple Chairman, Board, Chief Executive and business leadership roles, in particular, as former Standard Chartered Singapore CEO. Ray was also named a “Distinguished Fellow” for corporate banking by the Institute for Banking and Finance (IBF). In January 2021, STACS officially announced Ray joining the fast-growing FinTech start-up as new Chairman. In addition to his new role at STACS, Ray also holds other roles including as Chairman of Singapore-based technology insurance platform Aviva Singlife Holdings.
Catch the full video discussion and Q&As at the end during STACS Showcase x Singapore FinTech Festival 2020 here: https://youtu.be/gQGHGdGLnq4
Excerpts and highlights from the fireside are below:
[STACS]: Can you share your experience at Aviva Singapore and Singlife?
[RF]: I built my career in the general management side of banking, running large parts of Standard Chartered in Asia, the Middle East, and the Americas including having been Chief Executive in Singapore and SE Asia for many years.
About four years ago I decided I’d had enough of being a banker and looked to do some other things.
I was introduced to a founder who had the idea of doing something very different in the life insurance space with technology.
We joined forces to go out and raise the initial $50 million that we needed to put Singlife together, and through a combination of both our networks we were able to achieve that in 2017.
He came from HSBC and I came from running large financial institutions at scale, and although we began as a start-up with four people in the office and little more than a business plan on PowerPoint, we were able to convince the Monetary Authority of Singapore (MAS) to give us a license — the first that had been given in about 40 years.
We took it forward from there with a few principles in mind of being cloud-only and paperless, which was still a challenge in 2017 because the regulator still hadn’t got its head around digital signing and paperless record keeping.
We worked with them and were able to overcome those barriers, which are now really commonplace, and set up Singlife with a goal of making life insurance much more cool, easier to transact, and more engaging than what was currently being offered.
Our journey took us through an acquisition of Zurich Life in Singapore in 2018, and in the same year also acquired a company that had the capability of issuing Visa cards.
What does an insurance company have to do with Visa cards? We figured that cards and day-to-day money management are as important as linking their protection, life insurance, and savings needs.
We set about building something called the Singlife account, making us the first ever insurance company to issue a Visa card and through it onboarding tens of thousands of clients into our ecosystem.
Moving forward, we raised money from two family offices but realised that for enhanced credibility we also needed to raise money from institutions like Aberdeen Standard, Aflac (a large US insurance company), and Sumitomo Life from Japan.
By about a year ago, we felt that the next big step having built the infrastructure was to get more customers, and around that time Aviva wanted to sell their Singapore business which had 1.3million customers.
Aviva Singapore had a lot of product and tech, but it wasn’t the cloud-based intuitive app-based mobile-first infrastructure we had built ourselves.
We had a vision that if we could combine that mobile and cloud capability with the Aviva product set and customers, it would be something we could roll out in Singapore and take regionally.
Unfortunately COVID then got in the way after we’d started in earnest on the initiative in February, and things got really tough so we backed off only to restart in July and get the deal finalised at the end of November.
I’m going to chair the enlarged group, which represents a $3.2 billion transaction, and we also raised some money in the bond market which was more than six times oversubscribed.
We raised some significant equity from one of the world’s largest private equity players, and Aviva kept a 25 per cent stake for themselves.
What does it take to do all this? A lot of tenacity, vision, and effort — but I say to all aspiring businesses lower down in the cap table (compared to our scale now) not to be shy on where you want to take it.
Don’t underestimate the importance of getting institutional shareholders on board, even though it’s very difficult than venture or family office money.
[STACS]: What drove you to start life as an insurtech entrepreneur despite having a successful career as CEO of Standard Chartered Bank in Asia?
[RF]: It’s very hard to change what are essentially old banks, whereas fintech was quite new in 2016 and being talked about.
I took time out to do a virtual six-week MIT programme in fintech just to see what was going on and got inspired by some of the people I worked with in the cohort, including the faculty.
When I met up with Walter who’s the founder of Singlife, he’d been trying to raise money for quite a long time at that point despite having a very clear vision and great name and logo for the business.
I thought it would be very different to take on a Chairman/investor role rather than being a CEO, and felt we could take the best of the tools available in the world to built with.
Now we have a very interesting opportunity to take a traditional business with traditional products, distribution, and technology and gradually infuse what we’ve built over the last three and a half years.
[STACS]: How has technology supported Singlife’s growth over the past few years?
[RF]: I’ll answer that having been at big financial institutions and contrast that.
Places like DBS, Credit Suisse, or StanChart are trusted organisations because they’ve been around a long time and have built a record of serving customers, being efficient with payments, or whatever they do.
The issue with that is that technology has generally been layered in a legacy way on top of each other, as businesses have been bought and regulators/auditors have been scrutinising them, or just for business continuity reasons.
What ends up happening in the traditional businesses is what I call the whole spaghetti layer, where systems are layered up like spaghetti and it’s not easy to innovate with that environment.
These are problems faced in the traditional businesses, whereas what we did at Singlife was we only built using a very modern architecture and integration layer to give us a single view of customers.
