Robo-advice will change the face of financial services across Asia Pacific by giving opportunities to underbanked markets, according to Chris Brycki, CEO of online investment adviser Stockspot.
Automated investing will open up opportunities for underbanked populations in Asia, according to Stockspot’s chief executive officer and founder, Chris Brycki.
Speaking at the World Capital Markets Symposium in Kuala Lumpur last week, Brycki said Malaysia was an interesting case study in the national uptake of automated investing – and robo-advice more broadly – as a way to “improve financial inclusion” and “democratise” the wealth management industry.
“Malaysia has been at the forefront of facilitating the growth of fintech in the region as they understand the profound importance of innovation in generating a vibrant and sustainable economy,” Brycki said.
“The combination of technology and finance has significant potential to disrupt the business model of incumbents and appeal to a wider audience by promising user-friendly services that transcend demographic, geographical and socio-economic barriers.”
A January 2015 report by Forrester, titled Malaysian Banks Brace Themselves For Digital, identified improving customer experience as a “high or critical business priority” for more than half of financial services firms in Asia Pacific.
According to Frederic Giron, Vice President and Research Director at Forrester, over 10 million Malaysians – approximately one-third of the country’s entire population – had a smartphone in 2014, and the number is expected to rise to 18 million by the end of this year.
“[Financial] institutions are trying to better understand the customer lifecycle – how they can leverage technology in order to serve customers across the different touchpoints throughout the customer journey,” Giron said.
Brycki noted that despite managed fund fees being higher in Malaysia than Australia – with typical entry fees in Malaysia ranging from 4-6 per cent – the incorporation of automated investing and other fintech services would help local economies flourish by providing greater access for the general population to invest.
“The success of robo-advisers in markets like the US, UK and Australia will see automated investment services emerge in Malaysia; it’s not a matter of if, but when,” Brycki said.
“It is a phenomenon that is growing [in the finance sector] exponentially across the globe…via a democratisation process that could gradually reconfigure a notable part of the institutional landscape, [as well as] challenge regulators to adapt.”