Changes in the private banking industry over the past decade, particularly in terms of regulatory requirements, have taken business away from these players, while increasing the cost of business, Kristal.AI's head of private wealth told finews.asia.
«As a natural outcome of that, private banks are forced to go after larger-ticket clients, at the expense of the rest. This segment gets pushed to the retail side, which is dangerous territory – at this level, there is neither advice nor product. It is just monetization,» Kristal.AI's Swapnil Mishra, said in an interview.
The digital wealth platform caters to the affluent or emerging high net worth segment, which has between $50,000 and $5 million to invest, and aims to bring personalized investment advice to them at a mass scale using artificial intelligence.
«This group wants more than what robo-advisors offer. Kristal aims to deliver products, services and advisory that a big private wealth bank provides, but in a technology-first way so the business model is cost-effective and scalable,» said Mishra, who joined the company earlier this year from Deutsche Bank, where he was a managing director.
Growth in 2020
Turbulent markets during the Covid-19 pandemic has proved to be a boon for the platform. Assets under management have more than doubled in 2020 to reach close to $200 million, while client numbers have grown about 300 percent during this period, said the platform's Asheesh Chanda, CEO of Kristal.AI, said.
«Fortunately for us, Covid-19 turned out to be a positive event, because it greatly reduced the sales cycle that previously required a lot of face-to-face interaction. A lot of portfolios in various other places, which had a lot of product push and opaqueness, also went through certain stresses, which caused people to reach out to us to see how we could help,» Chanda added.
In 2021, Kristal.AI is looking to expand its presence across the markets in which it operates, as well as increase the breadth and depth of products available to clients. «We need to solidify our presence in Singapore and Hong Kong, but we're keeping our eyes and ears open for more geographical expansion, which will come in tandem with any new funding rounds,» the chief executive said.
New Digital Players
Chanda is looking forward to the introduction of new digital banking players in the region, particularly the tech companies that are going into financial services, as an opportunity to grow Kristal.AI through partnerships.
«When it comes to wealth or personal finance, it is not a pure tech product. You need the right combination of financial knowledge and tech expertise, and we speak the same language as these players,» Chanda said.
Founded in 2016, Kristal.AI is licensed to operate in Singapore, Hong Kong, and India, and raised a seed round of $6 million in January 2020. It currently serves more than 10,000 users from 22 countries.
