Maybank Launches Digital SME Financing Platform With 10-minute Approval Time
- By CompareHero.my
- September 21, 2020
If you’re a small and medium-sized enterprise (SME) looking for extra financing with ease, you may want to check the Maybank SME Digital Financing platform. Launched last week, Malayan Banking Bhd (Maybank) states that it only requires a mere 10 minutes – the same time it takes to down a cup of coffee – to get a financing approval, and the application can be completed entirely online. It also happens to be the first of its kind platform to offer an end-to-end digital experience with full straight-through processing (STP), from application to approval and, finally, disbursement. “It’s fully automated – from application to approval – within 10 minutes and without any human intervention,” said Datuk Hamirullah Boorhan, Head of Community Financial Services Malaysia, Maybank, at the launch ceremony. “And if you’re an existing Maybank customer, you can get your disbursement within one minute, so this is fully automated.” This hassle-free and convenient digital solution is another way that Maybank is hoping to aid the SME segment in Malaysia as part of the organisation’s overall objective to make financing more accessible to the SMEs. “One of the perpetual challenges that we face as an organisation is to explore how we can do more for our customers in the SME segment. This is a challenge because we need an approach where the risk is acceptable to the bank,” said Datuk Abdul Farid Alias, Maybank Group President and Chief Executive Officer at the launch. “After successfully launching our retail SME model several years ago, our SME team started exploring how we can extend credit to the SME sector using a popular method known as machine learning.”
Contents
Overcoming a common barrier for SMEs – external financing
SMEs play a crucial role in economic development – Malaysia’s SME sector contributes 38.3% to GDP and provides employment for over seven million people, according to the SME Annual 2018/2019 Report. Despite this, they still face many challenges that may act as barriers to their growth. Among them include access to external financing, better cash flow management, and a more effective payment system, as well as non-financial needs such as input cost mitigation, access to cheap quality labour, and a business-friendly climate.
Financial institutions are still the dominant source of financing for SMEs – In 2018, RM307.3 billion was disbursed and RM69.0 billion in new financing approved to over 123,600 SME accounts. (Image source: SME Corp)
Maybank’s latest digital solution offers another financing alternative for SMEs who are on the lookout for extra cash for their business.
Additionally, the launch of this solution, Abdul Farid of Maybank said, is a breakthrough in the bank’s SME financing as it incorporates an enhanced credit tool, allowing them to expand their lending relationships beyond what they’ve been doing before.
“Using our in-house data and credit knowledge while leveraging machine learning capabilities, we are now able to measure the risks of our customers better, and provide financing even to start-ups, which have only been in operation for one year,” he said.
“As we all know, it’s usually more challenging for start-ups to secure financing due to lack of collateral or credit history. However, we can now assess their business viability and help them build successful ventures.”
Datuk John Chong, Maybank Group Chief Executive Officer (CEO) for community financial services, said the bank is looking to disburse over RM500 million over the next three months, and is hoping to disburse RM4-5 billion in the next three years.
“Overall, as a business for SME, we are projecting to disburse about RM35 billion over the next three years. This digital loan platform represents about 17% of total disbursement,” he said.
On whether the asset quality of the new platform may be of concern, Chong said, the asset quality of Maybank’s SME portfolio – as a whole – is very low and “manageable.”
“We are also using data from what we’ve done in the past, together with the data that we have on customers, or credit knowledge and technology, I think. we are able to manage asset quality very well,” Chong said.
To date, Maybank’s loan growth for the SME segment, Hamirullah said, has reached 15% compared with last year’s growth of 12%. “Maybank is projecting about 18% growth this year from the SME segment with RM35 billion disbursement targeted in the next three years,” he said.
The platform runs on Maybank’s rich data bank which is based on information that they have collated from customers and, Chong said, is what the bank uses as part of their machine learning. “We combine technology, the data that we have on the customers, and our credit knowledge. It’s a combination of everything. With that, we came up with this platform.”
With this new solution, SMEs can apply for financing online via Maybank2U or Maybank2U Biz platforms 24/ 7, without having to visit a branch.
The application process requires minimal information and no documentation for existing customers. Funds can be disbursed within one minute upon acceptance of the offer for eligible (usually existing) customers.
New customers, on the other hand, will have to undergo a brief on-boarding verification process but with no branch visit, prior to approval of application, and decisions will be provided within two working days.
