A renowned leader in the banking and finance world, John Harvie's extensive career spans Deutsche Bank, JP Morgan, Ernst & Young, and GFI Group. He’s now the CFO at SC Ventures, the innovation, fintech investment, and ventures arm of Standard Chartered Bank.

Welcome to Payments Powerhouses, John. I heard that you recently moved back to the UK from Singapore. How does the fintech scene in the two regions compare?

John: I miss Singapore – it's an amazing place – but London is still buzzing. I think the market in Europe is a little bit more mature; it’s more established with a lot more VCs and a lot more money. But looking at Singapore: it's a young, vibrant market with many capabilities. During my time in Singapore, I got to know quite a lot of entrepreneurs and founders of businesses, and they've got a different way of thinking compared to those in Europe. There's a sort of mass market appeal in Southeast Asia and the rest of Asia versus the UK and Europe, where they're looking at more established markets and trying to do things differently. So there's a different dynamic, different buzz, but still great markets to be in.

Before we dive into everything SC Ventures, could you tell us more about your career journey thus far?

If I were to describe it, it would be, “Take a path less trodden.” And what I mean is to take roles that are a bit more ‘exotic’. When I started out as an accountant, it gave me great insights into all the nuances of finance: how businesses are run, how they're reported, and how taxes work, for example.

As I journeyed through corporate finance, I learned about making deals at one of the big four, EY – how M&As, flotations, and buying and selling work. The experience and knowledge built a good grounding for the rest of my career, and it has taken me through various banks, including Barclays, Deutsche Bank, and JP Morgan, all in a CFO capacity. As you go through your career, moving from one job to another, you always take away big learnings or a series of learnings that you can take to the next role or develop further. And I think because I've got this varied skill set and broad technical capability, it's served me very well in my current role where I deal with end-to-end finance.

Prior to SC Ventures, were you in a different role at Standard Chartered?

Yes, I started my career in the IT world at Standard Chartered in Singapore, looking after their infrastructure. I was doing that for a number of years and began having conversations with our CEO, who mentioned that he was starting a new venture-building arm and asked if I’d be interested in it. That was five years ago; since then, we've grown it from strength to strength. From basically a cost centre to a division in the bank within a very short period, it's been a very busy scaled-up journey.

Can you share more about SC Ventures and its purpose?

The main premise is that if we don’t disrupt ourselves, somebody might do it for us. An incumbent bank such as ourselves faces a series of challenges: we’re heavily regulated, not as nimble as we could be, and we've got a series of challenger banks looking to eat our lunch. A lot of fintechs are also looking at our capabilities. So, if we don't build those capabilities ourselves, we may just get taken over or have people eat our market share.

We’ve set up a series of ventures to help us get that competitive edge. We have a fund that looks at minority investments; we buy small stakes in startups with the aim of gaining proprietary access and first-user advantage to get the edge. We’ve also set up our own businesses and established partnerships with people and companies that can help us scale and explore new ideas and ways of doing business that change how we do banking. We’ve had considerable success over the last few years and even emulate what we do in the market with ourselves; we’re not afraid to disrupt ourselves and our business models in the process.

How different is SC Ventures from traditional VCs, having the support of Standard Chartered Bank?

We definitely have a huge advantage, having the bank behind us. The key difference between a traditional VC and what we are as a corporate VC is we can’t take a ‘fake it till you make it’ approach. We’re a heavily regulated bank, so we have to pay a lot more attention to detail in everything we do; when you look under the hood, we have to have all the right things in all the right places.

Another way we’re different from VCs is we invest more in ourselves to start with and then slowly divest, whereas a VC would typically take a smaller stake. So it is a different model, where we build things in a more proprietary manner and with more active management, and it takes a little bit longer. With more risk frameworks and governance, we’ve built up a strong yet nimble venture in its own right.

Can you tell us about some ventures that are in SC Ventures’ portfolio?

Looking at some of the businesses we’ve got – in crypto, for example, we've got two firms in the UK: Zodia Custody and Zodia Markets. Why would a bank go into crypto? Because we believe it's a strong asset class over time. We’ve seen recent volatility, but we built those businesses from scratch and with partners that have given us an edge in the market. We also have an SME platform called Solv that we built with some co-investors, enabling SMEs to participate in an open and inclusive trade ecosystem. So, we have a unique way of doing the same business, but differently with new technology, to be able to serve long-time and new customers better.

