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48366

Privé Technologies

Wealth Management Solutions

Singapore
Market: Financial services, Another
Stage of the project: Operating business

Date of last change: 28.09.2020
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Idea

Prive’s B2B, modular and API-enabled "building blocks" provide end-to-end solutions for banks, financial advisors, independent asset managers and insurance companies, consequently helping the financial institutions of today to streamline and transform, enabling them to operate more efficiently and effectively than ever before.

Current Status

Privé Technologies is a leading innovator in the financial and wealth management industries, through its provision of comprehensive, integrated and modular wealth management solutions to financial service providers. We are uniquely positioned between the banking software behemoths and the small fintech startups to provide the most comprehensive and innovative services to our wide network of B2B and B2C clients. Privé Technologies is in the growth stage with a strategy to foster relationships with existing clients and building new ones in the future. So far, Privé has over 45 global EAMs/IAMs (in Asia and in Europe) on board at the moment , as well as four major global private banks using our module-based services. We also work with major retail banks, helping them offer wealth management level services to retail banking clients. Privé assists clients across Hong Kong, Singapore, Taiwan, China, Korea, Thailand, Malaysia, Indonesia, Germany and Austria. We believe that as our solutions spread and are used by more and more financial institutions, the goal of inclusive financing could be easily accomplished.

Market

Founded in 2011 and headquartered in Hong Kong, Privé has an extensive office network in Singapore, Malaysia, Thailand, Taiwan, Korea and China, Germany and Austria. Privé services over 70 financial institutional clients globally, which include private banks, insurance companies, family offices, securities companies, external asset managers and independent financial advisors. Privé targets financial service providers who can leverage the company’s solutions to provide cutting-edge technology products which are highly bespoke and personalized, to their end clients.
Privé is in the midst of a rapidly growing fintech wealth management space. For instance, the total investable assets in APAC in 2017 was US$57.5T and is expected to reach US$91.7T with about 81.4% growth; similarly, the total investable assets in Europe in 2017 was US$77.2T and is predicted to become US$114.8T with about 48.7% growth. At the same time, assets professionally managed in Asia should rise from $12.1T to $29.6T, while the commensurate growth in AUM in Europe is from $21.9T to $35.7T. This burgeoning market is what Privé hopes to massively expand into, in order to consolidate market share. (Source for quantitative data: Asset & Wealth Management 2025 from PWC)

Problem or Opportunity

In the past, the wealth management business was based on personal trust and goodwill between clients and wealth managers. Personalized banking is now expensive due to the arduous and time consuming manual processes undertaken by the financial service provider, subsequently resulting in high cost-income ratios. However, even with the rapid pace of digitization as a pertinent customer demand in the financial industry, the traditional business model is unable to meet changing clients’ expectations for a seamless and digitally enabled experience. Therefore, the cost inefficiencies and inability of traditional financial service providers have led to wealth management typically being inaccessible by the masses. In fact, less than 30% of individuals in APAC professionally manage their wealth, indicating that there is a lack of understanding of how to deal with wealth management.

In contrast to the dearth of supply of wealth management solutions in the financial industry, the demand for such solutions is burgeoning. For instance, the retirement of baby boomers has led to the migration of wealth to the younger cohort, which has a distinct set of behavioral characteristics. One of these attributes can be viewed as an inclination towards self-directed financial management, in which several clients desire their financial decisions to be empowered by their own information, such as personal goals, risk-return appetite and timeline. This push towards greater degree of customization in financial planning has revolutionized the wealth management space, certainly in favour of collating insightful customer information and leveraging the intelligence to offer data-driven products that are best suited to customer preferences. Lastly, there has been an expansion of the wealth management clientele base from being restricted to merely high net worth individuals to also including the emergent affluent class, who are currently seeking efficient and intuitive wealth management solutions.

This gap between the demand for and supply of wealth management solutions is what Privé aims to diminish through its solutions, which are discussed in the next question.

