Convergence is key to fintech industry: Plux Ventures CEO

Convergence is key to fintech industry [Source : Gettyimagesbank]

South Korea’s financial technology (fintech) market is expanding to embrace startups from a diverse range of industries on the back of strong capital funds, according to Bae Sang-chul, chief executive officer of Plux Ventures.

Deeping Source Inc., a leader in data anonymizing technology, is one of the startups rising as a fintech company. It has the technology to analyze massive video data recorded on closed-circuit televisions (CCTVs) without the risk of privacy infringement.

Its technology turns CCTV images into a noise screen that blurs identification of individuals. Artificial intelligence (AI) recognizes image objects and provides text information.

It may seem that Deeping Source technology is useful to security or retail industries but it is a fintech company that can integrate finance.

Insurance companies, for example, can benefit from the technology as it may help them analyze black box data in a car accident which otherwise is banned by the personal information protection act.

The de-identification technology of Deeping Source also helps analyze CCTV images in crimes related to automated teller machines (ATMs) such as voice phishing. The technology can help identify suspects without customer information leak.

Plux Ventures CEO Bae, former senior investment manager at Samsung Venture Investment Corp., was behind investment in Deeping Source three years ago after seeing its potential to grow as a fintech company.

“Deeping Source wouldn’t be thought as a fintech company right off the top but it has potential when it merges with finance,” Bae said in an interview with Maeil Business Newspaper.

Plux Ventures, a venture capital firm [Source : Plux Ventures]

Plux Ventures, a venture capital firm that he founded in January last year, invests in fintech convergence sector. The firm recently created a 30 billion won ($24.1 million) fintech innovation fund.

“Convergence” is key in fintech investment, Bae noted.

“Starbucks introduced an app payment service and ride-hailing giant Grab Holdings Inc. set up Grab Financial Group that provides loans and payments,” the CEO said. “Any company in any field will eventually be associated with finance as it grows.”

The same applies to startups. Companies will be able to accelerate growth if they integrate business with finance.

“Our role is to help startups open up to the financial sector and seek faster growth,” he said.

Investment in non-financial startups offers an opportunity for financial companies to reach out to a new customer base in a wide range of fields. It is also an opportunity to expand the scope of financial industry through convergence, according to Bae.

The first investment target of the fund managed by Mirae Asset Securities and Plux Ventures was Village Baby, operator of Baby Billy app that provides childcare information to first-time parents. The fund invested 1 billion won in Village Baby to secure 2.5 percent stake.

“Insurers sell insurance for unborn babies to pregnant women,” Bae said. “They can join hands with Baby Village for related services.”