Through Maybank’s collaboration with Credit Guarantee Corporation (CGC), they are able to provide guarantee coverage for its online PXG/PGX financing – one of the products offered on the digital channel with a guarantee coverage of up to 70%.
Benefits
- Receive application status as fast as 10 minutes*
- No documents required*
- Financing disbursement as fast as 1 minute**
- No collateral required
- Available online 24/7
Eligibility
Open to both Maybank and non-Maybank customers who are Sole Proprietors, Partnerships or Private Limited companies (Sdn. Bhd.) with:- Less than RM25million annual sales turnover
- Less than RM5 million outstanding loan/financing with Maybank
- Malaysian-owned registered company
- More than 1 year in operation
Financing facility
- Term loan or Commodity Murabahah Term Financing-i (CMTF-i)
- Between RM10,000 to RM250,000
- Tenure up to 5 years
Required documents to submit online
No documents required if you’re already a Maybank customer. If you’re new to Maybank:- NRIC of Directors / Shareholders / Proprietors / Partners / guarantors (passport if foreigners)
- Business Registration document
- Trading license (for businesses operating in Sabah & Sarawak)
- Latest 6 months bank statement (optional but these documents would increase your chances of approval)
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#DigitalCareers: 10 Ways To Upskill and Reskill Amid COVID-19
- By CompareHero.my
- September 18, 2020
With COVID-19 causing many Malaysians to live and work in the new normal, it’s time to take the opportunity to learn how to upskill and reskill yourself during the pandemic. Read the 10 tips below on to find out how.
Almost everyone across the globe is unsure of what the future holds right now – economies are either just starting to pick up or recovering and many people are still unemployed, so if you’re looking to switch jobs, just starting to look for one post-graduation, or are trying to hold on to your current position, the uncertainty of what’s to come may leave you feeling slightly worried.
And to add to that mix – the nature of work is changing too: gone are the days of sticking to just one company for the rest of your life, as more people are turning to portfolio careers – a way of working that incorporates multiple jobs across different fields. One popular estimate states that 65% of children entering primary school today will end up working in jobs that don’t yet exist.
Thus, in today’s pandemic-inflicted economy, it is important to be agile to the demands of the market. This means one should constantly pick up new skills, through upskilling and reskilling, and keep abreast of the latest developments in your respective working fields.
One does not necessarily need to spend a fortune or use much of your company’s budget allocation to upskill or reskill, as there are plenty of ways you can enhance your skills that don’t cost much. And if you are still stuck working from home, then there’s no better time to start improving your career.
So, let’s get right into it:
Contents
- 1. First, identify your objective
- 2. Do you know your strengths and weaknesses? Find out what they are!
- 3. Then find out how to improve
- 4. Pick up a new language
- 5. Build your LinkedIn network
- 6. Learn to be more digitally-savvy
- 7. Brush up your technical skills aka hard skills
- 8. Make time to improve soft skills
- 9. Volunteer outside comfort zone
- 10. Read, read and read!
- Takeaway: stand out by upskilling and reskilling
1. First, identify your objective
Make a list of your career goals so you can clearly identify what types of skills you need to build or enhance to achieve your career dreams.
What are you trying to achieve or improve? Why would you like to learn social media marketing? Perhaps you’re trying to start your own small business which would utilise a lot of social media. Maybe you just want to improve your soft skills like public speaking so you can become a more confident person.
Figuring out your goals helps you stay focused and narrows down the types of efforts you need to take. It could also help keep you motivated and driven.
2. Do you know your strengths and weaknesses? Find out what they are!
When people ask you what your strengths or weaknesses are, can you answer it instantly? If yes, good for you. If not, we’ll share why it’s important to be able to do so.
Knowing your strengths and weaknesses aren’t just crucial when preparing for job interviews, it’s equally important to know your own qualities – or lack thereof – in general, for your own self-awareness.
And though many may get the strengths down, the same can’t be said of the latter because when we think of ourselves, very rarely do we think of our weaknesses. It’s human nature to ignore or push aside our shortcomings, and having the willingness to admit your mistakes and recognising where you can improve, comes with its own perks.
Run an individual skill audit via Barclays Life Skills’ wheel of strengths to find out what are your weaknesses and strengths.
One of the best things you can do for yourself is to invest in your well-being and self-development.