Our ventures are predominantly based in Singapore, but we’re branching out into new markets. We have a strong presence in India with Solv, and we’ve also got a strong and growing presence in Kenya. And why Kenya? Well, if you look at the market footprint, Silicon Savannah has over 100 million customers. So we have to have a presence there. We've also got partnerships in Ireland with CurrencyFair and a strong presence with our head office in the UK. We started in Singapore and now have six offices spanning the world, with different businesses in different locations. So, we’re growing globally and keeping a close eye on new opportunities as we go along.

As we all know, today’s economic climate has certainly changed. How does that impact SC Ventures and its focus?

In terms of the current macroeconomic climate, you just have to look at the news – there are ups and downs, the war in Ukraine, high prices, inflation, etc. We’re not immune to that.

Now, the thesis of what we do still is in banking. Nothing has changed; we continue to look into things that give us capability in banking, such as AI and compliance tools, as well as getting new customer acquisition and servicing customers and our partners in a different way.

We have a strong financial presence, but we also look at new opportunities as and when they come through. I think we have to be cognizant of the wider macroeconomic climate, what funding is available, and the challenges out there, and we have to respond to those. Like any other business, we have to be very commercial in what we do, but with those risks and challenges always comes opportunity. And I think we're in a great place to capitalise on that.

Shifting our focus to Singapore – Trust Bank was recently launched, backed by a unique partnership between Standard Chartered Bank and Fairprice Group. Why target a developed city like Singapore and not an emerging market?

We started on a similar path as with Mox Bank in Hong Kong, where we have a strong presence. Going back to what I mentioned earlier, we're quite happy to disrupt ourselves in a market, and Singapore is another market in which we have a strong presence.

And why with NTUC? Similar to our partners in Mox Bank, they provide their customer base, and we provide the banking access, and in making these partnerships, we can then get scale. We can service our partners’ customers, our existing customers, as well as new customers, in a much more efficient way.

If you look at how you do banking, look at the phone in your hand – that’s how most people do business now. So, we have to respond to that because very few people would go into a brick-and-mortar branch these days unless they have to fill in a form. We must develop that online presence and build that capability for the next generation. It's a great launchpad for further developments, but partnering with an organisation like NTUC allows us to tap into their presence in Singapore and grow from great strength to strength in a very short span of time. So, it was a good deal, shall we say.

Consumers who shop at an NTUC Fairprice supermarket using Trust Bank enjoy many benefits, making it a good consumer experience. It’s now very important to make sure that the customer experience is unique and special because people can quickly change between a wallet app and a new bank, and getting the right technology is key.

In recent years, crypto has been gaining prominence and becoming more acceptable in the public sector, and we have seen large players dabbling in it as well. What crypto services and products does Standard Chartered offer, and what has the take-up been like thus far?

The size of the crypto market expands and contracts depending on which day of the week you look at it. Nonetheless, the market is currently about a trillion dollars, which is an awful lot of money. There's a big institutional presence there that we think we can capitalise on; companies, hedge funds, and VCs are all holding a lot of digital assets, but we have to think about where they will be held.

We thought if corporates are holding a large amount of digital assets, and Standard Chartered, as a bank with its 160-year history, can offer trust and assurance, we'll be able to park those assets in our digital capability. Hence, Zodia Custody was born. It got its AML [Anti-Money Laundering] licence a while back and has started to pick up customers, and it's doing rather well.

Off the back of that, Zodia Markets looks at the trading aspect, where customers want to buy and sell crypto assets. And it's a huge market, with over 12,000 cryptocurrencies out there. We won’t offer to all of them because there's a large tail, but institutional clients like to trade in the big ones, and there's lots of activity in that market. So, complementing those two businesses with the custody and trading businesses works really well.

Now, why would a bank such as Standard Chartered get into that? It comes back to why SC Ventures was born; we look at the new asset classes and ways of doing business, and crypto is one of those areas. If we can provide assurance and trust in what is perceived as a volatile or risky market, we give people confidence in doing business with us. The recent volatility is a testament that there will be a flight to quality and those who are safe and trusted.

Currently, our crypto services are offered only in the UK and Europe, but they will grow over time. Another thing we'll see is regulatory adoption or new regulations coming in. As this market grows and develops, companies like Zodia will capitalise on the regulatory framework really well.

How has the recent collapse of FTX, one of the top three major crypto exchanges in the world, impacted the industry?

