MIKKO PEREZ IS THE FOUNDER AND CEO OF AYANNAH – A LEADING PROVIDER OF DIGITAL FINANCIAL SERVICES TO THE WORLD’S EMERGING MIDDLE CLASS, MOST OF WHOM ARE MIGRANTS OR UNBANKED COMING FROM THE BASE OF THE PYRAMID.
Human Asia eagerly spoke to Mikko recently.
PLEASE EXPLAIN ABOUT THE IDEAS BEHIND AYANNAH.
Mikko: Ayannah’s mission is to make financial services more affordable and accessible to the world’s emerging middle class, most of whom are in emerging markets or migrants in wealthy countries. This is a young and growing demographic segment that is now enjoying rising incomes. However, most of them remain unbanked even if they are increasingly economically active.
HOW DOES IT ACTUALLY WORK? WHAT DOES AYANNAH DO TO HELP THESE PEOPLE?
Mikko: Ayannah provides financial service providers with a way to reach this growing middle class through a “click and mortar” or “omni-channel approach”. While there is an increasing number of these emerging middle class customers who are online – mostly through mobile phones – the vast majority remain either unbanked or offline or both.
Ayannah has developed and deployed a suite of award-winning and market-proven software applications that allow financial service providers to serve their current customers better and find new customers via the web, via mobile or over the counter via agents.
Right now, we focus on topping up of prepaid mobile credits and mobile wallets, remittances, bills payment, payments for online purchases, insurance premium payments and soon loans and investments which include stocks and bonds. Broadly speaking, we are working to promote financial inclusion – we want to give access to financial services that improve their lives.
WHAT ARE THE RISKS ASSOCIATED WITH THIS?
Mikko: Since we operate online, we face similar security risks of running IT networks and e-commerce. However, we do have a very competent systems and network administration team and we are always working hard to comply with best practices in IT and cyber security.
CAN YOU SHARE MORE ABOUT HOW THE FEATURES OF YOUR SENDAH SERVICES ARE APPLIED TO THE BOTTOM OF THE PYRAMID?
Mikko: Our Sendah software services provide multiple payment options – not just credit card payment. We accept payments via debit cards or via collecting agents. For notification, we use SMS since many of our customers are not always online but can receive SMS. Our Android app works without internet connectivity (don’t ask how we do it!) because many of our agents and customers do not have access to mobile data!
WITHIN THE MICRO PAYMENTS LANDSCAPE, WHERE HAS SENDAH EXPANDED TO?
Mikko: To be honest, we do not see ourselves primarily as a payment company. We see payments as a necessary but not the only component of our stack of services. We have deployed payment solutions to support our other commerce solutions.
WHAT IS YOUR VISION FOR AYANNAH IN THE FUTURE?
Mikko: Our vision is to provide a full stack of digital financial services to the world’s emerging middle class. Starting in the Philippines, we are addressing the needs and aspirations of the next three billion people – many of them are below the age of 30 and will soon need affordable and accessible financial services such as remittances, insurance and savings and loans to improve their quality of life.
After having successfully launched and grown our innovative Sendah Remit and Sendah Direct remittance service, we are now rapidly adding new products such as affordable health insurance, payments for online purchases, etc. And very soon, we will launch KayaCredit, a risk-based credit scoring service that will enable qualified but underserved customers to quickly access credit, insurance and investment products that are appropriate for their needs and capabilities.
In the same way, KayaCredit will allow banks, lenders, insurers and asset managers with a new and effective way to find new customers. We are using the latest machine learning/artificial intelligence technologies to analyze our growing set of alternative payment or transaction data (prepaid top ups, remittances, insurance premiums, bills payments, etc.) to match qualified and responsible customers to financial service providers.
We are also expanding to Vietnam and Indonesia this year to complete our coverage of “V.I.P” (Vietnam, Indonesia, Philippines). VIP is home to 500 million VIPs all with median age below 30 years and with rising incomes. We are also expanding to South Asia (India, Pakistan and Bangladesh) through their migrant communities. Eventually, we would like to be a leading provider of digital financial services for the next three billion people in the world’s emerging middle class.
MIKKO, TELL US MORE ABOUT YOUR BACKGROUND PRIOR TO FOUNDING AYANNAH?
Mikko: I come from a middle class family and have always been entrepreneurial. However, growing up in an emerging market, it was hard to ignore the poverty and miserable human condition. So right after college, I spent the first few years of my professional career as a community organizer working with poor communities in rural Philippines.
However, I was always challenged about how business can be a force for social impact and I started entrepreneurial ventures to provide jobs and livelihood to rural communities. But I also realized that that technology and global finance could be used to make a difference so I went to Harvard Business School and worked as an investment banker in Silicon Valley and a private equity manager to learn how to raise and deploy capital for impact.
So I see Ayannah as a way of combining my experience working with poor communities with finance and technology to build a business that will generate superior absolute returns for investors while making a difference in the lives of hundreds of millions of people.
WHAT OTHER AREAS OF TECHNOLOGY ARE OF INTEREST TO YOU?
Mikko: Because we are in the fintech space, I am closely watching developments in blockchain and cryptocurrency technologies to see if there are use cases that we can apply to further enhance our products and services. But I am really much more interested with the potential of artificial intelligence. I believe that AI will have a profound impact on all aspects of human society and can be a powerful tool to help improve lives.
HOW ARE YOU AND YOUR LEADERSHIP TEAM KEEPING THAT ENTREPRENEURIAL SPIRIT FROM THE EARLY DAYS IN PLACE?
Mikko: Well, we are still small and scrappy and we expect our leadership team to work under conditions of limited resources. At Harvard Business School, entrepreneurship is defined as “the pursuit of opportunity beyond resources controlled.” We expect our leadership to have the following attributes – we have to be Perfectionists (committed to excellence), we have to be Problem Solvers (always looking to solve problems for our customers), we have to be Proactive (thinking like chess players – five steps ahead), we have to be Persuasive (having great ideas is not enough, we need to motivate people to buy in), we have to be Persistent (“behind every overnight success is a lifetime of effort”) and lastly, we need to be Passionate (we need to wake up in the morning wanting to make a difference).
LOOKING BACK, WHAT DO YOU SEE AS THE BIGGEST LESSON FROM AYANNAH’S STORY?
Mikko: The biggest lesson is to really understand the needs and aspirations of your customers, even more than they do. This is the only way to build a successful business.
WHAT TIPS WOULD YOU GIVE FOR ASPIRING ENTREPRENEURS WHO WANT TO BUILD ANY FINTECH/PAYTECH STARTUPS?
Mikko: Answering this question would take an entire semester at Harvard Business School. Anyway, let me give a few tips:
Don’t try this unless you cover all your downside risk. Don’t quit your day job until you are sure you got a winner.
Have co-founders who are committed and have complimentary skill set. Solve a big problem that a lot of people will be willing and able to pay you for.
Stay scrappy/bootstrap until you get to “product-market fit”
Once you have traction and are scaling rapidly, build a moat around your business (as there is always someone smarter and scrappier who will try to steal your customers)
You can visit Ayannah at http://www.ayannah.com/
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