3. Then find out how to improve
Now that you’ve understood what your strengths and weaknesses are, it’s time to take action to improve yourself. Figure out what you can do to reach the objectives you’ve set for yourself.
Sometimes this requires a lot of research, googling and asking around. For instance, if you need to improve your self-esteem, maybe it would be a good idea to sign up for professional classes or to get a life mentor who can help guide you through that. If you want to improve your technical skills, then you might need to dedicate more time to training or by taking courses.
Finding the right solutions to your problems is as important as figuring out the problem itself as not all solutions work for the same problems.
Read also: Job Loss Amid CMCO: How To Bounce Back From Retrenchment
4. Pick up a new language
In today’s increasingly globalised world, it is only to your advantage to be fluent in another language. Not only will you get access to more opportunities by being multilingual, but you’ll also learn to connect with more groups of people which will help in building new relationships, personal or professional.
You’ll have a greater chance of demanding a higher salary if you have the ability to speak and write in another language. But of course, this depends on the type of language – some are more in demand than others. If you work in the United States, for example, Spanish will be more in demand because of the higher number of Spanish speakers.
If you are working with a company that is involved in a lot of international trade, then it might be useful to pick up languages like Mandarin, Japanese, and Arabic – according to the World Economic Forum, Arabic is the 5th most powerful language in the world,
5. Build your LinkedIn network
The connection between upskilling and reskilling and LinkedIn may not be immediately clear but knowing how to use LinkedIn properly, and strategically, will help you get to where you want to be or need to, by connecting with the right people.
The impact that LinkedIn brings to the job market is evident – the platform now tops half a billion users in more than 200 countries, so clearly, it is a good site to connect to leaders, B2B networks, potential hires and business partners.
If you’re not someone who could naturally network or start a conversation with connections, LinkedIn is a good place to start – it’s like the training wheels on a bike. LinkedIn works because it’s a platform that teaches you how to be more visible, informed and attuned to the latest trends within your field.
But what exactly about LinkedIn should you know or learn about? Well, when connecting with people, you can learn how to customise your request invitations to fit a particular audience. Or you could also sharpen your storytelling skills and pick up social media management when you plan your own content.
Building up your LinkedIn profile takes real skills, and it’s these skills that you’ll acquire if you use it often and strategically enough.
Millennials and Gen Z, who are typically more digitally-savvy than other generations, have the advantage of knowing how to acquire digital skills faster.
6. Learn to be more digitally-savvy
In today’s digital world, having basic digital skills no longer sets you apart from other employees compared to, let’s say, two decades ago.
Now anyone can publish content online if they know how to operate digital tools like Facebook, Twitter or WordPress.
Additionally, the emergence of millennials and generation Z in the job market has made it more competitive as these two generations are typically known to be more proficient with digital tools – and though there’s some truth to that belief, it’s not entirely false.
Additionally, some of these digital tools are not that complex. With some training, practice and constant learning, anyone can be able to practice – if not master – digital tools that don’t require deep technical knowledge.
For instance, if you’re in marketing, it’s good to enhance your digital marketing skills. Learn the basics of social media marketing via Facebook ads or marketing automation or SEO etc. A lot of online courses, podcasts and webinars, teach the basics of these platforms.
7. Brush up your technical skills aka hard skills
If you’re an engineer or a full-stack developer or a graphic designer, now is a good opportunity to take your skills to the next level.
Create a new project or aim to achieve a new goal that is way challenging or difficult just so you can brush on those skills. Learn to take on more demanding tasks that challenge you mentally.
Other good moves would be to get a software refresher – as we can imagine, softwares would get updates from time to time, so it’s crucial that you stay up to date with the latest skills for that software.
For instance if you are a coder, you could learn a new coding language. If you’re not a coder, it wouldn’t be a bad idea if you tried coding anyway.
With everything going digital, it would be super beneficial for you to pick up coding skills – who knows you may end up creating the next big app!
Typically, depending on the kind of hard skill, it may or may not be easy to acquire. Some of these skills are learned in the classroom, through books or on the job.
8. Make time to improve soft skills
Though historically hard skills are still a necessity due to the demand of the position, employers are increasingly looking for employees with particular soft skills.
Generally that’s because it’s less of a hassle for the employer to train a new employee in a hard skill than to train an employee in a soft skill. Often, someone’s soft skills are also associated with their emotional intelligence (EQ).
