Grab ventures into retail wealth management with Bento buy
Acquisition of robo-advisory startup allows it to offer financial solutions to its users, drivers, merchants via its app
Singapore
TAKING a clear step towards offering wealth management for the masses, digital bank contender Grab has acquired Singapore-based robo-advisory startup Bento for an undisclosed sum.
With this move, Grab will be able to offer retail wealth management and investment solutions to its ecosystem of users, drivers and merchants via its app.
This comes as the unicorn seeks to seize the immense market opportunity in the region for retail wealth, with digitally distributed assets under management expected to reach US$75 billion by 2025, from about US$10 billion in 2019.
Grab's retail wealth business will operate independently of the outcome of its digital bank bid, Grab Financial Group's senior managing director Reuben Lai told The Business Times.
Following the acquisition, Bento will be rebranded as GrabInvest, with products expected to be launched on the Grab app in the first half of the year in Singapore. They will eventually be rolled out to other markets in South-east Asia.
GrabInvest intends to provide cash management and portfolio-based financial solutions and will operate under a retail wealth management capital markets services licence by the Monetary Authority of Singapore (MAS). It aims to adopt a low-cost model with full disclosures on fees that is transparent and easy to understand.
GrabInvest will be the fifth vertical under Grab's financial services arm, Grab Financial Group, and will be led by Bento's founder and CEO Chandrima Das.
The other verticals under Grab Financial Group are payments (GrabPay), rewards (GrabRewards), lending (GrabFinance) and insurance (GrabInsure).
Ms Das, who will be Grab Financial Group's new head of wealth management, pointed out that their common vision is to make investments accessible to customers "irrespective of their wallet size".
Live since October 2016, Bento's proprietary digital wealth platform includes client onboarding, and portfolio construction and rebalancing supported by risk management capabilities.
Its clients include both businesses and consumers; Bento's business-to-business platform caters mainly to banks, wealth managers, brokers and insurance companies, while its business-to-consumer entity is licensed under MAS as a registered fund management company.
Bento charges financial intermediary fees that cover white labelling and installation. On an ongoing basis, it uses a success-based fee model instead of upfront costs, which can go up to about 5 per cent in typical financial institutions.
Products that Bento covers include active funds, exchange-traded funds as well as a basket of stocks to construct bespoke portfolios. Its team of 12, including Ms Das, will join GrabInvest.
Ms Das has over two decades of leadership experience in banks and asset managers across Asia and the UK. She was formerly managing director at Bank of Singapore and prior to that, CEO of ING Investment Management.
Grab Financial Group's Mr Lai noted that there is a lack of access to affordable wealth management products and retirement planning solutions for most people.
"The launch of GrabInvest brings us a step closer to democratising access to affordable financial solutions that will help them achieve the financial stability they need well into their retirement years," he said.
He said that the group envisions synergies between GrabInvest and the potential digital bank, but said that GrabInvest will "not be subsumed under the digital bank".
"We remain confident about our digibank application and will operate our retail wealth business independently of the outcome of our digital bank application," he added.
Grab is one of the contenders for the two digital full bank licences up for grabs in Singapore. It is partnering Singtel, with Grab holding a 60 per cent stake in the proposed project while the telco giant will own the remaining 40 per cent. A digital full bank licence would allow successful applicants to take deposits from and provide banking services to retail and non-retail customer segments.
Results for the digital bank licences will be out in mid-2020.