Solution (product or service)

Our technology enabled solutions help the financial institutions of today to streamline and transform, enabling them to operate more efficiently and effectively than ever before. The breadth of our suite of products is unparalleled in the financial technology industry. Over the past year, we have witnessed a paradigm shift in the wealth management space, as more and more providers begin to utilize technology to digitize various processes. Privé has been at the forefront of this shift, leading the way with its innovative solutions, helping financial institutions and asset managers alike ride this wave of digitization successfully.

Privé has developed an end-to-end platform for EAMs/IAMs with direct custodian connectivity and account consolidation, addressing many of the pain points of smaller AMs/FOs have when servicing clients. This platform allows advisors to focus on building client relationships, by automating time-consuming tasks such as account consolidation (especially when HNW clients have multiple private banking accounts), reporting (automatic portfolio comparison report generation), as well as custodial connectivity (facilitating straight through order execution). This end-to-end cost effective platform has gained traction in the market, with 40 EAMs/IAMs on board at the moment. This platform would improve the efficiency of EAMs/IAMs, while direct custodial connectivity would facilitate better product flows for Private Banks holding custodial accounts. By automating the manual procedures that financial advisors would otherwise have to spend time and effort on, the EAM platform frees up the space for advisors. These advisors can shift from more laborious tasks and instead engage with clients to better understand their motivations and preferences, so that they are able to recommend more suitable investment portfolios for their clients. By reducing the time and human effort involved in the advisory process, the monetary resources incurred by the end-client are minimized, consequently making wealth management more accessible to the masses.

Furthermore, Privé also provides an end to end digital private banking system, called in Bank-in-a-Box, which is designed to empower and enable challenger banks (neo-banks), telecommunications companies, mobile manufactures, social media giants and many others to foray into the world of private banking. Privé’s system is designed to act as a completely digital bank-end private banking system, with features including financial data analysis, aggregated financial statements, aggregated personal finance, automated institutional investments, real-time diagnostics, interactive customer evaluation, smart portfolio management, real-time investment advice, data-driven investment recommendations, investment management tools and an artificial intelligence based robo-advisor. These modules, when deployed standalone or as part of the “bank-in-a-box” offer streamline processes and reduce complexity and operational costs for private banking operations.

What makes Privé's solution so valuable is that Privé’s proposal is an integrated and modular solution, which enables us to augment existing systems without having to undergo a wholesale replacement or exchange of a system for a client. Since each of our modules are able to integrate easily through scalable microservices with the existing system and only with respect to functionality that is required or wanted by the client, it enables our system to maintain the inherent customer journey that is unique for our clients and the end investors. This is what effectively puts us into a league of our own. Traditionally, financial institutions use several third-party service providers to deliver the financial services and build their wealth management processes. While these third-parties may provide top of the line functionalities with reference to the module that they offer, it results in a fragmented delivery. There will be a certain amount of manual integration required for the third-parties to be able to communicate with one another.

Our value lies in the fact that we are able to provide numerous modules that integrate and work together seamlessly. We are able to deliver an ecosystem catered for the end to end wealth management process. This allows our clients to provide a seamless and holistic wealth management experience to their clients. Our modularity enables financial institutions to simply pick and choose functionalities that they require to quickly and effectively roll out. Once adopted, clients can choose to integrate more modules from those that we offer or request more functionality via additional modules. Through Privé’s comprehensive Bank-in-a-Box solution, financial service providers are able to easily digitize their existing infrastructure in an adaptable manner and provide bespoke solutions to their end-clients, thereby increasing the ease with which they are able to serve wealth management offerings to the masses. By adapting the modules according to the requirements of the clients, there is a high degree of customization that is achieved, hence improving the quality of service and meeting the demand of the new generation of customers for a more personalized experience.

In this manner, Privé’s comprehensive, efficient and intuitive solutions ease the process through which financial service providers can offer wealth management, which in turn augments the accessibility of end-clients to highly personalized products. This ensures that the nature of the supply of wealth management solutions is well aligned with the contemporary demand for the same.

Competitors

To date, we have no direct competitors in the FinTech space in the SE Asian regions. While there may be numerous institutions offering certain aspects of the wealth management process, we have yet to come across another company that offers the entire breadth of wealth management solutions. Further, since we offer our APIs on a modular basis and white-label our solution, we put ourselves in a position to offer a truly unique offering in the market.

