Chat with Fintechs: Pratik Gandhi, Chief Business Officer, InstaReM
Global Remittance and FX Market Volumes
World Bank estimates that as much as US$ 601 Billion are remitted by international migrants to their families back home in 2016. Also, BIS estimates that the average trading volumes in the foreign exchange markets is around US$5.1 Trillion in 2016. The mammoth size of these remittances and FX trading volumes are mind boggling, and if you were to factor in the fees and charges that the intermediaries levy on end users for making a basic money remittance from one country to another and involving a currency conversion – it is unbelievable how much money they are making!
It is often that we resigned ourselves to established processes and standards in our everyday lives. For example, many of us have had the need to send money (otherwise known as making a remittance) from one country to another country for a myriad of purposes. And very often, without knowing any better and subscribing to the norms, we grudgingly accept the fees and charges that the traditional remittance houses, banks or agents levy on us.
Luckily, all these are changing and improving for the better. Especially with the advent of technology and proliferation of data and information, one can easily make a better choice. And we have Fintechs, who have the misnomer or wrongly labeled as disruptors, that are bringing about innovations that improve the lives of end users like us, whether in our personal lives or as a Treasurer/CFO.
We had the great opportunity to speak to InstaReM, one of the top Fintechs based in Singapore and which recently secured its Series B funding of USD 13 Million and have been ranked by World Bank as one of the top remittance providers who have the best solutions for several corridors (remittance routes).
InstaReM – Instant Remittance Trailblazer Fintech Startup
TFAGeeks: Hi Pratik, many thanks for inviting us to your office and agreeing to sharing more about InstaReM and its impressive journey. Since starting in 2015 in Australia it has expanded tremendously and now you have footprints in more than 25 countries across the globe, the number of users have increased on an exponential rate from a few hundred retail users in 2015 to over 20,000 users in both retail and business space. Could you share with us how and what made InstaReM so successful and what was the game changer?
Pratik: Thank you Seng Ti, it is our pleasure to share more about InstaReM. First of all, our company name “InstaReM” is a blend of two words “Instant” & “Remittance” which by the way is one of our company goals. Prajit Nanu and Michael Bermingham, InstaRem’s founders, used to work together in UK. Prajit wanted to make a payment from Thailand and had difficulty in finding a cost effective way to do so. They were “surprised” at how cumbersome the process was and shocked at how non-transparent and costly the charges and fees were for executing such a simple plain vanilla transaction. Both partners identified the need for improvements in the money remittance industry, and they got together a team and created InstaReM that enables and brings access for the masses to new and improved ways of money remittances that are fast, cost effective and transparent. Fast forward to today, in the recent World Bank report on “Migration and Remittances”, InstaReM is amongst the leaders in 17 corridors when it comes to their matrix in identifying the best money remittances solutions.
TFAGeeks: What is InstaReM’s client profile like, majority being retailers and SMEs or are there MNCs? How does InstaReM reach out to your audience and markets? And what do you think are the compelling reasons for them to choose InstaReM than Banks or your competitors?
Pratik: We started with end users, like yourself who need to remit money to friends in another country. And we expanded to businesses, including SMEs, other payment service providers and even small and mid sized banks as we provided good economic sense to small businesses who needed to remit money but are terribly disadvantaged by the traditional remittance options that were available to them. Our MassPay solution allows them to send money fast, mostly within 24 hours if it’s within Asia; our solutions are cost effective – our fees are the lowest if not amongst the best around; and we do not have hidden fees and charges – we strive to provide transparency to our clients. You might be surprised, but we do have MNCs in our portfolio, our solutions enable them to fully cover their last mile remittance – we have partnerships with local banks that provide coverage which major global banks usually are unable to provide for their MNCs clients.
What attracted them to us? I think we offer a product that fills and fit the gaps in the market; not only in terms of speed, costs and transparency, more importantly we provide good solutions to real problems faced by our clients, be it retailers, SMEs or MNCs. We provide practical answers, for example, it does not make economic sense for a SME to incur $40 fees and charges on a $2,000 remittance, InstaReM solves that and we cut these costs dramatically! We provide instant remittance and instant savings. For some clients, it is a tall task in getting money to places that are off grid or are not covered by their main global relationship banks. At InstaReM, we enable our clients with the ability to remit money to these places through our local partnerships, and we do it efficiently and effectively.
We started out with 1 corridor, Australia to India, but now we are active in nearly 2,000 corridors and we are continuing to explore and expand our geographical reach so as to provide our clients a more comprehensive solution. Most of our clients are largely through referrals and word of mouth, we do place advertisements and traditional marketing campaigns.
TFAGeeks: Some of the existing players like Banks and Financial Institutions might see Fintechs and Startups, like yourself, as a competitor. What are your views on that? Can the market allow everyone to coexist, or it has to be a zero sum game?
Pratik: We do not envision ourselves to become a Bank or Financial Institution, in fact we see ourselves more of a player that provides solutions that fill the gaps in the market – gaps that traditional Banks and Financial Institutions have overlooked; are unable to cover (because of regulation, costs and many other reasons); and are not practical nor feasible for these incumbents to tackle. My opinion is that the market is large enough for us all to fit in, we can complement one another and create a better ecosystem for all. I do not see it necessary to be reduced to a zero sum game.
Banks and Financial Institutions will change and play catch up, in terms of technology and adopting the latest innovative solutions. Either they create that organically or they can partner with Fintechs like us where they can benefit from the symbiotic relationships. That said, it is not always easy for banks to change, because of their size, organization setup, regulation and host of reasons.
TFAGeeks: The money being poured into Fintechs and Startups have been massive in the past few years. Some skeptical folks are comparing it to the dot com bubble during the millennia, what are your thoughts?
Pratik: Excesses are likely to happen, and can happen, but in my opinion, we are still some distance from being in a bubble. Some consolidation might happen, that is natural, but I do not think we are in any bubble land now.
TFAGeeks: What do you look for when you make a new hire for InstaReM? Apart from the hard skills and technical qualifications, what other attributes or characteristics do you look out for?
Pratik: Good question. We are expanding relatively fast and we are always looking for talents. If you look at our staff profile, we are not the “stereotypical” setup with young bubbly fresh graduates; we value experienced and proven talents who will add value to us with their knowledge and skills. And more importantly we look out for the drive and passion in our candidates. It is crucial that we do not hire people with the “cruising” mentality. Our management takes effort in screening our candidates, sending them for various rounds of interviews, not only with the management but also with our operations team. The candidates need to be able to work with everyone. That said, there is always the possibility that some will manage to slip through these checks and their undesirable traits will only surface after a while. We do not tolerate and will not allow such negativity to fester and spread through our teams, and our management have no qualms in removing such negative elements if need be. Passion, drive and team work are necessary qualities that we place value on.
TFAGeeks: Do you have any advice for aspirants who wish to start a Fintech or a Startup?
Pratik: It is very important for the aspirants to have adequate and proper personal financial planning. Most startups require sacrifices and the path is not easy, one will have to be prepared for a bumpy ride, with lots of ups and downs. Most of the time, there will be more downs than ups in the initial phases, so he or she has to be strong not only mentally but also in their own financial capacity.
Rejections are common in the journey, in fact one should never be complacent, even for us we have our fair share of rejections and some rather last minute pull outs. These are real events and they are tests for anyone who wants to dive into the startup path. You must be able to stomach all these, bounce back up and have good back up plans.