If you want a litmus test for how successful a bank is doing, check its App Store rating. That’s what Pavel Fedorov was doing in early 2022. He’d recently left his role as Co-CEO of Tinkoff, the pioneering digital bank based in Russia and was seeking a new venture. At Tinkoff, Pavel had been exploring ways to replicate its success around the world and he wanted to continue to develop fintech products for emerging markets. South East Asia was on his radar, “and in the Philippines the biggest retail bank in the country is rated at 1.6 in the App Store,” he says. It was clear that there was a big opportunity for a challenger to do better.

Pavel teamed up with two more fintech heavyweights who had also left Tinkoff; George Chesakov, “employee number one” at Tinkoff since 2006, and Raffy Montemayor, who had two decades of experience in the Philippines banking and technology sectors. Together, they founded Salmon, a new technology-centric bank designed to offer innovative, flexible, user-friendly banking for everyday Filipinos.  In the years since, it has grown rapidly, from “three people and a napkin” to a thriving company with around 500 employees at its headquarters. This month it announced a $100m boost in equity and bonds in an oversubscribed financing round; Salmon is currently rated 4.8 in both the App Store and Google Play.

An opportunity too hard to miss

Salmon is a young and fast growing company. The same can be said about the population of the Philippines. It’s “a very young, very dynamic, very mobile-led population” says Pavel. “Filipinos spend the largest number of hours on their mobile phones per day globally. They spend the largest amount of time on social networks per person globally.” From a mobile preparedness perspective, the country was second to none, but the financial services market was historically a closed loop system, and anti-fraud measures meant it could be incredibly hard for regular Filipinos to secure basic bank loans or finance products.

At the time Pavel was taking a closer look at the country, things were just starting to loosen up. This was thanks to the introduction of new Philsys ID cards and facial recognition, which created new, reliable anti-fraud options, and the country was also pursuing a progressively-minded regulatory agenda when it came to improving financial inclusion. “There were smaller countries moving in this direction,” says Pavel, “but [the Philippines] had a population of 120 million, with such a global diaspora and major underpenetration of retail credit…it just felt like an opportunity that was too hard to miss.”

Building a learning machine

Salmon was built to be a credit-led bank, something “that solves a real problem for people who have limited access to credit”. But the first problem for the team to solve was to build a proprietary scoring and acquisition engine. “Before you start caring about licensing, balance sheet… a bunch of other issues…you want to have this highly scalable scoring and acquisition machine that runs on your proprietary data, scoring algorithms so you can actually make the right sort of decisions,” says Pavel.

Choosing to learn from the field, the team brought its initial product to market in just three months. “In the first two quarters we would just give out loans and 60% of them would go delinquent,” says Pavel. “In any of the big banks you would probably be fired within six months, right? But the whole idea was doing hard things first, building this learning machine, the scoring apparatus that actually evolves. It just planted the seed for building – for growing – this very big and complex tree of scoring models.”

99% uptime

In banking terms, Salmon is far from “established”, but it is rapidly making a mark. Salmon App now has around two million monthly active users and (though Pavel declined to be specific) Salmon Group has “hundreds of millions” of dollars in revenue. It’s a financing company and a licensed bank, both providing some of the best deals in the market for personal savings and retail credit products. “We're one of the most loved financial service applications in the country,” says Pavel, citing the App Store rating, and its app records 99.9% uptime (compared to competitors which are routinely down for an hour or so per day). Its products are growing at pace, from revolving credit lines, installment loans to recently launched motorcycle financing.

It’s the sort of moment, Pavel says, when a company might fall for the temptation of expanding internationally too fast – to “start planting flags on the map”. Instead they intend to focus on quality. “If you talk about the next year, we really want to get our heads down and just really focus on flawless execution,” says Pavel. “The single most important priority at this stage is actually not to have other priorities.”

‍