Our new Disruption by Blockchain series aims to highlight companies that are leveraging the incredible potential of blockchain technology to disrupt and revolutionize their industry. Through one on one interviews, we'll speak directly with industry leaders to cut beyond the hype and get directly to the heart of practical use cases and examples of how it will change the world, one industry at a time.
The following is an interview we recently had with Robin Lee, CEO of HelloGold.
1. What’s the history of HelloGold?
RL: I worked in Asia in 1997 during the Asian financial crisis and I saw at first-hand how “bad things can happen to good people” at no fault of their own. As a result of the 1997 crisis, the man in the street saw their domestic currencies hit by extreme devaluation – in the case of both the Thai baht and the Malaysian ringgit, this was in excess of 50%; in Indonesia, the rupiah went from 2,600 to the dollar to over 14,000 to the dollar.
For someone who was earning the equivalent of US$1,500 a month, he woke up one morning earning the equivalent of $700 a month with a devastating effect on how he could provide for his family. The inequitable impact of these events on the people who were least able to fend themselves and their families left a lasting impression in my mind. They suffered disproportionately through no fault of their own, other than the simple, unavoidable fact that they were financially excluded from the products that were available to protect the more affluent.
Fast forwarding to 2010 and up to 2015, I was the Chief Financial Officer at the World Gold Council where I was also the principal accounting officer for the world’s largest private gold fund with US$30+b AUM. I saw how High Net Worth Investors and funds alike had the ability to use gold both to protect their wealth and as a form of collateral to get better financing deals.
With the help of technology, the digitisation of real assets, starting with gold, will enable everyone, everywhere to enjoy these same features that gold offers to the wealthy. With HelloGold’s GOLDX everyone will only need the equivalent of a fraction of a dollar to save through gold (ERC20 tokens work to 18dp). And once they save enough in gold, they will be able to pledge it as collateral to borrow at lower interest rates and without the need for credit history. In short, everyone can save, and everyone can have access to affordable financing. Democratisation through digitisation.
At HelloGold we have started this journey in 2016. Our mobile app already enables ordinary Malaysians to buy physical investment-grade gold starting with as little as RM1. And we have partnered with two major corporates, Aeon Credit and Axiata, to develop our real asset proposition.
The launch of HelloGold’s digital gold-backed token, GOLDX, enables us to take our offer to another level. It allows us to accelerate financial inclusion across the world. HelloGold wants technology to truly democratise gold – to empower every man, woman, and child with financial products to overcome the fundamental financial challenges that remain prevalent in many emerging markets, both in Asia and elsewhere.
2. Who are the founders and key team members?
RL: HelloGold now has a team of 30+ staff from the gold industry, financial services, marketing, technology from Africa, Asia and Europe.
Robin Lee, Co-Founder and CEO
He is the former CFO of the World Gold Council and brings a wealth of knowledge and contacts about the gold market. He was the principal accounting officer for SPDR Gold Trust (‘GLD’), the world’s largest ETF, which held over US$30billion in assets under management. He has supported the Singapore government in its developing the gold hub strategy which led to the launch of the world’s first exchange traded, wholesale kilo gold contract. Robin developed a new sovereign gold-backed bond concept to enable countries to lower sovereign debt yields through securitization of central bank gold reserves. He has also worked with the Industrial and Commerce Bank of China to introduce a gold savings program which generated annual sales of $6.5b.
Ridwan Abdullah, Co-Founder and Business Development
He has spent the last 7 years in AEON Group Malaysia in the retail and financial services industry. He is the former Head of Special Projects at AEON Credit Service (Malaysia) Bhd. where he spent most of his time in strategy and partnership development. Prior to AEON Credit, Ridwan spent a number of years in the retail sector for AEON Co. (M) Bhd., where he worked in supply chain management and set up the project team for AEON’s first retail store expansion into Indonesia. Ridwan is currently completing an Executive-MBA at Columbia Business School & London Business School.
