The Lu HK app allows customers to open their accounts online within three minutes, with instructions driven by artificial intelligence (AI). The process includes investment preference questionnaires to identify customers’ risk thresholds and big data analysis for making fund recommendations.
It offers a selection of Hong Kong dollar-based mutual fund products, covering all major markets and asset classes, and transaction fees for all products are waived for a limited time, according to a statement.
“The product offers 24-hours-a-day, seven-days-a-week integrated wealth management services to Hong Kong customers,” the firm said.
The Lu Wallet service in the app provides same-day completion of transactions (T+0), and flexible redemption and purchase. Customers can subscribe for funds at a minimum of HK$1, transfer their cash balance to money market funds automatically, withdraw and redeem anytime without penalties, and directly purchase a variety of other investment products.
“Apart from our AI frontline customer services, we also apply different technologies to our middle and back offices to optimize operation efficiency,” said Cai Hua, CEO of Lu Hong Kong.
The launch of the app comes after Lu International in Hong Kong, which is a subsidiary of Shanghai-based Lufax Holding, gained a a Type 1 (dealing in securities) license from the Securities and Futures Commission in late-June. The license enables the firm to trade shares, bonds and mutual funds for individual investors.
The firm already held Type 4 (advising on securities) and Type 9 (asset management) licenses. According to regulatory requirements in Hong Kong, financial institutions must have Type 1, Type 4 and Type 9 licenses in order to offer wealth and asset management services.
“Hong Kong is at the forefront of international financial markets, in terms of the maturity of its regulatory framework, the depth of its trading markets and the diversity of its financial products,” said Cai.
“Due to the pandemic, global demand for online financial services has increased significantly[which] has accelerated digital transformation in the wealth management industry,” he added.
Lufax, which is owned by Ping An Insurance, had around 44 million registered users on its Mainland China platform as of the end of last year, according to the statement.
Hong Kong is the second stage in the overseas business expansion of Lufax, which hopes to attract clients from the growing wealth management market in the Guangdong-Hong Kong-Macao Greater Bay Area.
In July 2017, Lu International (Singapore) Financial Asset Exchange was launched in the Lion City after gaining a capital market services licence from the Monetary Authority of Singapore, which awarded Lui International a recognised market operator license to provide services to Singapore residents in February last year.
The firm launched its Lu Global online platform in Singapore in September 2018, which was targeted to accredited investors in the country and to mass-affluent investors in Southeast Asia.
Traditional wealth managers, as well as fund distributors, throughout the world are facing growing competition from online services and robo-advisors, and are being forced to upgrade their digital products.
For instance, last November DBS launched its i-Wealth app in Hong Kong, which promises quick, convenient account opening for wealthy individuals, as well as access to a range of equity markets and currency pairs.
Among online platforms, Singapore-based digital wealth manager Stashaway last month completed a $16m Series C fundraising, which it plans to use to expand its wealth management services in Singapore and Malaysia.