Lu Global chief executive Kit Wong shares how the wealth management platform has grown by focusing on customisation and tailoring their offerings to the customers’ specific needs in different markets
Amidst geopolitical uncertainty and challenges in financial markets, Singapore-based wealth management platform Lu Global has continued to grow. Chief executive Kit Wong has revealed that to date, the platform has over 300,000 registered customers and 19,000 active users.
Wong attributes the company’s sustained success to customer focus, which he calls the key to growth. “We spent time interacting with customers who signed up and are transacting to understand pain points, what they are searching for. The key product innovations are in line with customer feedback”, he said.
The sign-up process is a good example of this. Singapore’s know-your-customer (KYC) requirements tend to make the sign-up process a tedious one. Lu Global addressed this with the use of Singapore’s MyInfo for validation, making onboarding simpler and easier.
Using engagement to build familiarity
Wong also puts a premium on customers’ engagement with the Lu Global app. The underlying principle behind this is that the more engagement there is, the more familiar and comfortable customers become with the products. After a range of engagement opportunities, many reach a comfort level and become active on the platform.
“We engage customers in the app with questions, notifications. We keep reminding customers, giving them updates of things that are happening on products, and explanations of a product”, Wong said.
Lu Global is also constantly testing new models and “trying slightly different things” to drive greater engagement. Wong stresses the need to come up with “different approaches to engage in a new service, product or education”.
For instance, some people need more human engagement as the first trigger for investing. Some customers need a more detailed explanation on available products before they open accounts, which prompted Lu Global to start doing customer events. Wong noted that consistency and fulfilling customer needs are important to ensure customer satisfaction.
Beyond events, the firm seeks feedback from customers who are not active to find out why they are not using the service. Wong has also shared that they are devoting resources to produce explainer videos on wealth management as well as development voice-driven apps, something that he expects to be commonplace in the near future.
So far, Lu Global’s engagement efforts seem to be paying off. When Lu Global first opened the platform, customers increased their assets under management (AUM) over a period of 12 months. Now, customers are increasing AUM within three months. For Wong, the increase in assets over a shorter period of time is “a good indication of customers becoming more comfortable” with the platform.
Adapting to specific markets and customer behaviour
Customisation is quite important. While delivery cannot be totally customised, Wong maintains that there can be significant customisation by market. “You’ll see more and more (that) a cookie-cutter approach will no longer be valid”, he said.
Lu Global’s product range is proof of this. They have seen a shift in the current economic environment wherein customers have increasingly moved money from equity funds into private debt and private equity. “Part of that is the nature of the product. Private equity is a long-term product and the equity market is highly volatile”, Wong explained.
They have also launched in November a marketplace that allows customers to list a product within a certain price band and sell it before it matures. It provides customers who, for example, purchased products with 12-month or 18-month maturities a way to exit the product after a shorter period. In the past, they had to wait until the product matured. The volume in this marketplace is still small, but Wong sees a good opportunity in it.
Additionally, with the regional nature of the app, it became necessary for Lu Global to maintain consistency across markets while still understanding local changes and catering to individual market needs. One change it has made recently is to work with partners and intermediaries in several countries in Southeast Asia, offering them the Lu Global technology platform for their local market.
“In cases that require customisation, we’re working with a partner to access the market. We are focused on making sure local regulations, local customer behaviour patterns are appropriate. We create a customisation layer that we adapt to become more local, while maintaining a shared back end”, said the Lu Global chief executive.
Setting sights into the future
Looking ahead, Wong sees further fragmentation and believes that the wealth management space will become more competitive. “The market has not reached a stage where players are being consolidated. We see a lot of new entrants, startups moving down to private equity for the masses. Everyone has different approaches. More (firms) will go from payments to wealth management. Then, they will start to consolidate. We are following it quite closely”, he said.
Lu Global plans to remain focused on the diverse markets of Southeast Asia for 2020. Each market in the region has different regulations in place and there is a need to tailor products to local conditions. In Indonesia, for example, small, regular types of transactions are commonplace; while in Singapore, transactions are often in big lump sums. Wong is confident that their technology is adaptable enough to address the needs of these markets.