Wykeen Seet, CTO
He was previously VP at Bangkok Bank in Thailand where he led multiple projects including Mobile Banking, B2B Gateway, International Remittance, and Credit Related Systems over a period of 8 years. Prior to Bangkok Bank, he worked as a software engineer at Digital Applications International Limited in the UK where he designed and implemented customer software changes/enhancements of Warehouse Management Systems for major retail clients such as Sainsburys, Tesco, & Woolworths. He has a Ph.D. in Computer Science from the University of Manchester where he completed his Master of Philosophy (MPhil) in Computer Science and received a 1st class in Bachelors of Science.
Dave Appleton, Blockchain
He has more than 40 years of experience working as an engineer in the tech sector, starting from his time at University of London through to being VP of Engineering at Tembusu Systems immediately prior to HelloGold. At Tembusu Dave worked on a blockchain system that combined auditability with anonymity. Most of Dave’s time has been spent working for startups, mostly in SE Asia, including at Proteq Technologies (Singapore), being Founder/Owner of Calistra Research Labs (developing advanced automated inspection systems) and Pirate 3D where he defined test procedures for a crowdfunded 3D printer. Over the years, he has become proficient in many areas including low-level hardware and software, hardware test systems design, image processing and blockchain technology. Dave has used multiple languages professionally, including C, C++, C#, Pascal, Modula-2, PHP, Go, Java, SQL, various test languages, Basic, Objective-C, Assembly Language (Various), Microcode and PowerBuilder; as well as Haskell, Scala, Verilog and Logo for fun. Based on this experience, Dave is an active speaker at conferences and tutor/mentor to students and the tech community at large, conducting classes at clubs, hackerspaces, and colleges. Dave has BSc in Engineering (Electronics) from University of London and MSc in Management of Technology from National University of Singapore.
TC Wu, Technology
Manuel Ho, CMO
He was previously the Head of Customer Marketing at the Royal Bank Scotland Group (RBSG) and Strategy Director at Wolff Olins PLC. He led the award-winning Vivo Brazil new-brand project, achieving 80% awareness 2 days post-launch and acquiring 5m customers in the first 6 months. At RBSG he re-engineered NatWest’s $1bn current account product portfolio and created the $300m customer strategy that led to the Bank’s product and brand repositioning initiative. Since then he has led various Fintech initiatives in London and Singapore and advised A*Star, the S$7bn R&D arm of the Singaporean Government. He holds an MBA from the Kellogg Graduate School of Management.
Joshua Ambrose, Operations
He was the Head of Contact Center Operations for and was one of the pioneers that started up AirAsia BIG (Loyalty, Prepaid MasterCard & Visa). With 20 years of Operational experience, he was part of the team that set up the Operations of AirAsia BIG in Malaysia from the ground up and later expanded that business to Indonesia and Thailand. His experience in Operations and knowledge of Information Technology coupled together provides him with a depth and breadth of experience when it comes to implementing Customer Relationship Management systems, drawing out and implementing processes to drive excellence and efficiency. AirAsia BIG has more than 15 million customers across more than 40 countries. He has also successfully revamped the Operations in Zalora and FoodPanda Malaysia when he was attached to Rocket Internet as the Head of Operations, increasing productivity while implementing cost-saving measures.
Ita Jalaluddin, Product Development
She has worked in digital marketing and communications strategies for Bursa Malaysia, Tourism Malaysia, OSK, Standard Chartered and Ministry of Finance Malaysia. As Digital Director at TBWA, she developed a stock market simulation exercise that harnessed 200,000 young urban professionals, engaging them to invest in Bursa Malaysia. She was responsible for launching Tourism Malaysia’s Truly Asia global online consumer media campaign, which raised tourism arrivals by 19.5%, surpassing the 20.1 million target in 2007 – 2008. While at Boston based multi-platform web retailer Karmaloop, she established a wide range of media and brand relationships through the creation of a propriety affiliate program that produced over 1,000 co-branded partnerships. More recently at GDP Architects she designed and implemented a grass roots CSR program, focusing on the rollout of urban libraries and affordable student housing in Kuala Lumpur. This is in partnership with Think City, Khazanah Nasional’s urban regeneration initiative. Ita holds a BA in International Relations from Boston University and an MA in Design History from the Royal College of Art.
