Fintech is a Broad Term

John J. Schaub 

Sept 1, 2022 

When people use the term FinTech they often are thinking of a very narrow segment of companies focused directly on the movement of funds and the provision of financial services. The fact is though that this narrow definition misses the vast bulk of technology companies that are making a significant portion or even the majority of their revenue from the provision of Financial Services. 

As a simple example look at Pieza a Singapore based startup I've recently become involved with. At first glance Pieza looks like a simple e-commerce play targeting the automotive aftermarket in the Philippines but when you dig into their roadmap you very quickly realise that they are as much if not more a FinTech company as they are an e-commerce marketplace which is why aside from an outstanding founding team they immediately sparked my interest.

When complete Pieza will be the platform for the automotive sector in the Philippines providing a full lifecycle solution for automotive consumers and retailers in a country of 110 million people. From the acquisition of a car via purchase or lease to the ongoing maintenance and insurance and finally resale Pieza will seamlessly integrate and simplify all aspects of the automotive marketplace. This is a bold goal especially in a country with a wildy fragmented financial system and rapidly growing automobile ownership. To get there Pieza needs to successfully address a number of pain points the bulk of which are FinTech or FinTech adjacent.

First up Pieza needed a way to let consumers pay for products and get funds to their suppliers. In the developed world building this solution would be as simple as connecting to a few APIs and would take maybe a few days but in the developing world it is wildly more difficult and requires that you also support cash transactions online which takes considerable effort and is absolutely in the weeds FinTech work.

With step one complete Pieza can move to step two which involves building out the partner network of retailers. Out of the gate Pieza is focused on small mom and pop auto parts retail stores. This sort of marketplace play is not FinTech but it quickly circles back to a FinTech problem when you realise that essentially all large purchases will need to be financed via a lending solution which Pieza initially provides via partnerships with existing lenders. For the initial automotive part marketplace most transactions will be straightforward and only a small percentage will require financing so these partnerships will represent a small portion of Pieza’s early revenues but this will change rapidly as they move into step three.

In step three financing partnerships will very quickly grow to represent the bulk of Pieza’s revenue as they expand their marketplace into the vastly higher value world of automobile purchases, maintenance, insurance and roadside assistance. The potential revenue available via financing large sticker price purchases such as automobiles in a high interest environment like the Philippines is staggering and at this step Pieza will for all purposes be a FinTech company. Going further by controlling the consumer relationship Pieza will be in a position to either build their own lending arm or negotiate very favourable terms with an existing provider.

Finally step four is to gain full control of the entire automotive lifecycle. By facilitating the purchase, maintenance and insurance of the automobile Pieza is in a fantastic position to build out detailed reporting on a specific car and consumer which can both allow for a much more robust resale experience than currently exists but also allow highly targeted marketing to repeat consumers the vast majority of which will make use of their financing services. 

So when you get down to it, even a company that at first glance appears to be unrelated to FinTech can upon closer examination be almost a wholly FinTech player with the bulk of their revenue coming from traditional financial services facilitated by tech.