Those who have higher EQ are more likely to work better in teams, are more adaptable and flexible to change.
That’s why no matter how good a person is technically, or no matter how many on-paper qualifications they have, if a person doesn’t have certain emotional qualities they may not be considered for the job or may not be able to reach their full potential where they are.
Soft skills often relate to the way you interact or communicate with other people. Soft skills include: communication, leadership, persuasion, time management, problem solving abilities, teamwork, and work ethic.
Some ways to build soft skills is to shadow a boss or take up a mentor – you can learn to pick up these skills from people who are already practicing it. Learning from a more experienced colleague could help some shed light on what it takes to be successful.
Part of building soft skills also requires employees to have a growth mentality. Companies with high performing, and purpose-driven employees tend to have this quality. They are always optimistic about improving, knowing that there’s always room to be better than before. These employees also tend to push themselves more often as part of their effort to grow.
9. Volunteer outside comfort zone
Not only is volunteering a great way to give back to your community, it’s also a great way to build soft skills and help with career development.
But you may be wondering how, caring for a cause or for others through the selfless act of volunteering, which at its core is supposed to be altruistic, can be leveraged for personal or professional development?
Well first – it lets you explore growth opportunities that go beyond your daily scope of work. You could either be learning from online courses or leading projects that will allow you to nurture certain skills. You may also unearthed a hidden talent that you didn’t know was there before.
Most importantly, by being of service to others, you may come across like-minded individuals, and these people – peer volunteers and fellow community members – can help broaden your worldview professionally and personally.
10. Read, read and read!
Studies have shown that staying mentally stimulated – through reading – can slow the progress of Alzheimer’s and Dementia as your brain is continuously active and engaged.
Part of lifelong learning, reading helps shape our views on the world, and further develop our own philosophies of life. The theories and ideologies you come across when reading could eventually influence your career development.
Reading is so powerful that it is that one trait that sets successful people apart from the crowd. You may have talent, resources, are creative, and have a great network base, but the key constant among the top one percent of income earners is that they read a lot according to research carried out by habit and wealth creation expert Tom Corley. That same study cites that 85% of successful people read two or more self-improvement or educational books per month.
Takeaway: stand out by upskilling and reskilling
The COVID-19 pandemic has severely affected the job market, making it more competitive than ever to secure a job.
Therefore, upskilling and reskilling have become essentials for all job seekers who would like to stand out of the crowd.
We wish all job seekers and working professionals good luck in their careers!
Also read: #StretchYourRinggit – How To Survive A Pay Cut During COVID-19
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10 Smart Ways You Can Spend RM1,000 Right Now
- By CompareHero.my
- September 17, 2020
Spend guide for Malaysians: Do you have an extra RM1,000 but not sure what you can actually do with it? You can either indulge or spend it the right way and get some benefits. We gathered 10 best ways on how and where you can spend the money.
What would you do if you had an extra RM1,000 in your pocket?
While it would be tempting to get yourself that pair of NMDs you’ve always wanted, or maybe even bring your partner out for a nice omakase dinner, there are better and smarter ways to make use of this money.
Here are 10 suggestions:
Contents
1. Pay off existing debt
If you have existing debt, it would be a good idea to take this RM1000 to clear all, if not some of it.
It would be wise to prioritise the debt that has the highest interest rate. Credit cards come with a notoriously high interest rate of 15%, and this can actually increase up to 18% if you don’t start paying back your owing!
And if you opted in for the moratorium, now would be a good time to start kickstarting your repayment. Of course, with RM1,000 there possibly could be very little that you can clear… but your debt would still be RM1,000 less than what it used to be.
Read also: 7 Strategies To Get Out Of Debt Fast During The COVID-19 Pandemic
2. Add to your emergency fund
If there’s one thing that COVID-19 taught us, is that we never quite know what the future holds. So if you can’t predict the next crisis, it’s best to prepare for it.
Why not deposit that RM1,000 into your emergency fund? Speaking of which, it would be healthy to have a buffer that will last you for at least six months if you were to lose your income unexpectedly.
Remember, your savings and your emergency fund should be two separate things. Keep your savings account for your long term goals! When life throws you lemons, you should use the former, not the latter. Not every bank has an option to separate your saving goals, so if necessary, you could always consider opening another savings account in a separate bank to build your emergency stash.
