- Scaling exercise left too little attention on home market
- Aims to improve financial literacy among Malaysians
[This story has been amended slightly from its original]
FOUNDED in Kuala Lumpur in 2013 but headquartered in Hong Kong, CompareAsia Group – the company behind financial comparison website CompareHero.my – scaled very quickly across seven other Asian markets, but now intends to bring its focus back to its home base of Malaysia.
The fintech (financial services technology) startup now has 250 staff across the region, having penetrated Hong Kong, Indonesia, Singapore, Taiwan, Thailand, the Philippines and Vietnam.
“We paid so much attention on scaling that Malaysia soon lost much of the attention we had given it when we first started here,” said CompareHero.my managing director Mark Reijman. [Corrected]
“This is why I’m here to rectify this now, by revamping the website,” he told Digital News Asia (DNA) in Kuala Lumpur, adding that the CompareHero.my portal is now optimised for mobile users, and is even more comprehensive than before.
CompareHero allows users to compare credit card packages, personal loans and broadband plans, helping them to find the right financial product for themselves, according to Reijman.
It is looking to strike up more partnerships so that its services can reach out to more Malaysians, he added.
The company now has Zalora as its partner to offer deals when users sign up for credit cards via CompareHero.
Reijman said his company will soon be adding comparisons for saving deposits, home loans and insurance products.
Improving financial literacy
CompareHero is also looking to partner with non-governmental organisations (NGOs) and state-owned entities to increase financial literacy among Malaysians.
“Some of the institutions have a lot of great content but they don’t have the distribution power to roll their content out to Malaysians,” said Reijman (pic).
“So it is a natural choice for us to partner with them as we are the ones with the distribution power, and this fits our vision of increasing financial literacy in Malaysia,” he said.
With 60 Malaysians declared bankrupt daily, there is a lot needed to be done to educate the people on personal finance management.
A report by the Asian Institute of Finance (AIF) showed that only 28% of Generation Y or Gen Y Malaysians are confident about their financial literacy, while 58% respondents rated themselves as having average financial knowledge.
According to the Department of Insolvency, 5,547 individuals under the age of 35 in Malaysia were declared bankrupt in 2014, which Reuters reported could slow down the country’s growth if the situation persists.
Noting the bankruptcy rate among young Malaysians, Reijman suggested that they needed to be more careful with their spending habits, especially when taking up personal loans.
“Take up a personal loan only when it’s necessary, like buying a car or getting an education abroad because these are the things that you need – education is an investment as you’ll be using the knowledge you gain to look for a job to pay your bills.
“I don’t think you should take up a personal loan just to travel abroad or to get married. You should save up for these to avoid taking up more personal loans,” he said.
“It won’t be a very good start for your married life if you took up, for instance, an RM100,000 personal loan just to finance your ‘dream wedding.’
“In the end, it’s just one day – but the loan is going to stick with you for a very, very long time,” he added.
[RM1 = US$0.23 at current rates]
The issue of taking out personal loans to pay for a wedding became a controversial topic earlier this week when Aeon Credit Service took out full-page advertisements for its packages, with taglines such as ‘Plan your dream wedding’ and ‘Borrow up to RM100,000.’
After an online backlash that went viral, the credit firm apologised, The Malay Mail Online reported.
“The Company regrets the inappropriate message conveyed by the said advertisement, titled ‘Plan Your Dream Wedding.’ We have noted public feedback on the advertisement, including perception that the advertisement seemed to encourage individuals to borrow in order to achieve a lifestyle beyond their financial means,” it said in a statement.
Objectivity the objective
Emphasising that its users need not to register to use its services, Reijman argued that what sets CompareHero.my apart from its competitors is its objectivity.
“Users are discerning, and they will know whether a financial comparison website is marketing for a certain bank, or genuinely wants to help them to make a better choice.
“For us, it’s entirely up to users whether they want to use our services or not. Our focus is to help them determine which financial service is the best for them, so there really isn’t a need for us to request their contact details,” he said.
When asked about its revenue model, Reijman said that CompareHero is free for users, while financial services providers pay based on the volume it delivers.
“We will list them regardless of whether we have a deal with them or not, hence, we are not a service they can choose to subscribe to,” he added. [Clarified]
“With the US$40 million we raised earlier in April, we are not worried about not having banks listing their services on our website. This funding has allowed us to stay objective and honest with our users.
“And even if banks don’t like what we’re doing – which is making the market more transparent for users – we will still list their services on CompareHero because we want users to be able to compare all services offered by all the banks,” he declared.
The fintech startup is also trying to create more market transparency by analysing ‘rewards’ and ‘cashback’ offers made by banks, according to Reijman.
It does this by coming up with an ‘average’ percentage rate of cashback or rewards offered by different banks.
“So what we do is that we not only display the maximum cashback or reward amount, but also the average where users are able to grasp the actual cashback or reward rate, and not be confused by the maximum rate displayed by the banks.
“This helps users know how much one reward point is actually worth,” he explained.
Reijman claimed that CompareHero is the only financial comparison website in Malaysia that provides such insights to users.
“By continuing to focus on educating Malaysians in terms of financial literacy by providing fair comparisons to users, CompareHero.my will soon become the top website that offers insights for personal finance in Malaysia,” he declared.
However, he declined to reveal its website traffic, saying that this figure was confidential for competitive reasons.
It is a competitive market in Malaysia, with similar startups such as iMoney, Loanstreet, and RinggitPlus.com.
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