Digital Wealth House Trumpets AuM Growth

Tom Burroughes

26 January 2021

Singapore-based digital wealth management house , set up in 2017, has passed the $1.0 billion (S$1.35 billion) mark for assets under management – a sign perhaps of how non-traditional players are making a name for themselves. And they're also pressuring established banks to raise their game.

The firm said in a statement yesterday that it is the first digital wealth manager in the Asia-Pacific and MENA regions to have gone over the billion-dollar level at a time when several tech-driven wealth houses have been established.

“We see high conversion rates, large consistent deposits, and engagement with our educational content, for example. We're still only scratching the surface for what's possible when it comes to transforming wealth creation in Singapore, Malaysia, and MENA,” Amanda Ong, country manager of StashAway in Singapore, said.

Fitting with Singapore’s image as a tech-friendly business hub, there are a number of digital players, such as Syfe, which closed a S$25 million Series A funding round last September; Bento (a business-to-business-to-client firm); AutoWealth; Bambu and WeInvest, among others.

"When the company was founded, our objective was to significantly improve the way people build their wealth. For those who do invest their savings, traditional investment options just weren't acceptable,” Michele Ferrario, co-founder and CEO of StashAway said. “But we knew that cash in the bank is actually our biggest competitor: in Asia, 46 per cent of financial wealth is held in bank deposits, compared to 14 per cent in North America.”

The firm’s financial backers include Eight Roads Ventures, the global investment firm backed by Fidelity and early investor in Alibaba; Square Peg, the largest venture capital fund in Australia; Asia Capital & Advisors, the private equity firm led by Francis Rozario and Aaron Razario; as well as Burda Principal Investments, the growth capital arm of German media and tech company Hubert Burda Media. StashAway has a total paid-up capital of $36.6 million. These funds have gone towards launching an income portfolio, a cash management portfolio, as well as new market entries in Malaysia and the MENA region.

Based in Singapore, the business operates in Singapore, Malaysia, and the Middle East and North Africa region. StashAway holds fund management licences from Singapore's MAS and Malaysia's SC, and an asset management licence from the Dubai Financial Services Authority.

For all the noise around digital offerings, reports say the power of large players to resist threats cannot be underestimated. A story last year from the South China Morning Post, for example, noted how HSBC and Citigroup saw a surge in demand for digital access to services in areas such as wealth management. HSBC has opened the door to eight new digital-only lenders with backers such as Alibaba. At HSBC, the share of retail transactions in Hong Kong conducted digitally hit 94 per cent in March 2020. Citigroup’s digital wealth management transactions, including stock and foreign exchange, surged last year. Bank of China (Hong Kong) reportedly accelerated its launch of digital services. And, as WealthBriefingAsia knows, Singapore-based DBS has for some time made digital banking a core strategy, and digital engagement has continued to grow.