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Dhaka
Sunday, December 4, 2022

‘Within the next 10 years, Bangladesh might become cashless’

In conversation with Cho Chun il, founder and CEO of KONA I

Fintech: We know that KONA was founded in 1998 by you, since then you have been working as its CEO. Tell us something about your background, before 1998 what did you do, from which sector did you come to found KONA?

Cho Chung il: Actually I was a research and developer when I worked for Daewoo Telecoms. I have worked for Daewoo for more than ten years. I was an expert in developing console, workstation etc. After that I founded KONA I.

Fintech: What was your primary motivation behind launching KONA I?

Cho Chung il: As I said I was a researcher, I predicted that data will rule the banking and financial domain and there is going to be disruption in the whole system. I was an expert in designing electronic cash system and I actively promoted electronic cash services in South Korea. My primary interest and motivation behind research was to create a wholly digitalized payment structure.

So, then I designed payment infrastructure for debit, credit as well as pre-paid cards. Then also I developed South Korea’s first integrated bus-subway card transportation system and commercialized it. I also developed a chip operating system because chip operating system is very important payment scheme.

So, at that time we have started working with Visa, MasterCard, American Express and China Union Pay. Nearly ten years ago, I knew IT companies will eventually have a large stake in financial service area because they have so many applications in their repertoire to make financial service more secure and convenient to common people. But the problem is even though some of the large banks have license but they do not want to venture in that area, so we found that we have a lot of opportunities in this sector. So with that motivation, I found Kona I.

Fintech: Do you find your company more relevant now because we are heading towards a cash-less future? Is this the main driving force behind your company?

Cho Chung il: In my country—South Korea— we do not use cash. Less than one percent of our population now uses cash. You can use electronic payments even to a street vendor. It didn’t happen overnight but once people started seeing the benefits of going cashless, they never went back to banknotes anymore. Besides, it’s convenient for the government as well as it is less costly for them. Besides, it increases transparency.

Fintech: What do you think is the prospect of seeing Bangladesh cash-less? I mean how many years will it take?

Cho Chung il: I don’t know yet but I think it may take ten years more from now on. I know many central governments; central banks in different countries are trying to issue data currency. It is called the CBDC—central bank data currency. It is like bitcoin—which is of course not paper currency.

“Nearly ten years ago, I knew IT companies will eventually have a large stake in financial service area because they have so many applications in their repertoire to make financial service more secure and convenient to common people.”

We are doing a pilot testing of data currency in South Korea now. Data currency will be popular in my assumption. For example, when you use bKash and Nagad, you just transfer financial data from one place to another place. The problem is, here even though the data is passed through a secured channel, the data itself is not secured. But in case of data currency, it is absolutely secured. So central banks are interested in it.  

Fintech: Starting from barter, we went to cash, but now money transfer is like transferring some bytes from this place to another, so the main purpose of that transaction is to make it secured. What is KONA doing to ensure that the transaction is secured, we know you use two-factor authentication, are we heading for biometric security or something like that?

Cho Chung il: In either two-factor or biometric authentication, you just authenticate user, not transaction. The transaction itself is secured. Maybe your transaction depends on service provider, but if you don’t trust the service provider, we can’t trust the transaction. But if you use blockchain technology, blockchain network can secure this transaction.

So this is why I have invested a lot of money to develop blockchain. We already have implemented this kind of secured transaction in blockchain networking.

Cho Chun il, founder and CEO of KONA I || Photography: Arif Mahmud Riad
Cho Chun il, Founder and CEO of KONA I || Photography: Arif Mahmud Riad

Question: I know KONA SL is part of KONA I, so my question is, why did you choose Bangladesh as a potential destination to establish KONA SL— your research and analytical wing?

Cho Chung il:  I believe, a lot of Bangladeshi people have smart knowledge in IT sector, but they don’t have scope to nurture their skill in Bangladesh because there is probably not enough opportunity for them. So I did some research, and found that there is a scope of establishing a sustainable research and development wing of my company here in Bangladesh

This is a win-win situation as South Korea has a lot experience in IT industry domain and also we know the global standard, and Bangladesh has good skilled manpower. So they both dovetailed and it prompted me to establish KONA SL.

“In either two-factor or biometric authentication, you just authenticate user, not transaction. The transaction itself is secured. Maybe your transaction depends on service provider, but if you don’t trust the service provider, we can’t trust the transaction. But if you use blockchain technology, blockchain network can secure this transaction.”

Fintech: KONA SL devised the first e-KYC for Nagad I think. Later it did the same of DBBL. Developing e-KYC for Nagad and DBBL was a milestone for your company, so what other milestones you have already achieved from KONA SL?

Cho Chung il:  We are developing for financial service ecosystems based on global standard. So maybe all financial service providers will use our platform–that is my goal. We are also developing new commerce platform on blockchain network. This platform will be an innovative commerce platform. Right now we are focusing on these two platforms.

Fintech: How do you find the governments, are they more accommodating or are they eager to adapt to new technologies or are they rigid to be ossified with previous technologies?

Cho Chung il: I don’t actually directly work with government. We mainly do business with private sector so I am not in a position to make comment about it.

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