This Baidu and Sea veteran just raised $2.8m to get banks ready for online payments

Silot CEO Andy Li (center) and team members at the Visa Everywhere Initiative in Thailand, where Silot won the People’s Choice Award / Photo credit: Silot

Andy Li was an entrepreneur even before he founded Silot, a Singapore-based software company catering to banks. A Chinese national, Li has lived in Southeast Asia for almost 20 years and has been instrumental in growing local branches of large companies like Baidu and Sea in the region.

Silot was the result of Li feeling the need to start something of his own. Today, it announced a pre-series A round worth US$2.87 million from fintech-oriented fund Arbor Ventures and Eight Roads Ventures, which has also invested in Alibaba.

Launched in early 2017, the startup promises to help banks process new methods of payment more efficiently and securely, without having to upgrade their systems. But the problem, Li tells Tech in Asia, is that financial institutions work with legacy infrastructure that isn’t built to easily accommodate new tech like QR-code payments.

Right now, banks are missing out on several opportunities, such as being acquirers for mobile wallets. An acquirer is the company that processes payment on behalf of the merchant in a transaction.

Companies like Adyen have stepped in to fill that gap when it comes to wallets like GrabPay. The reason for this is that for many banks, it’s too costly and time-consuming to upgrade so they can handle new payment methods. Silot provides that upgrade for banks by simply giving them access to its suite of tools.

Preparing for the future of payments

Silot’s suite includes an engine that can process QR-code payments, riding on the wave of adoption for this method in Southeast Asia, after it conquered China. The software supports QR-code payments from providers including Visa and Mastercard, Alipay and WeChat Pay, as well as Prompt Pay in Thailand and PayNet in Malaysia. It can also accommodate payment methods like NFC, as well as traditional card payments if needed.

Silot uses artificial intelligence and specifically knowledge graph technology, which makes sense out of data in silos. Data silos are stored sets of data within an organization that remain unconnected. This can often be because of legal and security reasons, and also because it can hamper a company’s processes as collaboration between different sets of information becomes difficult.

Knowledge graph technology can eliminate such data silos to glean useful insights without compromising security. For example, a bank might be looking for customers who need loans, but all the data they have access to is related to previous loan activity. But useful information about those customers might also be found in their transactions, or data from acquiring merchants. Silot’s tech is meant to bring all this data together to draw a full picture of potential customers for banks.

The idea is to get banks to work a little more like tech companies. “Internet companies have no legacy systems, because all the data is connected. And they have big data and AI teams to work with that data,” Li continues. Banks could build that infrastructure for themselves, but it takes significant amounts of time and investment.

Silot’s tech is meant to bring all this data together to draw a full picture of potential customers for banks.

Silot’s suite includes anti-fraud, anti-money laundering, and know-your-customer features to maintain security and reliability. It can make fast decisions, like identifying which transactions are legit and which need to be flagged. For example, if a user is traveling abroad, the system could gather and analyze data like the flight tickets they booked or the hotel where they checked in, and verify if the transactions coming from there are probably safe to approve.

Silot is targeting the Southeast Asian market and Hong Kong. It has completed a pilot with Krungsri Bank in Thailand, helping it accept transactions from payment platform PromptPay. It has also partnered with a “famous mobile wallet” in Singapore, although Li declined to reveal which one. It intends to explore other territories in the future.

Eventually, the startup wants to use blockchain technology to make data more accessible between different parties in a transaction, including financial institutions, merchants, and individuals. It plans to launch its blockchain product by the end of this year, so more details aren’t forthcoming.

Between two worlds

China’s tech veterans