FinTech for Financial Inclusion with Jonathan Nøhr
by Seven Peaks on Dec 7, 2023 2:58:08 PM
With a vision of improving financial inclusion, Salary Hero is a startup that was founded two years ago with a primary focus on providing a holistic financial health platform to workers across Thailand, incl. Salary on Demand and Savings. It has now grown to a team of over 25 in Bangkok, Thailand and another 7 in a new office located in Hanoi, Vietnam. With over 100,000 employees onboarded and recent clients such as PCS and Indorama, Salary Hero stands out as a winner of numerous awards including Singapore FinTech Festival Winners 2023, AmCham CSR Excellence, and Inclusive FinTech 50 Winners 2022. Here are some insights from Jonathan, an INSEAD MBA graduate and former manager at Bain & Company.
A FinTech-related concept specific to Salary Hero is Earned Wage Access (EWA) – or as we call it, Salary on Demand – and is the idea that people should have more access and greater control over their own pay. Seamless, flexible pay is something that breaks down problems related to personal cash flow management; and if you put yourself in the shoes of the average individual, access to broader financial services are limited. You may or may not have access to basic financial products such as good banking products, loans, investments or insurance policies. What Salary Hero attempts to do is to curate and provide those services to the long tail of mass market consumers of wage earners. In one explicit example of that, we have built a partnership with Kiatnakin Phatra Financial Group’s KKP Dime! to provide greater access to better banking products and investments, including a high yielding interest savings account – providing significantly higher returns than the current minimum interest-bearing account rate.
Open banking is a concept that is slowly coming to South East Asia. Open banking can be defined as the ability for individuals to seamlessly or frictionlessly share their personal information with service providers, bringing more control over the middle layer. This could include basic data points like your bank account information, transaction history or statements, and data points that can be used to assess an individual’s overall financial health. It represents an API-first approach that enables financial inclusion, as well as the interoperability of various tech stacks including AI solutions, all inside a digital-first approach that is being increasingly adopted by traditional banking institutions.
My background has always been in Finance and Technology; I studied a combination of Computer Science and Business in London. I’ve always been interested in the intersection of the two disciplines and I strongly believe that technology can be a great driver of change and improvement of the human condition, especially when it is applied to problems related to financial inclusion.
I started my career at Credit Suisse and cut my teeth there. I then worked with Bain & Co., interacting with many financial institution clients, and I really started to understand what banks and insurance companies have to go through as they evolve to offer more digital-first services, managing transition risks and the bottom-line at the same time. We started to see a gap in services offered to the mass market population in South East Asia, because these large institutions find it difficult to reach mass consumers in an economically viable way.
That’s where entrepreneurship and innovation are able to make a real difference, and was the basis for founding Salary Hero. We are working towards aggregating these lower income consumers so that it reduces friction for bigger institutions to service them. Essentially, we become a distribution network, allowing these individuals to transfer from the informal to the formal financial sector, gaining access to better priced services and a broader suite of financial products.
“Technology can have a huge impact on people’s lives, and better digital financial products and a fully digital experience is providing financial inclusion to more people”
We embody the traditional sense of what a FinTech is; something that brings traditional financial products to users by leveraging new technology. Salary Hero is the financial health platform for workers across Thailand - and our mission is to improve the financial health of workers, with the ultimate goal of helping the average individual to achieve financial freedom. With Salary on Demand, we provide the first line of defense against financial emergencies. We also provide educational resources to help our consumers learn how to avoid financial pitfalls, and drive them to expand their savings. The longer-term roadmap is to provide further products that employees need, and tailor those products to their needs through financial institution partnerships - some examples include better access to insurance, virtual and physical cards, and remittance services.
We are a team of about 25 people in Thailand and 7 in Vietnam operating across three core pillars: Commercial, Product, and Technology.
While I focus on product and technology, my co-founder, Prabhav Rakhra, focuses more on the commercial aspects - including our best-in-class customer success teams, client services, and business development. The onboarding process for businesses is very straightforward - there’s usually a training session for the HR team to learn how to use the platform, and that’s it.
To be on our platform, you have to be an employed individual that has a bank account in Thailand. We currently don’t offer products that require detailed KYC of users, which can be a barrier for some workers wanting to access loans or insurance policies. This is a big challenge for financial inclusion, so we’re really looking out for innovations in the KYC area and RegTech, even though it is still something that is very nascent. I believe that over the next ten years or so this will change massively and digital identification will improve significantly. A great example of this is the national identification system implemented in India which has streamlined access to financial services significantly.
To make our business very clear, we have two target audiences: the companies we partner with, and the employees whom we provide products to. For employees, we strive to provide these individuals with great financial tools and products , essentially bridging them into the formal economy by providing them with fairly priced services. We are also focused on improving the availability of tools for our company partners to engage with their staff, and improve retention and productivity rates. We do this through data insights and engagement tools, allowing businesses to better understand their workforce.
“There are a huge number of general HR practices that are broken and can be improved massively with technology.”
You can argue that Salary Hero is a platform innovating the HR-tech space. There is huge demand for improved management and engagement of employees in Thailand. Thailand has a very tight labor market, and so there’s a huge fight for labor between employers. Employee retention is a big concern, and labor productivity is key - especially in labor intensive industries such as manufacturing, retail or facilities management. The financial instability of employees is the leading cause for employee loss – so our solutions for improving financial health become a tangible value add for employers from day 1.
“As the world becomes more versatile, you need to have a wider range of skills and skill sets in order to be competitive and successful”
Often when people talk about mentors, they talk about one individual who is able to guide you and tell you where to go. But, I think it’s an outdated way of looking at it. In my opinion, professionals shouldn’t find a mentor, but rather a personal “board of directors” – a group of individuals that you cultivate over a lifetime of relationships. For me personally, that includes advisors from a wide range of backgrounds, including technology, finance and product development.
In my personal approach, I have a handful of people I catch up with on a regular basis, seeking their advice and insights on differing areas of specialties. Some of them are investors, some are good friends - but one thing they all have in common is that they are subject matter experts, significantly smarter than me in their particular field. I’m not in business with any of these people, although I have worked with some previously. I’ve also set them up with my team, and they generously take the time to interact and guide my colleagues when necessary.
One of the unsung challenges you face as CEO, is that you’re always dealing with the “bad news”. You’re mainly putting out fires, and it can get really tiring in the day-to-day.
“Whilst the wins are amazing, the small challenges add up in terms of your mindset; hence it is important that you take a step back and look at the bigger picture.”
I wouldn’t have been able to do this without my co-founder and I couldn’t imagine doing it on my own. To be able to share and be brutally honest with someone, having a sounding board for things you can’t talk to your team about necessarily. My one advice to potential founders would be to find at least one co-founder to share the journey with.
Salary Hero’s mission revolves around financial inclusion - so for me, some of the most exciting trends in FinTech include the democratization of financial services and technology. When you start making these technologies and financial products available to lower income individuals, then you will start to see amazing developments in the macro trends of nations globally.
Check out Salary Hero’s One-Pager below for an introductory overview of the #1 Financial Health Platform for Employees.
Co-Founder and Managing Director
Jonathan has a wealth of experience in management consulting and the banking industry, previously holding positions at world-renowned Bain & Co. and Credit Suisse. An MBA graduate of INSEAD, he co-founded Salary Hero two years ago and has since gained numerous prestigious awards for FinTech and Service Excellence.