Roger Ward, Thailand/Myanmar Expansion
He is a strategy consultant, having worked at Bain and Deloitte. He also has experience working in the gold industry, having most recently worked at the World Gold Council developing strategy and managing complex projects in London, Singapore, and New York. This included supporting the Singapore government in developing the gold hub strategy which led to the launch of the world’s first exchange-traded, wholesale kilo gold contract as well as providing support to the world’s largest gold fund, SPDR GLD. Roger will manage the product development (inc. partnership relationships) and deal with day-to-day operational issues. In addition, Roger will provide general management support across the business and gold industry knowledge and experience. Roger has a First Class MA Hons in History from the University of Edinburgh.
3. What problem are you solving? Who are you solving it for?
RL: Our target market is faced with three key financial problems
Over-reliance on cash savings which means that inflation erodes their hard earning savings
– 42% of household savings is in cash (source: Manulife on Asia)
– Cash savings yield a less than 0.5% return (source: various banks)
– In contrast, gold historically generates returns that is consistent with long-term inflation eg over 5y period, gold returns around 8% against the Malaysian Ringgit
Lack of access to affordable personal credit which means that these same consumers have had to turn to expensive forms of financing
– Less than 20% of loans granted to individuals were from financial institutions (Source: World Bank)
– 15% – 25% borrowing costs for unsecured loans; and more if from informal sources
– In contrast, HelloGold will offer our customers loans against their gold at 30% below market rates
Traditional remittance is costly
– Average transaction cost of 5% – 10% assuming minimum transaction of RM800 (Source: World Bank)
– Average settlement cycle of 2 – 5 days (Source: World Bank)
– HelloGold will offer our customers instant gold remittance at no cost to their friends and family
4. What is your solution to this problem?
RL: HelloGold aims to address major financial product gaps in emerging economies targeting the mass market consumer. Our initial focus is on building innovative real asset-backed financial products, starting with gold, that are simple, affordable (from as low as 1 unit of local currency) and accessible (through mobile apps on smartphones) for everyone, 24X7. With HelloGold, everyone will have access to a better savings product (through saving with investment-grade gold) and to more affordable financing (by using their investment grade gold as collateral for loan applications). We will also enable our customer to transfer their gold across borders instantly and at no cost.
5. Why is your industry ripe for disruption?
RL: HelloGold’s product is different from those typically offered by traditional financial providers such as banks because we have developed our products with our customers in mind – to address three key factors: affordability, suitability, and accessibility.
Compared to most banks, HelloGold’s customers own only allocated gold. This obliges HelloGold’s custodian to hold the customers’ gold as their outright property, under a custodial or safe-keeping contract. Under well-established law, a liquidator must return the formal property to the customer if any of the parties fail. In contrast, when a bank sells unallocated gold, the customer becomes a creditor – i.e. the bank owes you gold which it may not physically have
HelloGold’s gold is fully insured against all risks including loss or theft. In contrast, gold held by banks are not typically insured by the banking industry’s insurance program.
HelloGold is the first Shariah-compliant gold product in the world and is fully compliant with the Accounting and Auditing Organisation for Islamic Financial Institutions’ (AAOIFI) standard on gold-based products. In contrast, most banks do not provide gold products that are compliant with this international standard.
HelloGold’s minimum purchase of 1 unit of local currency is significantly more affordable than most banks which typically require a minimum transaction value of 1g and in multiples of whole grams
HelloGold allows a minimum physical redemption of 1 gram. In contrast, some banks do not allow physical redemption while others only allow physical redemption of a minimum of 100 grams
HelloGold is available through a mobile application on a 24/7 basis. Most banks only enable customers to buy and sell gold during office hours. Some operate extended hours but none provide a 24/7 service.
With the launch of the gold-backed personal finance product, HelloGold will offer customers the ability to use their gold as a form of collateral at market-beating rates. No bank currently bundles its gold investment account with a lending product.
In 2017, HelloGold enabled its customers to transfer gold between accounts at no cost. No bank provides this facility.
6. What’s the future of your industry?
Prediction #1: Mass-market friendly blockchain applications.
Prediction #2: Digitisation of financial products that will accelerate true democratisation of the financial markets.
Prediction #3: Acceleration of a sharing economy where everyone can have a stake in global enterprises and solutions.