Thai fintech startup says wealth management crucial in aging society
BANGKOK -- Thailand’s startups are looking to diversify a country that still depends on tourism for a large part of its growth. Last year alone, the nation attracted nearly 40 million tourists to generate more than $52 billion, with the industry accounting for some 10 percent of its gross domestic product.
In particular, the Thai financial technology sector has recently seen the emergence of new startups that are trying to disrupt the conventional financial industry.
“There were only 40-50 fintech companies here four years ago. Now, there are about 200 fintech companies up and running in the nation,” said Jessada Sookdhis, CEO and co-founder of robo adviser and wealth management firm Finnomena, in an interview with The investor.
Jessada Sookdhis, co-founder and CEO of Thai financial technology startup Finnomena.(Park Ga-young/The Investor)
He served as the first chairman of the Fintech Club of Thailand, a precursor to the current Thai Fintech Association, from March 2016 to April this year. He and other like-minded politicians and entrepreneurs, including Korn Chatikavanij, former Thai finance minister, founded the association in a bid to help the local fintech market ride the wave of what he calls a “mega trend” in the global financial market.
Like most other countries, the Thai economy is transiting from the physical world to the digital realm. The difference is that the shift in the Southeast Asian nation is taking place at a relatively faster pace than other nations, as the Thais have leapfrogged the PC era to move straight into the mobile era.
An increasing number of Thai people are spending more time online with their smartphones than before, and people tend to use mobile banking services to transfer money, instead of using ATMs or going to brick-and-mortar branches.
Having witnessed the changes brought about by smartphones, Sookdhis felt he had to do something for the local financial sector.
“In almost all high-end tech segments, Thailand has been sort of off the radar -- Line dominates the Thai mobile messenger market, Facebook rules the social media sector, and almost everyone here stays glued to YouTube instead of the TV,” said the Thai entrepreneur.
“The former finance minister and I wanted to see Thai companies have some strong market presence in the fintech arena.”
Sookdhis worked as a fund manager for 16 years before founding Finnomena in 2016. What started as a small company with four members has grown into 70-member firm managing nearly $200 million assets under advisement -- only 0.1 percent of the entire mutual fund market. The investment assets consist mostly of mutual funds.
“The company is still small in size, but we will try to increase the size of our assets by tenfold to $2 billion in the next five years,” he said.
Its media platforms related to financial content, mainly targeting those in their 30s and 40s, have up to 80,000 subscribers. On a weekly basis, they attract 1 million users on average.
Financial experts, called “gurus” by the company, share investment insights for the mass market, while the firm’s robo adviser investment solutions analyze and recommend financial products for users.
Since its establishment, the company has focused on running schemes to improve the financial literacy of the public in the face of a fast-aging society.
According to data compiled by the firm, only 5 to 6 million investment accounts have been opened, compared to 90 million savings accounts.
With the low interest rates of savings accounts, ranging from 0.25 percent to 1.5 percent, it is extremely hard for individuals to stand on their own financially after retirement, he said.
“Only if Thai people know how to invest, start investment today, and receive a moderate return of 7 to 8 percent per annum, up to 10 million of the aged population will be able to be financially independent,” said the CEO, emphasizing the importance of early financial education and proper wealth management.
In 2017, the startup raised $3.2 million in Series A funding led by Krungsri Finnovate, an investment subsidiary of leading Thai bank Krungsri.
It is currently raising Series B funding and plans to manage more diverse types of assets, like stocks and insurance, and to expand into other nations, like Malaysia and Vietnam.
“We will try to spread our current model in which we engage with gurus in each nation to provide knowledge on our platforms and educate people to start investing,” he said.
By Kim Young-won (email@example.com)
This article is the result of collaboration between the Korea Herald and Antara, sponsored by the Korea Press Foundation.