Raghav Kapoor, a passionate advocate for technology wholeheartedly believes in its power to solve complex problems. Prior to entering the entrepreneurship space, Raghav was a Managing Director at Religare Capital Markets, preceded by his role as Vice President of Regional Equities Sales at Citigroup.
With his passion for technology and investing, Raghav co-founded Smartkarma with a vision to bring simplicity, efficiency and transparency to the investing world.
As Smartkarma’s co-founder, Raghav continues to maintain a relentless pursuit for perfection, focusing on product strategy and technology development.
Read on to see his invaluable insights on: FinTech, his vision for Smartkarma and the challenges of being an entrepreneur:
CL: Fintech platforms tackle specific verticals of the bank and improve those services for customers – this has been the case with payments, currency exchange, lending – what FinTech trend(s) are you most excited to see this 2016?
RK: Reinvention of the traditional financial sector is underway. This is a trillion-dollar opportunity, and it is heartening to see regulators pave way for change on an unprecedented scale. This is confirmed close to home in Singapore.
While leadership has emerged in certain areas of bank-sector disintermediation, we notice that certain other areas are relatively unchanged. A prominent one that we focus on is Capital Markets. This sits down-right-center in an investment bank, and has long been the source of high-margin business. Given the nuanced nature of underlying activity, and sophisticated audience, this area has been left largely unchanged – often described by me as the “rain-shadow” of fintech.
When we speak to our stakeholders, we describe what we see as a sweeping change across capital markets, as they get replaced by digital marketplaces – bringing efficiency, transparency and collaboration in a space that’s long suffered from conflicts, obfuscated pricing and bloated cost structures. This would also mean a shift from agency-principal to peer-to-peer networks.
Existing models are broken. The cracks are very visible. We saw Nomura announce a complete exit from European equity capital markets this week. Earlier in January, we saw Barclays depart from Asian capital markets which came only a year after Standard Chartered announced the closure of its Asian Equities business.
Smartkarma is looking to capitalise on this opportunity, and emerge as a global category leader. Our focus area is Investment Research, and we are on plan to completely reinvent how this multi-billion dollar industry operated by envisaging a whole new business model and technology stack to match.
In a short span, Smartkarma has become Asia’s largest independent and collaborative ecosystem for investment research. We can outrun any bank research model and do so at a fraction of the cost. This ensures fundamentally better outcomes for customers
and brings unrivalled efficiency to a vast market.
CL: What components make for a good FinTech-Bank partnership? Or do you think FinTech firms should coordinate amongst themselves to offer a comprehensive offering?
RK: Any good partnership begins with a meeting of minds and mutual respect. In essence, that means an alignment of shared interests, a common operating framework and at a more practical level a culture that respects diversity of view and expertise. Banks often treat fintech companies as software service providers – we believe that needs to change. As the ecosystem matures, we will notice banks and other financial institutions respect the agility, openness, and operation environments that startups bring to the table.
On your second point, Smartkarma is a strong believer in collaboration.
We believe 1 + 1 = 3 i.e. the sum being greater than the parts, but also the importance of a different perspective (in binary 1 and 1 is 3!).
For a tech-enabled ecosystem to be real and meaningful these days – the practical foundation resides around APIs, tech-transfer and understanding of mutual strengths. We noticed how the enterprise SaaS business in Silicon Valley built early integrations (from payrolls to HR to timesheets to benefits), and we would welcome Asian FinTech companies to do the same.
To further this, Smartkarma has built the first Open API for Asian Investment research that can help other platform bring curated content, real-time and dynamically to their own portals. Now whether you’re a comparison website like WeInvest, or a great Investment Alert service like Call-Levels, you can bring contextualised content to the end-user.
CL: What is the biggest disparity between what financial institutions say is important versus what they actually invest in?
RK: To be honest, I can’t answer this!
It wouldn’t be fair, and it might even be construed as misrepresentation. Having said that, I notice that very few large FIs have established early-stage strategic investment divisions. Take large sovereign wealth funds for instance: despite being very large, global investors that have seldom invested in (especially early stage) businesses that are strategic to their own future success. I believe, and this comes based on recent conversations, that’s about to change.
CL: What’s your take on FinTech? Disruptor or Enabler?
RK: Disruption is over-rated, Enabling is under-rated. I like being seen as an agent of positive change.
CL: What do you believe are the key advantages that FinTech firms like yours bring to clients?
RK: Unlike traditional research providers, Smartkarma combines intelligence from the world’s premier analysts, academics, data scientists and strategists in one unique collaborative
ecosystem. Our customizable platform helps investors optimise research spend and enhance returns while accessing the widest range of global analysis of the Asian markets available.
Smartkarma specialists are driven by passion – creating reliable, dependable, and meaningful insights – not by sales teams or research directors
and certainly not beholden to conflicts of interest
The Smartkarma community is on a mission to challenge conventional thinking and change how we view, value and drive idea generation to foster a new standard of industry dialogue and cooperation.
Closing our interview, some wise words on dealing with supposedly insurmountable challenges …
CL: What are the main challenges you have experienced launching Smartkarma?
RK: We are on a bold mission to change the way market participants engage with research. By creating a new model for investors to collaborate, add and extract value from our tested and uniquely positioned global community, we are changing the research landscape for global investors.
Such profound change is often met with reluctance, inertia or even downright resistance. It takes time to educate investors of a “new” way, and this can mean long sales cycles and more than a few sleepless nights. But nothing we’re not used to!
As they say –
“First they ignore you, then they laugh at you, then they fight you, then you win.”
For more information, check out: Smartkarma.