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Hong Kong provides fertile floor for robo-advisory corporations to develop and faucet wealth administration market in mainland China, Aqumon says

Hong Kong’s deep monetary markets and expertise pool will enable fintech start-ups to prosper whereas financial hyperlinks with the Larger Bay Space supply invaluable entry to rising wealth in mainland China, in line with robo-advisory agency Aqumon.

The monetary hub, whose inventory market dates again to 1891, is the world’s third largest capital market and residential to some 2,545 firms price greater than HK$50 trillion (US$6.4 trillion), in line with inventory alternate knowledge.

The bay space initiative holds a variety of promise, particularly with the appearance of the Wealth Administration Join due later this 12 months, which might enable bay space residents to spend money on monetary merchandise by banks in Hong Kong and Macau, and vice versa.

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“Hong Kong’s monetary market is absolutely large. We’ve got cash coming from all around the world,” Aqumon’s co-founder and chief govt Kelvin Lei mentioned in an interview. “Hong Kong additionally has obtained one of the best expertise from all around the world, not simply from mainland China and town. It is obtained one of the best expertise within the finance and algorithm [fields].”

Don Huang (left) and Kelvin Lei, co-founders of Hong Kong-based robo-advisory agency Aqumon. Picture: Jonathan Wong alt=Don Huang (left) and Kelvin Lei, co-founders of Hong Kong-based robo-advisory agency Aqumon. Picture: Jonathan Wong

Robo-advisers are digital platforms that present automated, algorithm-driven monetary planning, a enterprise pioneered by US-based Betterment two years after the 2008 world monetary disaster. Among the largest world fund managers have since provided related platforms to assist assemble funding portfolios for his or her shoppers.

Aqumon, based in 2015, late final 12 months launched SmartFund for ICBC Asia, a giant knowledge analytics platform that employs multi-factor algorithm-based evaluation to supply scientific suggestions on virtually 1,000 funds on the Chinese language lender’s product shelf.

It has since partnered with over 80 monetary establishments together with AIA Group, CMB Wing Lung Financial institution, ChinaAMC and Guangzhou Rural Business Financial institution, protecting greater than 10 million finish customers.

“Hong Kong has a really strong basis of the system for doing monetary actions,” Lei mentioned. “For instance once we [launch] a robo-adviser, it is vitally simple for us in Hong Kong to do world asset allocation, as a result of we are able to achieve entry to [global] monetary markets very simply.”

The surroundings for Hong Kong start-ups is enhancing and the long run for fintech is vivid, he added.

Greater than HK$245 billion of securities modified palms day by day on the Hong Kong inventory alternate, whereas contracts on inventory index choices and futures have been at report highs. As in each main market, the function of robo-advisers in Hong Kong is forecast to develop.

The variety of individuals utilizing robo-advisers within the metropolis is anticipated to develop 28 per cent this 12 months to 215,500, earlier than reaching 368,800 in 2025, in line with forecasts printed by Statista. Property below administration are projected to achieve US$1.74 billion in 2021 and US$6.4 billion in 2025, it mentioned.

The US has the widest adoption with US$937 billion of property below administration within the robo-advisers phase this 12 months, whereas China is ranked second with US$91 billion, in line with Statista.

Whereas the bay space provides fast alternatives, fintech firms ought to set their sights on your entire mainland Chinese language market as individuals readily embrace know-how and belief manufacturers from Hong Kong, Lei mentioned within the interview.

“Lots of people [from mainland China] go to Hong Kong to purchase insurance coverage, and lots of people go to Hong Kong as their first cease to go overseas,” he added. “That is the monetary hub that each the east and the west belief.”

Aqumon was incubated on the Hong Kong College of Science and Expertise and have become the primary impartial robo-adviser to be accredited by the Securities and Futures Fee in 2017. Aside from the college, its traders embody Cyberport, Alibaba Entrepreneurs Fund and an affiliate of Financial institution of China.

The agency presently has over 18,000 energetic buying and selling customers, largely retail shoppers based mostly in Hong Kong. The agency has greater than 100 workers unfold throughout its workplaces in Hong Kong, Shenzhen and Singapore. It plans to open an workplace in Shanghai.

“Our aim is to [launch an] IPO in three years, as a result of every little thing goes very quick,” Lei mentioned. “Our aim is to be primary in Asia [in the digital wealth management industry], and we’re not going to cease there.”

This text initially appeared within the South China Morning Publish (SCMP), probably the most authoritative voice reporting on China and Asia for greater than a century. For extra SCMP tales, please discover the SCMP app or go to the SCMP’s Fb and Twitter pages. Copyright © 2021 South China Morning Publish Publishers Ltd. All rights reserved.

Copyright (c) 2021. South China Morning Publish Publishers Ltd. All rights reserved.

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