Free DIY investment portal aims to tap huge potential market of savers as deposit protection dwindles.
Featured in the TECHNOLOGY Section of the Bangkok Post April 4, 2012 issue, written by Suchit Leesa-Nguansuk
Like it or not, money is power. And if you're not the type who likes to exchange daily phone calls with a private wealth adviser, you can act the part by using technology to build your power.
With the launch of the country's first free-to-use website wealthmagik.com last week, doing so could not be easier.
The online private wealth management service is specially designed to help ordinary people manage their investments and finances by matching specific investor profiles with equity funds that suit them best.
"Given the existing low savings interest rates, investors are increasingly seeking higher returns from their investments," said Somkiat Chinthammit, chief executive of Wealth Management System Co, a financial software provider under the Bonanza brand.
The Deposit Protection Agency in August will cut the deposit guarantee to 1 million baht per depositor per bank, the last in a series of cuts aimed at reducing the government guarantee burden. Of the country's total deposits of 7.55 trillion baht, a large portion is expected to be shifted from bank accounts to other types of savings instruments as a result.
"The move will provide huge potential for our future growth," said Mr Somkiat, who was a banker before he became a software entrepreneur.
Wealth Management System spent 10 million baht over the past three years on research and development before launching the portal.
Mr Somkiat said Wealthmagik.com provides various resources of investment knowledge _ from educational resources for children to savings plans for new house purchases and retirement. It also has qualitative information to categorise investors based on the financial constraints they face.
To create a profile, a user needs to register and fill out basic information such as gender, marital status, salary and level of acceptable risk. The site will then automatically suggest or filter appropriate mutual funds that suit his profile.
A simulated portfolio is also available to help users make decisions.
Unlike bank staff, who tend to recommend funds affiliated with their institutions from which they generally earn commissions, Wealth Management System provides a neutral perspective. It can suggest products from different asset management companies in its database, Mr Somkiat said.
Target customers are first jobbers, LTF and RMF buyers, housewives, bankers and financiers aged 25-55, with monthly incomes of 60,000 baht or more.
The company's major corporate customers are banks, financial institutions and securities firms with combined transaction values of 2.55 trillion baht, and the Social Security Office.
Wealthmagik.com over the next 15 months plans to offer mobile applications for smartphones and tablets operating on Apple's iOS and Google's Android operating system.
By year-end, the company will also support smart TV applications, allowing users to search for investment information through smart TVs at home.
"We expect to have at least 100,000 users within five years, with potential to earn revenue from commission fees in the near future," Mr Somkiat said.
Wealth Management expects to offer full trading services and earn commission fees when users choose a fund investment once the Securities and Exchange Commission issues new licences for equity fund trading.
Mr Somkiat says he believes financial services have high potential, especially those available over mobile phones, thanks to the increasing use of mobile and online banking and stock trading.
Thanachart Numnonda, director of Software Park Thailand, said mobile financial-service apps were an emerging opportunity for local software developers. Given the current 450,000 tablet users coupled with 2-3 million smartphone users and 17.5 million internet users, mobile financial apps have high growth potential.
In addition, new forms of social networking-based financial services including Facebook Credits, a virtual currency enabling users to buy online games on Facebook, add to a lucrative market for online financial services.
However, Dr Thanachart said the success of financial apps would depend on service innovation and accommodating regulations.