If you look throughout history, it's easy to point fingers at one market. Especially since the market is lightly regulated, there are bound to be participants who don't play by the rules or skimp on various ways of doing business. It's part of the market, and what we try to do is add assurance to that. The fall of FTX hasn’t helped, but I think there's still an opportunity out there.

Crypto is still a very young market; it's about 13 or 14 years old and has only taken off in the last five years. If you add NFTs into the equation and other possible developments in the next five years, and if you’re not in that space to be able to capitalise on it, you will be behind the curve. So, by building this capability in these businesses, we’re in that space to provide assurance. Of course, going back to the sentiment on the wider economic climate, we will see some volatility, and no one will be immune. But in providing assurance and trust, I think we’ll weather any storms out there.

It’s hard to say if this incident might set the industry back by a few years. If you look at the number of users that have adopted crypto, the figures range between 300 million and 500 million. That’s a lot of people in the world that are using it. Over time, you will see wider adoption, especially as countries and central banks start issuing crypto assets themselves. So, it's definitely a thing to keep your eye on.

On the flip side, there's always a market sentiment that it'll be forgotten tomorrow, and we’ll move on to the next thing. It's very fast-paced. I look at my two children and how they value money, and that's the future generation we're probably building for. A safe accountant like me will probably be a bit more conservative, but my children are probably the ones we need to ask questions to.

Aside from crypto, are there any other sectors of fintech that SC Ventures is looking into or that you’re excited about?

We look at digital banking and lifestyles – we've got digital banks, as well as lifestyle apps. In Singapore, we have CardsPal and Autumn, a rewards app and a health and wealth platform. We look at building digital asset businesses and investing in companies like Ripple.

We look at e-commerce and servicing SMEs – we have a business called Standard Chartered Nexus in Indonesia, where we partnered with Bukalapak to provide core banking services in that market.

We also invest in things that complement banking as well. We invest minority stakes in growing and emerging businesses to provide capabilities. We’ve also invested in Thought Machine, a core banking platform, and Silent Eight, a compliance tool.

We're trying to hedge our bets within the wider banking ecosystem and deal with new challenges. The onset of quantum may become a lot more prominent in 10 or 15 years. And the market is very fast-paced and moving, so we have to be very agile in this space to look at new opportunities, determine what the impact is for the wider financial community and us, and assess whether or not to seize those opportunities.

A few years ago, you remarked, “It's hard to make money from data.” What was the context of that statement, and do you still stand by it today?

I made that statement at an Institute of Chartered Accountants event. You can't capitalise data if you make it. When people think of data-driven decisions, it refers to the management of information in a business. Now, it's very strong and powerful, but accountants can't place a value on it unless it’s sold. So, that was the original context.

Just take your phone, for example. How many tens of thousands of pictures do you have on your phone that you don't look at? There's a temptation to have too much data, but that becomes meaningless. If data comes in a big bag and it's all not joined up, it's not much use. But if you join the dots, then it can be powerful. There are plenty of databases with replication of data, but only the smart and savvy will be able to make significant gains from those. The likes of Google, Meta, and data agencies such as Experian use a lot of data and have found a way to structure it in a way. There are new technologies that can join databases together to tell those stories; Power BI is a powerful tool that everyone can access.

Over time, you'll see the usefulness creep in, but I still stand behind what I said, that it’s hard to make money out of data. It's useful to have it, but the challenge lies in trying to interpret, analyse and structure it.

Having worked with startups and ventures, what would be your advice for up-and-coming companies trying to survive in this economy?

It’s easy to get carried away with the hype and positive sentiments. Still, there's always an underlying economic reality to ensure revenues and costs are matched, and you've got that funding. Even a small startup needs to have liquidity and a good business model. Also, it’s important to have the ability to be nimble – you can rigidly execute a plan, but having the ability to respond in a flexible way will serve small companies well.

Another piece of advice is to look at opportunities. There are always new opportunities, whether in a downturn or an upturn. Be able to assess those quickly, respond to them, and be flexible in your approach. Where there's fear or where there's an opportunity, you can capitalise on it. For up-and-coming entrepreneurs or business leaders: don't be afraid. This is an area for the brave, and it does take an awful lot of self-belief and confidence because people will knock you, doubt you, and come up with negative sentiments along the way. But if you have a strong conviction and believe in it, carry it through.

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Payments Powerhouses is a monthly editorial series interviewing the movers and shakers of the payments and wider fintech industry in Southeast Asia and beyond. If you’d like to be featured on Payments Powerhouses, reach out to us here.