Tiktok. The short-form video platform has taken the world by storm since its launch in 2017, with more than 18 per cent of global internet users currently on TikTok.
While the platform first gained its popularity for its 15-second videos, it has since evolved to include longer-form content. Today, TikTok is more than just music and dance videos. It is shaping to be an educational platform, with bite-sized videos dishing out investing knowledge.
Tiktok is not the only social media platform witnessing this trend. Facebook and Instagram have similar influencers who amassed a sizeable audience following their investing and personal finance tips.
The ease of acquiring investment knowledge has led to an increase in investments among the young, with many turning to digital platforms to support their trades. With 30 per cent of Thailand’s population aged 24 and below, it is no surprise local wealthtech firms are licking their lips.
Services provided by local wealthtech firms can be categorised into two main categories – robo-advisory and stock analysis. The former is headlined by companies including Robowealth, Jitta and Finnomena while the latter includes companies such as StockQuadrant and SiamQuant.
While robo-advisory firms in Thailand offer similar automated, algorithm-driven investment services, they differ in the scope of products offered alongside it.
For instance, Robowealth seeks to target clients of varying wealth levels with its suite of products. Odini, which the company claims is Thailand’s first robo-advisor, targets the middle-class segment. Meanwhile, its Indego service provides wealth solutions for high net-worth individuals (HNWIs).
Robowealth is seeking to expand its robo-advisory services and target HNWIs while retaining the personal touch these customers desire.
According to the company’s website, its “Robo-for-advisors” service is a hybrid platform where investment advisors can discuss portfolio strategies with their clients on a tablet and initiate buy/sell transactions. Automated algorithms will run in the background to automatically assist in managing and rebalancing portfolios. Robowealth noted this service is scheduled to launch in the second quarter of 2021.
Meanwhile, Jitta focuses on investment analysis and providing stock recommendations. Built upon Warren Buffet’s “buy a wonderful company at a fair price” belief, Jitta’s algorithm analyses factors including earnings reports to generate a score between zero to 10, with 10 denoting the highest “business quality”.
The company claims its top 20 ranked companies have outperformed the S&P500 index since 2009.
Besides providing a stock analysis platform, Jitta also runs a platform akin to a robo-advisor. Its Jitta Wealth service buys the top 30 stocks generated by its stock analysis tool and rebalances it annually. Interestingly, Jitta shares a common investor with Robowealth in Beacon Venture Capital, which participated in its US$6.5 million Series A round in 2019.
Targeting private banking
According to publicly available data, Finnomena is the leading wealthtech platform in Thailand by raised funds. Founded in 2016, the company last raised US$10 million in a Series B round co-led by Gobi Partners and Openspace Ventures in Jan 2020, bringing its total funding to US$13.5 million. Finnomena offers investment products, financial advice, analysis tools, and investment content to its users.
In a move that drew attention to the Thai wealthtech industry, Finnomena announced a business partnership with global asset management firm Franklin Templeton. The collaboration will focus on bringing investment solutions provided by Finnomena, and access to investment insights by Franklin Templeton Academy, as per a joint statement.
Reports have stated the move is likely part of Finnomena’s strategic plans to target the private banking segment and widen the wealth demographic of its users.
While the likes of Robowealth, Jitta and Finnomena offer investment solutions leveraging advanced technologies and algorithms, there are companies within the Thai wealthtech ecosystem that offer less sophisticated services.
Instead, they provide investors with the tools to carry out their trades. Companies including StockQuadrant and SiamQuant assist traders in setting up customisable dashboards consisting of technical analysis tools, buy/sell alerts and watchlists. They also have an active community of investors sharing their strategies through blog posts and educational courses to assist novice investors.
Macro trends remain strong
While the general sentiment towards the wealthtech industry in Thailand remains positive, economic challenges posed by the pandemic is likely to slow its growth. As a country driven by tourism, the Thai economy was badly impacted by the global lockdown. Economic growth decreased by 6 per cent in 2020 as unemployment doubled.
Though this will negatively impact disposable income, thus handicapping the ability to invest, it is likely to be a short-term challenge as the Thai economy is showing signs of recovery. The Asian Development Bank forecasts local GDP to grow by 3 and 4.5 per cent respectively in 2021 and 2022.
Crucially, the digital drive accelerated by the pandemic has greatly reduced the barriers to acquiring investing knowledge. With a digitally savvy population more aware of growing their wealth through capital markets, the macro trends around the Thai wealthtech industry remain strong.