Episode 2, Navigating the complexities of wealth management with StashAway's CPO, Alex Cringle
So when I view fintech, it's about how do we scale in terms of wealth management, the accessibility of these services and that's where technology comes into play. It's about that outreach, it's about that engagement, it's about that in the future, we can talk about it later personalization as well. And that's where tech comes in in different ways as well. But it generally doesn't change the underlying nature of the purpose of why somebody needs advice on their money or needs access to money - Alex
Understanding Alex's role and KPIs as a StashAway CPO (03:07)
Understanding primary focus areas and KPIs of a Chief Product Officer (CPO) at StashAway
Finance is a broad ecosystem, and having a clear understanding of the key components is crucial. Learning about key players in the industry, such as exchanges, market makers, and regulations, is essential. For a company like StashAway, its primary focus is to allocate investors' money in line with their objectives and charge a fee for the service. Key performance indicators (KPIs) include assets under management (AUM), cost of acquisition, retention, and operating costs. Market performance also has an impact on the industry, and understanding these factors is essential.
...we advise people can do things on our platform such as purchase securities. But our real bread and butter is actually taking setting up long term investment plans for our investors...
Understanding the trading journey at StashAway
At StashAway, investors place orders to buy securities through the mobile app. The orders get netted and sent to brokers, such as Saxo or banks, for trade execution. These trades need to get converted into different currencies, routed to the relevant exchanges, purchased, and then sent back to custodians and trust accounts. There's also a human factor, as their team curates individual portfolios based on the investor's needs. Reporting, rebalancing, and reoptimizing portfolios are other important aspects, adding to the complexity of managing the various processes involved.
Alex's product discovery process and insights on trust (12:55)
Product discovery process at StashAway
Alex is passionate about product discovery and uses it to better understand customer needs. The below 2x2 enables them to tailor services accordingly and ensure that long-term investment plans align with investor expectations.
Understanding and building trust is crucial in fintech
As a fintech company, understanding the needs and behaviors of clients is crucial to building trust. For example, when you personalize and localize your services for different countries, cultures, and markets, you can build trust by being transparent with pricing, highlighting the team behind the company, and addressing any client concerns or issues that may arise. Additionally, fostering open lines of communication, such as customer support lines and providing information on the product through various channels, can help establish trust with clients. Trust can look different across different cultures, markets, and personas, and understanding the nuances of trust in these contexts can help ensure a product's success.
Understanding trust: comparing financial trust between developed countries and emerging markets (32:08)
Financial trust in Singapore is transparency
According to Alex , financial trust in Singapore boils down to how transparent a company is with its pricing and whether it offers the cheapest option for the desired service. Being a country built on financial services with high financial literacy, every basis point counts due to intense competition.
"Trust comes more down to actually, are they being super transparent with the pricing? And is this the cheapest option for the level of service?"
Financial trust in emerging markets is integrity
On the other hand, trust in emerging markets like Thailand is more about the integrity of a company. Since there have been many cases of scams and issues with regulatory bodies, people want to know if a business is real and trustworthy before even considering pricing or service quality.
"In Thailand, there's many more examples where these have been scams. Right. So people want to go, who are these people? Are they a real business? I mean, let alone are they regulated or not? Because there's been historical issues."
Online resources and networking can help build cross-functional domain expertise
To build domain expertise in areas like lending, payments, insurance, and investment, it's crucial to take advantage of the wealth of online resources such as Investopedia and Google searches. One of the most effective ways to learn about these industries is by speaking with people currently working in them. Networking, attending events, and engaging in casual conversations can help to build your understanding of the industry and how it operates on a practical level. Additionally,
- "Inspired" by Marty Cagan
- "Escaping the Build Trap" by Teresa Torres.
- Reforge: valuable content related to experimentation and discovery process.
Increasing financial literacy across all markets is crucial
Despite living in an age where information is readily available, Alex believes that financial literacy and understanding of investment philosophies still remain low across all markets, even in mature ones. This has led to a significant number of investors being in the wrong products for the wrong reasons. To address this issue and improve investment behavior, it's vital to raise awareness of the importance of financial literacy even from a young age, encouraging people to learn about different investment strategies and how to make their money work for them.
Investment tech: financial literacy, investment behavior, and new asset classes (42:26)
Exploring new asset classes and investment opportunities
Alex is excited by the ongoing development of novel investment opportunities and asset classes, with previously inaccessible private investments and private market opportunities now becoming available to investors. This trend democratizes access to investment opportunities that were once reserved for private banking clients with substantial capital.
Fintech must be mindful of the balance between increasing usability and encouraging inappropriate investment behavior
Alex acknowledges that while building an accessible and user-friendly mobile application for his clients, it is important to be mindful of not encouraging unnecessary checking and monitoring of investments, as this can cause anxiety and a focus on short-term performance instead of long-term goals. Financial companies need to strike a balance between providing information and promoting healthier investment behaviors.
I feel that it's not in the interest in our case of our investors based on the types of investment methodologies we employ. We're not trading house, we're long term investment house. I'd say I don't want people clicking every day and looking at the performance for products which have a five year time horizon.
What new investment opportunities Alex sees in Southeast Asia (51:15)
Embrace Open Banking to benefit End Consumers in Southeast Asia
Alex highlighted the potential for Open Banking in Southeast Asia to increase standardization and accessibility of users' transaction information, allowing for innovation and improved customer satisfaction. Open Banking, which has seen rapid adoption in Europe, can provide greater personal data access to create personalized solutions. Cringle says this is needed in the region with its expanding use of digital banking services, and multiple bank accounts and currencies across countries leading to consumer confusion.
How open banking can benefit end consumers in Southeast Asia (55:22)
Regulatory advocacy for disruptors is crucial for consumer benefit
It's important for disruptors in the financial services sector to have a voice at the regulatory and government levels to push for policies that help end consumers. Traditional financial institutions may not have the same incentives to prioritize consumer benefits due to their historical context and established ways of doing business. To encourage innovation and positive change, regulators should include and listen to disruptors' perspectives.
Emphasize long-term value over becoming a "unicorn"
While there is a trend for startups to aim for unicorn status, it may be wiser to focus on long-term value and sustainability. One venture capital firm has argued that businesses should aim to be more like a rhinoceros, able to survive for many years, rather than shoot for rapid, unsustainable growth. Some of the biggest companies in the world have been around for 50+ years because they took a long-term approach to building value.
Alex's recommendations for learning about Investment Tech (59:24)
Visit Investopedia for learning about Investment Tech
One way to learn about Investment Tech is by visiting Investopedia, which is considered the "Wikipedia of the finance world". It provides numerous articles on managing money, investing, and personal finance. Investopedia's highlighted articles on its homepage can be especially helpful for those just starting out in the subject.
Reach out to people who create valuable content in the finance space
There are some finance influencers who create good content that resonates well, especially with younger people. However, one should be cautious while evaluating the quality of content provided by certain influencers, as not all of it may be as insightful or useful. Connecting with influencers through platforms like LinkedIn or subscribing to their newsletters can help you learn from their perspectives.
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