3. Put into your retirement savings
Did you know that our retirement fund (EPF/KWSP) is actually known to have a pretty attractive dividend rate? Though it goes up and down, many choose to park their cash with EPF for a slow and steady growth.
To be fair, 2019 didn’t yield the best rate (5.45% for conventional and 5% for Shariah accounts), and you can roughly expect how COVID-19 will impact 2020’s rate… but it’s still a lot better than Fixed Deposit rates.
You can easily add to your EPF account through:
- Internet banking (Online transfers through Maybank, Public Bank, CIMB, Kuwait Finance House, RHB Bank, Bank Muamalat)
- Bank Agent Counters (Cash/cheque through BSN, Maybank, Public Bank, RHB Bank)
- Registered Bank Agents (BSN)
- EPF Counters (cheques accepted, but if you’re giving cash, they’ll only accept a maximum of RM500)
Just take note that it may take up to 14 working days before your contribution is reflected in your statement. There is no minimum contribution, but you can only transfer a maximum of RM60,000 per year.
And of course, since this is for your retirement fund, expect to only be able to withdraw in your golden years.
4. Protect yourself with a personal insurance
Accidents happen, and when they do, they can oftentimes leave a huge hole in our wallet. That’s precisely why insurance companies exist – to sell us protection during troubling, uncertain times.
While there are many different insurance plans and categories, medical and personal accident policies are the most common, and for good reason too. Although Malaysians get almost-free and world-class healthcare treatments (can be as low as RM1!), we almost always will have to wait for hours, days, weeks, months, maybe even years before we get an appointment.
That’s why many opt for private hospitals, even though they can cost a bomb. If you’re familiar with how medical insurance policies work, you’ll know that they can cover a range of costs in these places.
So if you have some money to spare, it wouldn’t be a bad idea to consider getting yourself covered with an insurance policy.
5. Get a credit check and protection
The best thing that you can do for your financial health is to always keep track of it. Many Malaysians are not familiar with credit scores, but this three-digit score is actually the most important digits of our lives.
On top of that, many don’t proactively keep their personal information safe. This puts them at risk, as fraudsters are always ready to pounce on unsuspecting victims.
It will only take a fraction of RM1,000 (Less than RM100 a year from CTOS, last we checked) to check your credit score WHILE getting protected at the same time. This subscription gives you protection and alerts when your personal information and data gets leaked on the dark web, information on new credit applications and account closures under your name, as well as a change of your address and contact information.
It also gives you four MyCTOS credit score reports yearly, and alerts you for missing payments. (FYI missing payments can severely affect your credit score!) On top of that, you can also get fraud and Takaful coverage.
Read also: Ultimate Guide to Credit Scores
6. Upskill yourself
Sometimes, the best investment you can make is on yourself. You could be looking to do your MBA, or simply trying to learn a new course to upskill yourself. If you’re unable to get a scholarship for your course, you could consider taking up a loan to help you improve yourself.
In any case, investing in yourself is always the best thing to do. (Provided you actually put into practice what you’ve learned.) At the end, you’re only adding more value to yourself, which may make you a more attractive candidate to your future employers.
7. Invest your money
Ever wanted to start investing, but never had huge capital? Investing can be scary, especially in this climate… but it’s not necessarily inaccessible.
To make this easy for first-time or small-time investors, more and more companies are coming up with ways for people to invest even as little as RM100. To add to that, peer-to-peer lending models are also getting popular. If you’re not familiar, it’s basically crowdfunding your peers.
Of course, investing comes with its own risk, so do your research before jumping into anything.
Also read: How Millennials Can Start Investing From As Low As RM100
8. Get healthier
The smartest way to use your money is to do something that will ultimately benefit you. Your body will thank you for putting your health first!
While you don’t actually need to spend money to get healthy (e.g. getting a monthly gym membership when you can actually go for a run in the park for free), you can use this money for a health checkup and catch warning signs before they become full-fledged issues.
With RM1,000, you can also invest in equipment – such as a treadmill or a glucose checker – that can help you in your journey to attaining better health.
9. Fix up your car
If you rely heavily on your car to get you from A to B, it’s important that you keep it in tip-top condition so that it doesn’t give way and cause you inconvenience. (Inb4 Murphy’s Law!) Plus, it’s also a matter of life and death – you definitely DON’T want to risk your life – and the lives of other road users – by saving a few hundred bucks.