When we do go up against competitors, most of them are either incumbents (like a core banking provider) or a silo solution specialist (such as a data provider or portfolio management service provider) or a competitor who is already in the wealth management market that is offering its services as a vendor to other financial institutions. We believe that our architecture and technology provide a more scalable and validated solution in the area of digitized wealth management. Moreover, as an independent entity, we are not competitors to our B2B clients.

Advantages or differentiators

What makes Privé's solution so valuable is that Privé’s proposal is an integrated and modular solution, which enables us to augment existing systems without having to undergo a wholesale replacement or exchange of a system for a client. Since each of our modules are able to integrate easily through scalable microservices with the existing system and only with respect to functionality that is required or wanted by the client, it enables our system to maintain the inherent customer journey that is unique for our clients and the end investors.

This is what effectively puts us into a league of our own. Traditionally, financial institutions use several third-party service providers to deliver the financial services and build their wealth management processes. While these third-parties may provide top of the line functionalities with reference to the module that they offer, it results in a fragmented delivery. There will be a certain amount of manual integration required for the third-parties to be able to communicate with one another.

Our value lies in the fact that we are able to provide numerous modules that integrate and work together seamlessly. We are able to deliver an ecosystem catered for the end to end wealth management process. This allows our clients to provide a seamless and holistic wealth management experience to their clients. The fact that the platform is multi-asset, multi-lingual and multi-jurisdiction, the Privé platform is conforming to a wide range of use cases and functionalities for clients of all magnitudes. Our modularity enables financial institutions to simply pick and choose the functionalities that they require to quickly and effectively roll out. Once adopted, clients can choose to integrate more modules from those that we offer or request more functionality via additional modules; we are able to do so immediately, and effortlessly, integrate the additional and new module(s) so that data transfer is seamless and utilization of such data is efficient and can cross multiple digital touchpoints.

Finance

Privé is able to generate revenue by being able to charge fees at various touchpoints of the value chain, namely, (a) a usage/license fee for the lead-generating software platform, which is recurring, (b) an AUM-based fee for vFunds/Model Portfolio generated by its robo-engine and (c) subscription/upfront fee for broker/dealing financial products. Through offering financial products, Privé is able to capture higher margin fees (e.g., execution fees, distribution fees, advisory fees) from regulated accounts and AUM-based fees for vFunds and Model Portfolios. Privé also generates subscription or upfront fees by providing technology products to corporates and institutions (e.g. commercial banks, IFAs/RIAs, EAMs, Private Banks). The high barrier to entry of our clients enables a high percentage of our fees to be recurring.

Business model

Privé focuses its efforts on the B2B business through introductions, corporate events and programmes. Privé’s value proposal is a comprehensive, scalable and modular platform for digitizing wealth management, serving as “wealth management in a box”. Our technology enables us to augment existing systems for our global business clients. We also offer scalable microservices that can be integrated within an existing core or banking infrastructure. Privé charges its clients on a SaaS based fee model whereby there is a one-off set-up cost and an annual recurring fee.
Furthermore, Privé is able to generate higher revenue by being able to charge fees at various touchpoints of the value chain: (a) a usage/license fee for the lead-generating software platform, which is recurring, (b) an AUM-based fee for vFunds/Model Portfolio generated by its robo-engine and (c) subscription/upfront fee for broker/dealing financial products to corporates and institutions.

Money will be spent on

The contemporary fintech industry is burgeoning, with startups building newer technologies to remain competitive within the market. In light of this dynamic and given Privé’s current growth stage, it is imperative for the company to constantly develop pioneering wealth management solutions, penetrate further into existing market segments and expand into newer ones.

The future of the wealth tech industry lies in shifting from providing software-as-a-solution to offering data-as-a-solution to users, ie, enabling advisors to leverage the plethora of customer data to enable deeper insights into the customer for delivering them highly personalized products. The investment shall primarily be utilized in enhancing the technology underlying the modules in our Bank-in-a-Box solution to ensure that the future solutions are able to gather more massive amounts of customer intelligence (eg: intrinsic motivation, personality & behaviour) from several data sources and utilize such collated insights to provide bespoke solutions to the end-users.

