Singapore Wealthtech Sector Continues to Grow; Sees Signs of Consolidation in 2021by Fintech News Singapore January 6, 2021
In Singapore’s burgeoning 1,000+ strong fintech industry, the wealthtech subsegment continues to grow and mature on the back of increased appetite from investors, acquisition deals, and rising demands for automated financial advisory services, notably from the younger generations.
But as the space gets more and more crowded, some startups just can’t cope with the stiff competition.
H1’20 saw bigtechs and platform providers furthering their fintech ambitions in a bid to extend their market reach and customer value propositions.
One particular move was ride-hailing giant Grab’s acquisition of Singapore-based business-to-business (B2B) robo-advisor Bento in February 2020. The service, which was rebranded as GrabInvest, started off by offering a micro-investment solution for users in Singapore called AutoInvest.
AutoInvest allows users to start investing with as little as S$1 in fixed-income funds managed by Fullerton Fund Management and UOB Asset Management.
KPMG expects the intermingling of bigtech platforms and fintech will only grow as companies on all sides work to extend their reach and value.
H1’20 also saw several developments in the regulatory landscape with the implementation of the Payments Service Act, a legislation that includes regulatory requirements and a licensing programme for cryptocurrency exchanges.
Though Singapore is already home to a number of renowned crypto exchanges including Binance and Huobi, the move is expected to attract interest from further global crypto platform operators looking to gain investor trust and user traction, according to KPMG.
Southeast Asian bank DBS, is currently working on launching an exchange for digital assets, including cryptocurrencies, that will provide tokenisation, trading and custody services to institutional and accredited investors.
Singaporean wealthtechs make up 2020’s Wealthtech100
Last year’s Wealthtech100 featured a number of Singaporean wealthtech companies, including 360F, Kristal.ai, and Tradesocio.
360F is a wealth advisory distribution and applications provider. Its flagship 360-ProVestment solution utilises artificial intelligence (AI) powered product recommendation engine for life protection and wealth management needs.
Kristal.ai is an AI-powered robo advisory platform that provides its investors personalised strategy for portfolio optimisation and global investments.
Finally, Tradesocio provides a software-as-service (SaaS) solution offering brokers in the forex market with a cloud-based social trading platform providing information about business opportunities.
Wealthtech100 is an annual list published by Fintech Global that recognises the world’s top 100 most innovative wealthtech companies.
Wealthtechs expand global footprint
2020 saw key developments and expansion moves coming from renowned wealthtech ventures.
After raising a US$10 million during its Series B funding round last year, Singapore B2B robo-advisor Bambu announced in March 2020 that it will be expanding its services outside of Asia, including the Americas, Europe and the Middle East. Founded in 2016, Bambu counts amongst its customers the likes of HSBC, Beanstox, Apex Clearing, and Connect by Crossbridge. The startup has offices in the US, the UK and the Middle East, according to its website.
Similarly, Singaporean digital wealth manager StashAway rolled out its platform in the United Arab Emirates (UAE) in November 2020 after becoming the first digital wealth manager to get an asset management license from the Dubai Financial Services Authority (DFSA) with retail endorsement.
While domestic ventures are looking to expand beyond their home market, foreign wealthtech firms such as Zug-headquartered Expersoft Systems, are eyeing the Singaporean market.
Pascal Lemann, Expersoft Systems’ regional manager for APAC, said in February that Singapore was amongst the firm’s main markets, citing huge potential in the field of independent asset managers and multi-family offices.
Expersoft Systems, a leading B2B2C wealthtech provider, is known for its award-winning PM1 product family, which offers banks, independent asset managers, family offices, institutional investors and other financial services providers with full value chain coverage for their businesses, ranging from client prospecting, deep multi-custody portfolio management to a consolidated reporting engine and online banking.
Just this week, Expersoft has gone live with the cloud based AM-One Asia platform. It is a SaaS solution providing PM1 applications, outsourced cloud hosting and back office support services.
iCapital Network is another foreign company that’s expanding into Asia. The alternative investing startup, originally from the US, plans to open a new office in Singapore in H1 2021.
Wealthtech funding Singapore
This year, wealthtech startups in Singapore continued to gain traction from investors, with Syfe, a young digital wealth manager that launched in July 2019, closing a whopping SG$25.2 million (US$18.6 million) Series A funding round led by fintech-focused venture capital (VC) fund Valar Ventures earlier this month.
Founded in 2017, Syfe aims to make investing more accessible by imposing no minimum amount and by charging low fees that range from 0.4% to 0.65% per year. Though it serves 23 countries, Syfe currently only actively markets its services in Singapore.
Kristai.ai is another wealthtech startup that raised funding this year, announcing a US$6 million Series A from Chiratae Ventures and Desai Family Office in January. Kristal.ai said it will be using the proceeds to expand further into Asia Pacific (APAC) and the Middle East.
StashAway, which claims to be the first robo-advisor to receive a retail license in Singapore, securing a S$22.3 million (US$16 million) investment during its Series C in July. Founded in 2016, StashAway personalises financial planning and portfolio management for the vast range of needs of retail and accredited investors alike. The startup said it will use the fresh funding to accelerate product development.
With more and more startups entering the Singaporean wealthtech arena by the day, and large financial institutions moving into the robo-advisors space, competition is getting stiff and some companies just aren’t able to take the heat.
Robo-advisory platform Smartly shut down earlier this year, citing intense competition in the wealth management space. Launched in 2015 and acquired last year by Vietnam-based asset management firm VinaCapital, Smartly had struggled to grow the business with the arrival of a clutch of new big-pocketed players entering the market.
Competition will only increase as non-financial companies continue to enter the wealth management space. Most recently, UOB Asset Management (UOBMA) signed a partnership with telco firm Singtel to launch a robo-advisory service in Singapore. The service, which is expected to launch in the first half of 2021, will be integrated into Singtel’s Dash mobile wallet and will allow Dash customers to invest in a portfolio of exchange traded funds (ETFs), managed funds and/or other asset classes directly through the mobile app.
Statista estimates that as of 2020, AUM in Singapore for the robo-advisors segment stood at US$1.06 billion. It’s projected to grow by an annual rate of 25.3% to reach US$2.62 billion by 2024. Users in this segment are expected to increase from about 104,900 in 2020 to 192,500 by 2024, an increase of over 83%.