With this extra RM1,000, it would be a good idea to change your tyres if they’re getting smoother than M.J. on the dance floor. Fix your brakes if they don’t work well, sort out your air conditioning and your power windows… do what you need to so you can have a safer, more comfortable drive every day.
Read also: Car Motor Insurance Guide 2020: Which Is The Best Car Insurance In Malaysia?
10. Give it away
Give… it… away?! How on earth is that supposed to be smart?
It’s not because giving donations can come with tax benefits, but donations to the needy can really help rebuild lives. If you have an extra RM1,000 to spend, it would be great to put in some thought into how best to spend it. While you can use it to benefit your life in the ways we suggested above, you can also use it to enrich the lives of others.
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[#CHMalaysiaku] Malaysia Day Promos: 7 Wholesome Malaysian Businesses You’d Want To Support
- By CompareHero.my
- September 15, 2020
Do you want to support local businesses in Malaysia and at the same time, give back to the community? In conjunction with Malaysia Day, we listed 7 SMEs that can give you that opportunity. Find out what they are and the products they are selling.
The effects of the COVID-19 pandemic are clear: it has dismantled the economy, and effectively forced commerce into a standstill for months as most sectors were forced to halt any physical operations and operate remotely because of lockdown measures.
Small-medium enterprises (SMEs) were among those badly affected by these measures especially as many either still lack the resources or knowledge to go digital.
According to the white paper, “Accelerating Malaysian Digital SMEs: Escaping the Computerisation Trap” by Huawei and SME Corp., only about 44% of SMEs in Malaysia are involved in e-commerce activities, while only 35% have deployed an IoT solution, albeit limited to building security and surveillance and fleet tracking solutions – not solutions that could be sold as a service to the market.
As our nation’s SMEs are only just starting to find their feet after months of slow activity, it’s clear and crucial that we continue to support our local businesses, with hopes it could help revitalise the economy – SMEs contributed 38.3% to the overall country GDP in 2018 and make up 98.5% of businesses in Malaysia.
Additionally, by supporting SMEs, we hope this will also open up more job opportunities in the market (SMEs contributed 66.0% of the total employment in Malaysia).
With Malaysia Day around the corner, we decided to spotlight seven of the most wholesome homegrown micro, small and medium businesses whose products are as interesting as their back stories, come with great Malaysia Day deals and promos, and are also giving back to the community in one way or another.
According to the latest figures from the Department of Statistics, Malaysia (DOSM), there were altogether 907,065 SMEs operating in Malaysia in 2015, which represent 98.5% of the total establishments of 920,624 firms. (Image source: Huawei)
Contents
1. Kravve (Food)
The inspiration behind Kravve came from Founder and CEO Yong Li’s own challenging experience while growing up. To him, it’s more than just a homemade food platform.
Their site is split between 41 categories to help customers really filter through what they’re looking for. There’s even several categories just for the spice level. (Image source: Kravve)
Kravve was also born out of a very specific problem – the founder’s mother who wanted to help make extra cash for the family but lacked marketing knowledge, nor did she know how to navigate her way through social media. On top of that, she had no idea how to handle customer service.
“I come from a very ordinary family with my dad as the sole breadwinner, and my mom as a full-time housewife,” he said on their website. “Money has always been something that we have to fight month over month since I was young. Like most people, it was not an easy task for my parents to raise my brother and I. Particularly putting me through a good university, simply because they believe that education is the way for a better future.”
Motivated by this challenge,Yong Li started Kravve. “That made me think – what if my mom can now make an income by just making a tiny bit more of what she is already making for the family? Her friends and relatives loved it (the jam),” he said.
“What if selling food isn’t that hard and she can deliver her homemade pumpkin jam across Malaysia so more people can get to know her, and so that she can make some extra income or even a small business from home? This is why I started Kravve,” he added.
Today, home chefs across the country can sell anything from cooking paste, jams, bread, sausage, burger patty, traditional health remedy and more, on their platform, which feels like an e-commerce platform specially made for homemade bites.
Sellers will find this platform useful as it allows them to upload perishable food, unlike conventional e-commerce platforms. Additionally, sellers can purchase ingredients on the Kravve platform around a wholesale price, allowing pre-cooking logistics to be covered.
On their website, Kravve says, it hopes to provide a one-stop solution for those who are looking to establish a quality lifestyle through quality handmade food, while also empowering home-chefs like single mothers and retirees to make some extra income. This on top of making natural and wholesome handmade food accessible for everyone.