In addition to upgrading our technology, Privé would also use the funding to expand into new geographies in APAC and Europe, which would result in infrastructure and labour costs. Through the collaboration with investors, we hope to not only utilise the monetary funds but also hope to leverage the relationship developed with the investor to build a brand identity in the new markets. These investors, through their network effects, can assist us in creating company awareness and reaching out to clients who can be potential business generating opportunities. At the same time, the ability to work alongside seasoned professionals, who have themselves engaged in the development and deployment of innovative solutions, with vast domain knowledge in the fields, will allow Privé to obtain constructive feedback on how to provide solutions to the market, allowing further permeation of sustainable investing in the financial industry.

As mentioned above, Privé hopes to leverage the investments received to build more robust and user needs driven solutions but at the same time build relationships which can be conducive to increasing its current market share and positioning.

Offer for investor

NA

Team or Management

Risks

Over the past decade, the wealth management space has witnessed a shift in the paradigm towards technology driven solutions. In an effort to offer products that are affordable, convenient and intuitive to use, companies are incorporating technology to improve the quality of their solutions. With baby boomers retiring and millennials becoming seekers of wealth management, it is more important than ever for Privé to build technology enabled solutions that ease and simplify the process of handling wealth for the new generation. Apart from the segment of direct users, it is also imperative to provide solutions to enterprise clients that can be seamlessly integrated into their platforms, without having to reinvent their existing infrastructure, which Privé hopes to accomplish through its modular structure as described above. Service providers require technology which can easily be integrated into their systems and helps them to automate manual processes, so that they can instead spend their time and effort engaging in more meaningful interactions with the clients.

In addition to the above, it is becoming increasingly important to know customer suitability and design bespoke solutions. The users of wealth management solutions favour solutions that take into consideration the customers’ motivations, prior experiences, demographics, interests etc, and companies which do not acclimate to this environment may risk their sustainability. In order to take a step in the right direction, Privé has launched its AI engine optimizer called AI GO which helps advisors generate personalized portfolios for the end clients by mapping the clients’ motivations and interests on a proprietary framework and then using “natural selection” to produce the optimal solution. In order to ensure that Privé maintains its pioneering position in the market, the company must continuously upgrade its technology to keep its pace with the market developments and provide highly personalized solutions. This will allow the company to give the end clients greater control over their portfolios and hence augment their desire to use Privé’s solutions.

Incubation/Acceleration programs accomplishment

Privé has recently been accepted into two accelerator programs. Firstly, ELEVATE: The Growth Accelerator, is an accelerator that Privé was accepted into and is currently being delivered online until July 17th, 2020. It was designed to help early-stage startups learn how to achieve rapid growth through the principles of inbound marketing, sales, and service. It comprises a series of masterclasses and case studies, culminating with a pitch to a live global audience. Additionally, Privé has been selected to be a part of The Stile Initiative during June - September 2020. The STILE Initiative is an investment-backed accelerator programme based in Hong Kong, which focuses on balancing and integrating business development and investment.

Won the competition and other awards

APB Award for the Best IAM/MFO solution: The award was won for a platform that best facilitates information flows for IAMs and MFOs to view and consolidate end-client information with custodian banks.

HSBC Alibaba JUMPSTARTER 2020 Top Innovative Startup Award

HSBC Alibaba JUMPSTARTER 2020 Audience Favorite Startup Award

IDC - 5 Fastest Growing Fintechs in Hong Kong - 3rd

ET Net - Outstanding Intelligent Asset Management Solution

Invention/Patent

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Idea
Current Status
Market
Problem or Opportunity
Solution (product or service)
Competitors
Advantages or differentiators
Finance
Invested in previous rounds, $
Business model
Money will be spent on
Offer for investor
Team or Management
Mentors & Advisors
Lead investor
Risks
Incubation/Acceleration programs accomplishment
Won the competition and other awards
Invention/Patent
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