Razer Fintech, Franklin Templeton create digital wealth management platform for youth

Singapore

IN A meeting of minds between the old and new, digital bank hopeful Razer Fintech is teaming up with Franklin Templeton, one of the world's largest asset managers, to create a digital wealth management platform targeted at youths and millennials.

The tie-up will also look to improve financial literacy and identify fintech startups for potential partnerships and co-investment opportunities, as part of a memorandum of understanding to collaborate on digital wealth management innovation.

Details are scant at the moment, as the two parties are still in the midst of developing solutions with no set timeline for the launch. The Business Times understands that potential customers can look forward to multi-asset solutions across risk-based, theme-based and goals-based portfolios, regular savings plans, money market funds and other products and investment vehicles.

The partnership will focus on key markets for both Razer Fintech and Franklin Templeton in Singapore, Malaysia, the Philippines and Vietnam, with plans to scale up elsewhere.

It aims to cater to young people who want to start investing from an early age as they plan for the different milestones in their lives, said the parties in a joint statement.

On the rationale behind the tie-up, Dora Seow, country head for Singapore at Franklin Templeton, said: "The reach of Razer Fintech's iconic brand amongst the youth and millennials aligns with Franklin Templeton's desire to target the new generation of investors, with next-generation investment solutions."

Lee Li Meng, CEO of Razer Fintech, told BT that the new wealth platform will be in an app-based format, complementary to the existing offerings of both parties, and will cater to the needs of their target audience in the various countries both companies operate in.

Razer Fintech's expansion into digital financial services such as digital banking and digital wealth management is a natural extension of its existing fintech business, he noted.

On how the product will align with its digital bank ambitions, Mr Lee said that the digital wealth platform can be integrated into Razer's business-to-consumer offering Razer Pay in countries it operates in, subject to local regulations and approvals. It is envisioned to also be a key component of the Razer Youth Bank platform - the name of its proposed digital bank, he added.

Razer Fintech is leading a consortium gunning for a digital full bank licence in Singapore, focusing on the "under-served youth and millennial segment". Partners include Sheng Siong Holdings, insurer FWD, Internet company LinkSure Global, technology venture fund Insignia Ventures Partners and vehicle wholesale marketplace Carro. The results are slated to be announced by the end of the year. Apart from Singapore, Razer is also exploring licences in other parts of the world, such as US and Europe.

On the upcoming wealth platform, Mr Lee said that it looks to customise and tailor relevant offerings to youths, on the back of its "deep understanding" of their needs. Hong Kong-listed parent gaming company Razer is known to have a strong following among the youth.

The platform seeks to reduce the hurdles for these young people to access new investment products, particularly via making available assets, usually equity, in smaller lots to make it easier for youth who may not have the same income or level of investment experience as the client segments typically targeted by financial institutions, he said.

New "bite-sized" wealth products will be introduced, with customers potentially forming their own portfolios made out of these fractional shares, increasing accessibility via smaller buy-ins, he suggested. This can also increase diversification for portfolios.

Franklin Templeton and Razer Fintech are also working to simplify the complexity of investments, with thematic portfolios, sweep products and digital educational elements.

As a purely digital-only service, its delivery model will focus on being fully automated, with an entirely digital end-to-end experience within the app.

"Allowing the youth to access educational tools to improve literacy and awareness and accordingly customise their investments directly via our digital channels is a top priority," Mr Lee said.

"This would also be a significant difference between our expected offerings and that of existing market players who continue to rely on face-to-face interaction."