Robo-advisor launched in Singapore’s sandbox

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Kristal Advisor’s robo-advisory platform, Kirstal.ai, has been launched in Singapore with the help of the Monetary Authority of Singapore’s sandbox programme, according to Asheesh Chanda, Kristal’s founder.

The robo-advisory platform has been live in the Lion City for three months, Chanda told FSA. The platform can be accessed by both retail and accredited investors in Singapore, but with certain limitations as it is still in the sandbox programme, he noted, without elaborating.

Last year, the firm launched its service in Hong Kong and then in India during the second quarter 2017.

In Hong Kong, it is allowed to carry out asset management and advising on securities activities to professional investors, according to the firm’s website.

Machine learning technology

MAS’ fintech regulatory sandbox, which was launched last year, allows firms to develop and test fintech solutions without full compliance.

Since its launch, the regulator received around 30 applications to play in the sandbox, Ong Ye Kung, Singapore’s minister for education for higher education and skills and second minister for defence, said in a speech during the Singapore Fintech Festival yesterday.

Kristal was one of the sandbox firms that was highlighted in Ong’s speech.

“Rather than the usual way of recommending investment portfolios based on a set of pre-defined rules, the solution uses machine learning to continuously analyse and learn from the investor’s ongoing decisions, with the aim of making better recommendations to the investor,” Ong said.

“This involves untested technology and an unconventional fund manager, so we set up some boundaries within which Kristal could test its technology in a live environment with real customers,” he said.

Kristal.ai has around 50 portfolios, according to its website. It has access to 12 countries and has average fees of 0.5%.

Of the 30 applications that the MAS received, half of them did not require the sandbox, Ong noted. Many did not need any regulatory exemption and the MAS gave them a green light to launch their solutions.

Only one has “graduated” from the regulatory sandbox, which is an insurance broker called PolicyPal. The remaining firms are still in the sandbox, have been approved to enter the sandbox or are in discussions with MAS on their applications, he added.

“MAS will expedite the sandbox application assessment so that firms can test and launch their innovative solutions faster,” Ong said. “MAS will also further loosen the regulatory boundaries for sandbox cases where the risks do not outweight the potential benefits of the solutions to customers,” he added.

Besides Singapore, other markets that have sandbox initiatives are Hong Kong, Malaysia and Thailand. Taiwan is expected to be the fifth to launch a regulatory sandbox.

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