Citi Plus, which was piloted last December, offers a range of investment products including mutual funds mostly managed by Aberdeen Standard Investments (ASI), Franklin Templeton and Allianz Global Investors, as well as stocks and money market funds, according to a statement by the bank this week.
The target client segment are “digital natives”, typically defined as young people born since 1980 who have grown up with computers, the internet, video game consoles, mobile phones and social media.
“Millennials were invited to participate in research and the co-creation process, through which we could better address target clients’ pain points, and help them grow their wealth via the new service,” said Lawrence Lam, consumer business manager of Citibank Hong Kong.
MUTUAL FUND PARTNERS
For one of Citibank’s partners, Aberdeen Standard Investments (ASI), it is the first time it has used a digital wealth platform in Asia to distribute its funds directly to investors.
“It’s an important part of our regional distribution strategy for 2021,” said Andrew Hendry, head of distribution, Asia Pacific, at ASI.
“First, we are able to reach a new segment of clients – and vice versa in that they have easy access to our funds. These are people who are not using physical branches to manage their finances and therefore not looking for in-person wealth advice. The digital channel gives them access in the way they want it,” Hendry told FSA.
“Second, it allows a much broader group of people to start investing, because the traditional impediments to ease of investing have been taken away; they can transact any time via an easy-to-use app and in investment amounts as low as HK$100 ($13),” he said.
Initially, ASI is offering eight of its funds, with mandates ranging from income generation to equity growth. These include the Asia Pacific Equity, Asian Smaller Companies, Global Dynamic Dividend, Select Euro High Yield, EM Corporate Bond, Frontier Markets, Select Emerging Markets Bond, and Japanese Equity Funds
“We selected some of our key strategies across a diverse range of asset classes in order to meet Hong Kong investors’ different investment needs and risk appetites,” said Hendry.
The funds will continue to be distributed through traditional wholesale channels, such as banks and recommended lists, although Hendry believes that “digital technology will enable distribution and these innovative models will only increase in the future”.
“In addition, we are successfully developing a new wholesale model which combines the technology, separately managed accounts and our best-in-class funds to help wealth managers,” he said.
Meanwhile, Franklin Templeton is offering 42 funds on Citi Plus, which are authorised by Hong Kong’s Securities and Futures Commission.
“We are constantly on the lookout for opportunities to connect with tech-savvy investors in the digital ecosystem and make our products more accessible online,” Vivek Kudva, head of Apac distribution, Franklin Templeton, told FSA.
In September 2020, Franklin Templeton and Singapore’s Razer Fintech signed a memorandum of understanding to develop a strategic collaboration in digital wealth management that will target millennials in Singapore, Malaysia, the Philippines and Vietnam.
OTHER FEATURES
A key feature of Citi Plus is a series of modules designed to educate clients when it comes to making decisions about managing money, building wealth and achieving financial goals, according to Citibank.
For instance, “wealth smart” is a financial literacy guide covering a series of “easy-to-follow courses and quizzes, with bite-sized content that helps clients level-up and approach investments with greater confidence,” according to the statement.
“Wealth digest”, a personalised series of news, articles and insights on wealth, and “money goal”, a tracking tool that helps clients define financial objectives and monitor their progress, will be available later this year.
Other financial services already available through the Citi Mobile app include, “interest booster”, which enables clients to earn additional interest on savings; “flexi wealth, which allows people to start investing in money market funds with as little as HK$1; and a “global wallet” for clients to exchange foreign currencies at preferred rates without paying handling fees, according to Citibank.
