Following is the transcript of a CNBC interview with Taavet Hinrikus, Co-Founder & CEO, of TransferWise. The interview was broadcast on CNBC on 27 April 2017 at 06:45AM SG/HK Time, during CNBC's "Hong Kong versus Singapore" theme week.
All references must be sourced to a "CNBC Interview".
Interviewed by Dan Murphy, Correspondent, CNBC.
Dan Murphy: CEO Taavet Hinrikus joins us live this morning. Welcome to the program. Thank you so much for joining us. First of all, you're making a pretty significant announcement today for the business. You're deciding to place the business into Singapore and use this hub as your APAC headquarters. Tell us why.
Taavet Hinrikus: So we chose Singapore because we find it's a great place for conducting business. And also Singaporean authorities have been really friendly in terms of making this environment great and helping companies set up here, especially working with the regulator has been a great experience for us. They were very forward-looking and focused on innovation. Fintech is a big area of growth which regulators care about. And we're also very happy to launch TransferWise service in Singapore because there are millions of people who have the need to transfer money from here and are very excited to bring them TransferWise, and now they can do it in a very quick and easy way.
Dan: So, what specifically led to this decision? What can Singapore offer you that other cities in APAC can't?
Hinrikus: So we have our business open in Japan already, we have an office in Tokyo, we're opening in Australia and New Zealand with a little office in Sydney. But we were thinking about how do we make sure that we have a little bit more of a regional center around here to look at all the markets and then Singapore just makes best sense, for the business environment, for the location. So we decided to have our hub here and we'll have 30 people in the office by end of the year.
Dan: Ok so you're employing locals as well. What type of support have you received from regulators like MAS in this decision?
Hinrikus: MAS was really helpful in working with us. So we worked with them to make sure we can do online customer verification and we were among the first companies to be granted the right to do online customer verification in Singapore which means that people can use TransferWise now purely online on their smartphone. So they can do their verification on the phone without having to go to an office. So we were amongst the first to be granted this. And I believe we're the first one to launch with a fully online solution now.
Dan: And everyone in the market also wants to know where your global headquarters are going to be. You've indicated in the past that post-Brexit, London might not be the best option. Tell me where you moving.
Hinrikus: TransferWise is not moving anywhere. We are headquartered in London. We will be staying in London.
Dan: Okay. So no decision to move at this point? You're not going to make a bigger move into Europe?
Hinrikus: No. Headquarters will stay in London. However, if the business environment in Europe changes, and we lose right for passporting and it's pure business contingency for us to look at opening up a European headquarters on the European side.
Dan: Okay so tell me about some of the other reasons behind your move into this part of the world. Obviously you have had somewhat of a presence here before, but you're going to be enhancing that presence. The core of the business model is to really undercut some of the traditional players, like the banks. How would you describe the competition landscape here?
Hinrikus: So which is of no surprise, if we look at Singapore or Tokyo or Australia or anywhere in the world we're seeing the same thing. Banks are under serving the customers and overcharging them. So when we're launching in Singapore, now we're offering the service which is five to seven times cheaper than using your bank. And this is very much in line that we're seeing all around the world.
Dan: And if you break the flows down, as I understand it, you're moving about 1.75 billion Singapore dollars a month, is that right?
Hinrikus: Yes, which I believe makes us one of the biggest money movers online.
Dan: And do you think you can grow on that in this region?
Hinrikus: Absolutely. If you look at the demands that we have in this region, whether we're sending money inside the region, from Singapore to Indonesia, or from Singapore to Australia and back to the U.S. and Europe we're seeing huge demand both for consumers and small to medium businesses.
Dan: What we also wanted to find out from you is some of the other advice that you would give to young entrepreneurs, young investors in this part of the world of course, you were one of the first employees of Skype and you had a leading role in growing and developing that business. What advice would you give to other young entrepreneurs who perhaps wanted to grow and expand in this space?
Hinrikus: So first of all, it's also good to see that Singapore is a thriving tech ecosystem and we're seeing more and more start-up activity here which is helping other companies come here. But so, talking about advice for young companies. It really starts with choosing a big problem to solve. It's the way we solve the telecommunications – Skype, the way we're looking at money transfer and TransferWise. Start with a very big problem to solve and send focus on putting together the best team which enables you to iterate as fast as possible while focusing on your customers. So being very customer centric, focused on our customers has been the key to a successful TransferWise in a very big way.
Dan: Taavet, we're out of time we really appreciate you joining us on the program this morning. Best of luck here in Singapore. Thanks again.