OCBC Bank is first SEA bank to launch robo-investment service
By Digital News Asia August 24, 2018
- Requires an initial investment amount of just US$2,561
- Can choose from 28 portfolios of equities and exchange traded funds across six markets
OCBC Bank has become the first bank in Southeast Asia to launch a robo-investment service, OCBC RoboInvest. Targeting young and tech-savvy investors, it requires an initial investment amount of just S$3,500 (US$2,561).
Customers can choose from 28 diverse portfolios of equities and exchange traded funds across six markets, constructed based on themes like technology, real estate investment trusts, fast-moving-consumer-goods companies, property, healthcare and food & beverage.
OCBC RoboInvest uses algorithms to monitor each portfolio automatically and periodically re-balance assets if there are economic and market movements that impact the portfolio.
It then alerts customers via emails so they can approve the re-balancing. This means customers do not need to constantly monitor their investments and helps optimise their portfolios.
Customers will have access to a dashboard to see how their investments are performing and can easily withdraw or add on to them at any point.
Costs are a fraction of traditional investment management fees: Just 1.5% annually for assets under management of up to S$50,000 (US$36,586), and 1% annually for assets under management of more than S$50,000.
A pilot run from March to December in 2017 confirmed OCBC Bank’s hypothesis that investors between the ages of 25 to 40 years old have no reservations embracing “self-service” investing as long as the investment portfolios are in line with their investment preferences and match their risk profiles.
In the pilot, two categories of investment portfolios were offered to investors. The first category consisted of five portfolios made up of Exchange Traded Funds (ETFs) and equities listed on the Dow Jones and Nasdaq.
The second category consisted of four thematic baskets of stocks listed on the Dow Jones and Nasdaq. The themes were centred on the technology play, fast-moving-consumer-goods companies and high performing stocks.
The average amount invested by the pilot users was US$9,000. The average age of these investors was 35 years old.
Leveraging on customer insights from the pilot run, OCBC RoboInvest – which was developed together with a Singapore Fintech start-up, WeInvest – has therefore increased the number of markets to include Singapore, Australia, UK, Europe and Hong Kong, and the number of investment portfolios to 28.
The end-to-end customer investment journey has also been enhanced based on the learnings from the pilot run. The entire journey is fully automated and self-directed.
OCBC Bank’s head of e-Business Singapore, Aditya Gupta, said: “With OCBC RoboInvest, we are empowering our customers to get started on their investment journeys and grow their wealth in a simple, smart and self-directed way.
“This is another step in our ongoing journey to ‘democratise’ wealth management by delivering quality solutions to more investors with greater efficiency, convenience and personalisation. We are certain that our customers will find this new digital investment platform very attractive and that it will radically transform how customers engage with their investments.”
WeInvest chief executive officer Bhaskar Prabhakara, said: “We are extremely excited to collaborate with OCBC in launching a simplified digital wealth platform for their customers. Today, both novice and discerning sophisticated investors are ready for self-directed investment journeys whereby best-in-class low-cost investment solutions are made available to them.
“We are also excited about OCBC being the first bank in Southeast Asia to launch systematic investing through thematic and passive portfolios. This partnership reinforces the need for innovation and new models, where marquee financial institutions can implement customer-focused digital solutions with a faster time to market.”
OCBC Bank’s partnership with WeInvest was forged through its Fintech and Innovation unit, The Open Vault at OCBC. WeInvest was founded in 2015 and is headquartered in Singapore.
It recently announced that it has raised US$12 million for its series A round of funding. Schroders, a London-based international asset management firm, is its main backer and has acquired a minority stake in the startup.