The Israeli startup, founded in 2012, constructs fixed income portfolios based on about 100 parameters as well as user preferences such as target yield or duration.
Bondit’s key clients will be private banks and wealth managers, who can hopefully scale their businesses by automating the portfolio-building process, managing director Adrian Gostick told FSA.
Some private banks have limited capacity to serve their clients, and in some cases, “they can only manage to serve 20% of the customer base”, Gostick said.
For its existing customers, each of them usually has a custom universe, which involves 1,000-2,000 bond subsets. By inputting preferences such as target yield or duration, the Bondit platform will then analyse the data and come up with a portfolio. A typical portfolio will normally comprise 10-20 bonds totaling a few million dollars, Gostick said.
The automation also reduces the bond screening process from hours or days to minutes, he added.
The firm was selected as one of the three companies under OCBC Bank’s fintech accelerator program to conduct pilot tests with Bank of Singapore in August. Another Chinese bank also recently joined to use the platform, he noted, with other clients from the US and Europe.
Bondit opened an office in the Cyberport in Hong Kong earlier this year, targeting the wealth management pool in the SAR as well as the untapped market in onshore China.
Wind Info, the dominant financial data provider in China, invested an undisclosed amount in Bondit, according to their joint-statement last week.
“We expect demand for China bonds will grow dramatically 1-2 years after they are included in the global indices,” the firm said.
Bondit also hopes to make use of Wind Info’s data set to include onshore bonds on its platform, as well as its distribution network to build the onshore business, Gostick said.
While many bonds in Asia do not have ratings, he added there’s a plan to collaborate with credit rating agencies to give market-implied ratings to the bonds.
Customers also include asset management firms, where the technology has the potential to support or automate the portfolio selection process, the firm said.
