API Business Models

Digital finance for unstoppable women


Banks generally are one size fits all. Their attitude to offering you a product is, “this is what we’ve got. Take it or leave it”. Generally, you take it because there’s nothing else. It is not unusual for people to borrow from loan sharks to pay their bank loans. They do this because they don’t want to get blacklisted. What ends up happening is that people are paying a lot of interest, which is completely crazy. This also applies to savings, for example. So we think about why people save money in jars. Putting money aside in different places for different purposes helps people save for specific goals. But the bank makes it super difficult to open multiple accounts and charges fees if you don’t maintain a minimum balance. One size fits none represents a huge missed opportunity for business and society. It does not have a positive social impact as well.

Just opening a bank won’t convince or enable people to change their behavior. We need to make sure that our services are more accessible, affordable, and relevant. When we decided to start Lucy, we started by looking at who is not being served well by banks and then understanding those people and what they needed. 

Lucy is focusing on female entrepreneurs. Entrepreneurs are the lifeblood of any economy, everywhere worldwide at all socio-economic levels. Micro and small enterprises are key drivers of economic growth. Female entrepreneurs have been shown to generate higher revenues, create more jobs and use their profits wisely. Therefore, helping women entrepreneurs to succeed has a greater impact all around.

This quote from Melinda Gates, “When money flows into the hands of women, everything changes,” sums it up. Empowering and enabling women to start and grow their own businesses make sense for everyone. What does that mean in practice? It’s a very simple equation. Women spend 90% of their income on their families, more than two times the average. In addition, for every dollar of funding that women entrepreneurs receive, they generate 78 cents, more than two times the average again. By empowering and enabling women to generate these results, the potential for impact on the global economy could be huge.

But, it is not happening, and that’s what we recognized. 

Here are a few key facts to highlight how big the gap is between what the potential is and what’s happening. 

Small business registrations have grown by 40% in the past year, year on year, since COVID. And this has been across the board in all environments, Europe, the US, Asia, pretty much everywhere. Many people are starting their small businesses. The number of female micro-entrepreneurs in Southeast Asia is alone 45 million. And yet 70% of women-owned SMEs have inadequate or no access to financial services. So, one size fits all is really one size fits none. 

I’ve worked in more than 35 countries over the past 22 years, focused on financial inclusion, everywhere from South Africa to Pakistan to Vietnam. What I’ve seen is often that mainstream financial institutions don’t understand or cater to the real needs of women entrepreneurs. We see this as being a wasted opportunity for the world as a whole. 

Lucy has been designed from the ground up to provide entrepreneurial women everywhere with the tools they need to take control of their financial future and realize their potential to grow and thrive. From supporting foreign domestic workers to save to start their first business back home to helping homepreneurs get started after a career break, small and micro business owners to effectively run and grow their businesses, enabling successful women to invest in other women. We recognize that entrepreneurship is stressful, scary, and lonely, especially if you’re a woman. 

Success depends on many different factors. Most entrepreneurs don’t have convenient and affordable access to everything they need. For example, if you’re a large business looking to break into a new market or design or offer a new product, normally, you would hire a consulting firm, e.g., McKinsey. What do micro-enterprises do? They google it. Similarly, when they require any assistance with accounting, they google it or make it up as they go along instead of hiring large firms.

What’s lacking for many micro-entrepreneurs is the skills and access to the relevant financial services. It is a holistic issue for people who want to start out growing their business or starting a business from scratch. We looked at this from a very holistic position and said, “Well, based upon what we know, and from all the various places we’ve worked in, what is it that women entrepreneurs need to help them start and grow their businesses and to thrive?” We looked at the whole suite of what was needed.

We also then looked at how we could deliver these in a way that was seamless and easy to use. People did feel that someone was there with them that had their backs and wanted them to be successful. 

We’ve looked at this from various aspects, plugging in the various components of business support, tailored financial services, and community. It was important to make these things affordable, accessible, and relevant. We have taken a lot of time to be very customer-centric in what we’re doing. 

Our approach at Lucy has been to start with the customer. We looked at their pains and aspirations. We understood what was giving the most issue with what they had available or not available right now. We worked from there. What we’ve ended up with as a result of this is not that kind of one size fits all solution.

We’re not one size fits all. Of course, we are also not one size fits none. We’ve focused very much on looking at pain points and how we can be creative in addressing these pain points, but at the same time make things easy to use. That, of course, is the balancing act of having things that address people’s needs and make them intuitive because everything we’re doing is being delivered through an app. 

We started in Singapore. We launched officially at the beginning of October, and we will be expanding to Southeast Asia and beyond. We’re leveraging our extensive experience in customer-centric product design and smart use of technology to very much make it personal. Of course, each market that we move into will be different from a demographic perspective, a geographic perspective, a language perspective, and a cultural perspective. We have designed our platform and implemented our technology to enable the app to be configurable and adaptable without needing everything to be re-built from scratch. In Singapore, we have leveraged an E-money license together with a range of other features that we’ve built on top of this. This enables us to be very tailored and specific in the kind of products and services that we’re offering. 

We have designed our platform going forward to enable us to be configurable and adaptable to individual environments. Our model enables us to have different partnerships with different financial institutions at the back end. Our approach is not to have our own licenses in different environments but rather to be a value-added partner to a range of different financial institutions in different locations. We have recognized through the work that we’ve done that a large percentage of mainstream financial institutions don’t understand or want to serve female micro-enterprises. They’re either viewed as too risky for various reasons or too expensive to serve individually. It is important to understand the market. For many mainstream financial institutions to move into a segment they haven’t previously served would take a vast amount of work. Firstly, understanding the customer. Secondly, to determine their pain points and aspirations to design or tweak products to address their particular needs. And then, of course, to implement platforms that serve those customers.

Our approach is that we are a front-end tech provider, but more than that, a relationship manager for financial institutions to design and deliver the products required for those particular segments in each country that we move into. This enables us to provide this consistent and easy-to-use user interface that we’ve already built from the ground up to be multilingual, multi-currency, multi-entity, and to be heavily API-driven on the back end. This enables us to plug and play with various partners on a country by country or product by product basis while providing a seamless interface to the customer. This is a win-win for the financial institutions that we partner with because it enables us to serve the customers that they don’t understand or don’t want to serve. But at the same time, we’re bringing them the benefit of a consolidated balance sheet without the expense or overhead, or stress of understanding and serving new clients. This enables us to serve a wide range of different segments using our experience and the platform we have developed, and our regional and global experience working in different countries. 

This enables us to enable the women to reach their full potential, which they’re not achieving right now, and empower women everywhere to reach their full potential and grow, thrive and shine.

Debbie Watkins

Debbie Watkins

Co-founder and CEO of Lucy
Debbie Watkins is the Co-founder and CEO of Lucy. Lucy is a neobank based in Singapore

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