Everything we did on the back-end with different services and products would come in via the integrated layer and be output at the other end for customers in an API, which makes it easy and quick to scale (days rather than months or years).
So advantages of our model include technology, fast decision-making culture, and lower costs.
We took a stake in Railsbank early on because we thought it was a good investment and wanted to get to know what they did and how they did it, which has informed out API-centric approach.
A lot of this couldn’t have been done 10 years ago, but what we have now is an offering that’s safe and secure at a fraction of the cost.
[STACS]: Why did you choose the fintech industry to launch a start-up in?
[RF]: When I became a banker 30 years ago, we didn’t think about “fin” and “tech” in the same way we do today, though if you step back you realise nothing can be done at scale without technology.
Of course, 30 years ago there were computers in the background but there was a lot of manual paperwork and payments took days.
The growth of big tech with Google, Amazon, and Apple, and WeChat/Ali in China has been building over the last 10 years.
If the big financial institutions didn’t have all the legacy tech they did, they would have owned this space — but fortunately for us they don’t.
In China, fintech grew much faster because a lot of it was new and they were creating for new demand.
In the life insurance space, for example, by having a lot of data about your life and health, we can quickly calculate premiums to insure a life much more quickly than before.
We use individualised data to create a product that’s personalised in terms of what it offers but also on the pricing of it to these individuals, and that’s what’s exciting about it going forward.
Data is being used not to just sell you something, but to make life easier, better, and more efficient.
I wouldn’t necessarily describe myself as being in “fin” or “tech”, but in the business of disrupting, just as we are now at STACS working with some of the biggest, conservative, and important institutions in the world to do things differently than they have for many years.
We’re able to help them think about things in a Distributed Ledger (DLT) way, which eliminates massive costs and saves lots of capital while improving customer experience.
It’s a coming together of technology and acceptance/trust in them, which we probably wouldn’t have had 10 years ago.
[STACS]: You have just joined STACS as our Chairman. Are there parallels here to when you joined Singlife four years ago?
[RF]: Yes, there’s a couple of things that strike me when I contrast these two.
The first thing is that if you’re going to be a chairman you have to work with a great chief executive.
It’s fantastic working with Walter and Singlife, and I’ve known STACS’ CEO Ben for at least four or five years and he’s a very close friend.
I got to know Ben in his early days of pioneering in this space and he’s a wonderful guy to work with, which is first and key — the rapport, camaraderie, and shared vision.
The second part is the market opportunity for STACS which is colossal, global, with big and sophisticated institutions; it’s not rocket science, the technology is very well proven and doesn’t need to be massively developed from an experimental phase.
I can help STACS using my understanding of how big custodial organisations work, how the bond issuance market works in various emerging markets, how big institutions work and how their governance and boards think about new things.
Bringing all this together, I can really help the team get some great wins on the board and scale the company from a customer side as well as from an investor appetite.
STACS can leverage its base in Singapore as a homegrown company and the trust that brings with it, to turn it into something special and do what it says on the tin — save institutions money and make things more efficient for customers.
Last night I was at a dinner and we were talking about mentoring and paying it forward in the context of the broader community (rather than fintech specifically).
I was making the point that if you’re in a big business that’s grown to $100-$200 million in size, please take some time out to help the guys that are at the stages before you — if you can’t afford to invest that’s fine, but give some time and mentoring.
That’s why I agreed with Ben and the rest of his investors and board to come in and give a hand.
[STACS]: What’s your ambition in terms of what you want to achieve with STACS?
[RF]: I think STACS could become a globally renowned infrastructure player for the financial services sector built on it’s DLT backbone with proven strength of governance and infrastructure here in Singapore.
We need customers that are global in order to become a global institution ourselves, and these are the directives we want to take forward, to find propositions that allow us to work with the big banks as well as the Accenture’s and PwC’s of the world — to help them get away from the legacy spaghetti environment a lot of them are still in.
We want to allow financial institutions to automatically reconcile trades and to remove costs with technology, which I think they’re going to love.
With a bit of luck, we will be able to start traveling in the coming few months, such as tripss to Hong Kong we are planning as well as other major parts of the financial world to explain what we are all trying to do.
STACS (Hashstacs Pte Ltd) is a Singapore FinTech development company with a Vision to provide Transformative Technology for the Financial Industry, with its complete infrastructure of ready platforms that make global markets simpler. STACS is leading the way forward by digitalizing assets, processes, and documents using its proprietary STACS Blockchain technology. Its clients and partners include global investment banks, national stock exchanges, custodian banks, asset managers, and private banks. STACS is an Award Winner of the Monetary Authority of Singapore (MAS) Global FinTech Innovation Challenge Awards 2020, a technology partner of Project Ubin led by MAS, and also a two-times awardee of the Financial Sector Technology and Innovation (FSTI) Proof of Concept (POC) grant, under the Financial Sector Development Fund administered by MAS. STACS remains committed to its Mission to empower financial institutions to discover new opportunities through its technology.