Hong Kong, a recognized global leader in banking and finance, is now a hotbed for financial technology (fintech) startups. This year, the Hong Kong Monetary Authority (HKMA) approved the first round of virtual-banking licenses, and Hong Kong–based WeLab was the fourth recipient. As the only home-grown fintech to receive the license, WeLab Group is reinventing traditional financial services by creating seamless digital experiences.
In 2013, WeLab launched WeLend, an online lender providing unsecured loans to individuals. WeLend has a lean operations model with no physical branches or manual processes—everything from filling out of forms to in-person interviews is done online. Unlike banks, which rely on traditional data such as credit scores, WeLend uses a multitude of data points, such as social media and mobile data, to make credit decisions in minutes.
Its proprietary artificial intelligence (AI)–based credit-decisioning engine, WeDefend, allows the company to service riskier applicants: those who cannot get a bank loan due to a lack of credit history or poor credit score. “We leverage data from the credit bureau in Hong Kong as well as behavioral data, sources from mobile phones to other devices, and social media. We conglomerate all of that big data to get a more holistic understanding of the customer risk profile,” says Joyce Wong, growth analyst at WeLend.
Like many startups, WeLend wanted to focus its time and money on product development. Its management chose to launch its platform on the cloud to take advantage of the operating expense (opex) costing model, which allowed the company to quickly bring its application to market. WeLend started on the Heroku cloud platform, but as the application got up and running, the startup wanted more control over infrastructure and decided to migrate to Amazon Web Services (AWS). All current workloads are now on the AWS Cloud.
“AWS was a natural fit because of its maturity in the market, its support of Linux, and the open source community, which we rely on heavily as a startup,” says Eddie Tse, head of IT.
WeDefend is the company’s crown jewel. It is not only used to analyze an applicant’s risk profile, but it is also used to verify personal details and prevent fraud. The WeDefend algorithm runs on Amazon Elastic Compute Cloud (Amazon EC2) instances, where big data is processed, and then stored in Amazon Simple Storage Service (Amazon S3) buckets. The startup also utilizes Amazon’s AI tools, such as Amazon Rekognition, to identify the category of each document uploaded to the app, such as a driver’s license or ID card.
The company used Heroku’s managed database service for the first year but has now fully migrated to Amazon Relational Database Service (Amazon RDS). “Heroku’s offering is at a much more shared level, whereas with Amazon RDS, we can control how many replicas we have, or the instance types, so we can tailor our workloads better,” says Tse. Customizing workloads allows the company to optimize resources and speed up database queries. “We also have a bit more access to the actual instances to gain more insights.”
Tight regulations ensure that security is a top priority for fintechs in Hong Kong and beyond. WeLend uses Amazon CloudFront to safely distribute its services, along with AWS Shield and AWS Web Application Firewall (AWS WAF) to bolster security. The startup was also a pilot user of Amazon GuardDuty, which it now utilizes to intelligently monitor workloads. “Before Amazon GuardDuty, we had to rely on the access logs that we created at the application level, conduct manual scans, and always have somebody on standby for security breaches. With Amazon GuardDuty, we can sleep better—confident that AWS engineers know how to run a secure workload. The logic, rules, and AI are already embedded in there, giving insights to our operators that alert us to any strange activities,” Tse says. Eliminating the need for manual monitoring has freed up 15 percent of engineers’ time.
WeLend has gradually shifted more workloads onto the AWS Cloud, taking advantage of new tools as they are released. “We evaluate each use case for transition from proprietary tools to common tooling on AWS, because that way we gain the know-how of the platform provider,” Tse adds.
Since its launch, WeLend has achieved tremendous growth year-on-year. It now receives 8,000 applications each month, up 80 percent from the previous year, surpassing the average annual growth rate of competing non-licensed bank lenders such as Promise, which has been in business for over 20 years. “We have had to scale up quite quickly, and our technology infrastructure is critical to support our business. With AWS, we’ve had a seamless experience,” Wong says. “Whenever we had a challenging new project, we never had to worry about spinning up new infrastructure because everything is elastic on the AWS Cloud.”
The startup has used AWS Business Support since day one and has benefited from introductions made by AWS teams to other fintechs and community resources. “The AWS Online Tech Talks are very useful for our engineers to keep up to date, in terms of what technology is available, and it lends a human touch to the whole experience,” Tse says.
Throughout the application process for a virtual-banking license—which now allows the WeLab Group to offer more diversified retail banking services and products to Hong Kong customers—WeLend relied on AWS. The startup was able to provide the Hong Kong government with transparent audit reports from AWS data centers to complete the application. The ability for WeLend to tap into AWS expertise, and the breadth of resources available for creating a secure environment, strengthened WeLab’s position as a candidate for the license.
It also received support on how best to architect and manage its mobile app to meet requirements specific to virtual banking. “AWS has invested a lot of resources into guidelines on acquiring compliance, and those were very useful for us in addressing regulators’ concerns,” Tse says. “AWS started contacting us when we were still quite small, and that was the key turning point for us. They made sure we always had the right support.”