Grab is looking to tap the trillion-dollar wealth market across South-east Asia by offering low-cost investment products. 

Armed with a huge ambition of seizing South-east Asia's wealth management market, Grab will first offer simple cash products offering a yield above the small interest derived from cash sitting in banks, said Reuben Lai, senior managing director of Grab Financial Group.

«What we don't want to do is what typical financial institutions do where they charge 3 percent to 5 percent upfront - it's a huge put-off. We are going to do away with all these upfront fees and have a pay-as-you-go model in a very transparent way," said Lai, who was quoted in «Business Times» (behind paywall).

Partnerships To Propel Growth

Grab will work with various asset managers and banks to offer cash products by the first half of next year, followed by more complex products later. It will study whether the products are relevant for mass consumers in both pricing and liquidity, he added. 

The firm could also partner or invest in a platform, which could be a regional or global player. As local banks have not been aggressive in pushing exchange-traded funds (ETFs) despite their low-cost nature, Lai believes therein lies opportunities for Grab Financial.  

Low-Cost Products Attractive

«I don't think fees (out there) are low,» said Lai, even though some banks here have savings plans tied to investments such as ETFs.

DBS has recently launched ETF products with a flat annual management fee of 0.75 percent without a further sales charge, platform fees and lock-in period.

Tapping On Former Veterans

To boost the team in its next phase, Grab recently hired Philip Chew, an investment veteran from powerhouse BlackRock, to run Grab's investment and new business unit.

It has also hired Leslie Teo, former GIC chief economist, to head up its data science team, with the aim of looking at how to better price financial products, Lai said.

Pay-As-You-Use Model

Grab's pay-as-you-use models for its consumer finance push gained traction as 70 percent of its drivers in Malaysia have signed on the usage-based insurance sold by Grab's partner Zhong An Insurance that offers per-day coverage for a daily payment.

Given the bigger push into wealth and insurance, GrabPay will look to engage the mass affluent in the coming months as well, having become the dominant e-wallet in Singapore, Malaysia and Vietnam, said Ooi Huey Tyng, who manages the GrabPay business in most of Southeast Asia. 

Another Ant Financial?

In about 18 months, GrabPay secured e-money licenses in six countries, and now commands the largest total payment value (TPV) in three, she said, while declining to disclose the absolute figures. With the rapid build-out of the GrabPay wallet, the TPV has also more than doubled in the last six months.

«Many people will say: 'Are you trying to do an Ant Financial?' And my answer is: 'China is one country, we are 10 countries'. It's very, very different. With the one time the partners plug into us, they get access to our 170 million subscriber base in South-east Asia... and the licences that we've acquired,» said Lai.