Automating Wealth Management in Southeast Asia
The element of trust is crucial
PHOTO CREDIT: Getty Images
Can you trust a robot to give you financial advice?
Bambu, a B2B start-up headquartered out of Singapore, offers digital wealth management services through “robo-advisory.”
According to COO Aki Ranin, the term “robo-advisory” originated in the United States, where it was first used by online investment platforms, such as Betterment and Wealthfront. Robo-advisories offer wealth and portfolio management services, largely through financial advice based on algorithms.
Bambu targets financial institutions across Asia, with the goal of helping its clients’ customers invest their money wisely. The user journey to help this demographic cleaves around four stages: awareness, trust, commitment, and engagement.
Helping people achieve financial goals
While the concept of robo-advisories may still be relatively new, Ranin wants to expand their scope.
“Existing platforms tend to focus on existing investors, which is a rather narrow definition. Our mission is to make wealth accessible to all, from spenders to savers to investors. With our goal-based investing framework, we want to help people plan for and ultimately achieve their financial goals,” he says.
Ranin singled out trust and engagement as the two most important stages in the Bambu user journey.
“Since we are ultimately asking people to hand over their life savings to our platform, we cannot overestimate the importance of building trust in the platform, products, fees, and investment strategies,” he says.
Further, Ranin explained that robo-advisories are often set-it-and-forget-it websites, built around gaining a single lump-sum transaction from new users. Bambu, in contrast, wants its users to come back again and again.
“Our focus is on goal-based investing, which means the often multi-year journey towards reaching those goals is shared between the user and our platform,” he says.
The future of Bambu and robo-advisories
Of course, for financial institutions who have little to no experience with robo-advisories, all of this can seem daunting, however ideal it may sound. Ranin said the most common objection to Bambu is the internal complexity of launching a robo-advisory platform, which can be quite disruptive to existing business models.
In these instances, Bambu is willing to start from square one. “To facilitate those internal conversations, we always propose to begin with a proof-of-concept project, that allows us to collaborate on the correct strategies,” he says.
Still, despite the occasional objection, Ranin says their biggest problem has been the opposite one: They have too much demand, with inquiries coming in from as far as Canada and New Zealand.
“There are so many things we could be focusing on, between various customer requirements to our partnerships, as well as different wealth segments, target markets, and industries. We keep our feet lightly on the ground, constantly adjusting our focus towards the highest opportunity,” he says, adding that given the pace of the industry, agility will be key to remaining relevant over time.
Non-financial companies entering the fintech space
In the long-term, Ranin also sees potential in non-financial companies entering the financial products space, such as telecom providers, e-commerce platforms, and social media giants. For now, the company has largely focused its efforts on Singapore and Hong Kong, due to the limited amount of legwork they can do in other Southeast Asian countries. As a result, he cited “focus and delivery” as one of the biggest challenges when it came to building a regional solution.
Bambu is augmenting its capability by partnering with Thomson Reuters and DriveWealth, in addition to its usual marketing and networking activities, which have already brought the company great exposure. The company is focused on increasing its customer base in Singapore and Hong Kong and closing its Series A by the end of March.
For other start-ups in Southeast Asia who may also want to go into financial technology, Ranin encourages them to think carefully about their business model.
“If you’re B2C, think about customer acquisition cost before anything else. If you can’t solve it, go B2B. Before you build anything, find at least one customer first and let them decide what to build. That way you’re guaranteed some level of product/market fit,” he says.