Products on Kravve are all handmade, made with high-quality ingredients, without preservatives and additives.
What’s cool:
They currently have a 31% cashback promotion for customers who purchase products through GrabPay.
If you’re curious about their deals, find them online here.
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2. MUNI (Fashion and clothing)
Celebrating sustainable and ethical fashion, apparel brand MUNI specialises in bohemian style that also takes inspiration from Southeast Asia’s indigenous cultures.
They source their natural dyes from tropical plants in its Bumi Factory in Sepang, Malaysia. The raw colors are made from leaves, fruit skins and tree barks through a process that honours traditional methods of hand dyeing, creating hues that soften to a unique patina.
The fabric is scoured to ensure it’s clean before being dyed. On top of that, only soapnut berries are used to clean fabrics. (Image source: the Malay Mail)
Growing up in an artistically and culturally diverse household, founder Muni Osman, according to their online bio, had a particular admiration for eccentric handicrafts, and often collected from his father’s many exotic travels – which would later influence a bulk of his design style as a designer.
“I want to show natural dye can be for current fashion even though the techniques are traditional. The style can be modern for young people,” he told the Malay Mail.
His adoption of Japanese sensibility in his art came from an unexpected friendship with a Japanese traveller years earlier.
His first encounter with natural dyed fabrics came during an architectural project in Bali, at Sharma Springs, a bamboo villa. Drawn to the fabric’s raw beauty, Muni later went on a exploration journey to unravel the mystery of natural dyeing.
MUNI’s merdeka promo collection was inspired by the Malaysian flag colours. (Image source: MUNI)
Inspired by the natural dye’s positive impact from an environmental standpoint, Muni would then go on to start tropical dye apparel brand, MUNI.
We believe their sustainable brand is a great way to combat throwaway culture that usually leads to excess and unwanted clothing, which eventually leads to waste.
Their products range from tees to pouches to bags and scarves, among a host of other items.
What’s cool:
From 30 August until 16 September, MUNI is honouring the country with pieces inspired by the colors of the Malaysian flag. They are giving a 20% discount on all orders from the Merdeka Colors 2020 Collection.
If you’re curious about their deals, find them online here.
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3. Kedai Bikin (Home and Living)
Designed by Studio Bikin, Kedai Bikin is their Malaysian-crafted furniture and home accessories line that works directly with artisans in order to ensure they benefit from the commissions. They do this to get the best out of the working relationship between the designer and the maker.
Kedai Bikin offers a curated range of home and living products based on intelligent, responsible and sensitive designs to meet the users modern lifestyle needs.
“At Kedai Bikin, we’re inspired by our own traditions and cultural offerings with the added ability to revitalise and refine the technicalities of local design and craft,” Adela and Farah, who were also the initial designers for the first furniture series, told Malaysian Tatler. (Image source: Kedai Bikin)
Their products range from loose furniture to home accessories, and remakes of the 50s and 60s popular classic Malaysian furniture with a contemporary twist.
After two years of developing and perfecting the designs, their brand now holds a few collections under the BIKIN Furniture series, which include the Designer Family, the String Family, the Rattan Family and the Bikin Tropicalia collection. In 2016, founders, Farah Azizan and Adela Askandar, launched the BIKIN Home & Living which fall under the umbrella of Kedai Bikin.
Studio Bikin is a multidisciplinary design studio. Their focus includes spatial planning, architectural design, interior design, landscape, furniture & product design, place branding and styling. (Image source: Kedai Bikin)
Besides featuring work from other designers across ASEAN, their goal is to create a platform that emphasises fair trade, alongside nurturing others ideals to produce individual, well-designed and reasonably-priced furniture that doesn’t compromise its artisanal qualities.
Named the Merdeka Chair, this retro chair, according to the creators, suits both asian adults and children, due to its low seat height and snug frame. (Image source: Kedai Bikin)
Their aesthetics can be described as Malaysian contemporary mixing elements like rattan, rubber, and powder steel, using items that are carefully sourced from local and regional designers, artisans and craftsmen. Kedai Bikin received the Innovative Craft Awards (ASEAN Selections) by The Support Arts and Crafts International Centre of Thailand (SACCIT) 2015.
Their products include seats like chairs, stools and benches, as well as tables like coffee and dining tables, among other things. One of their signature products are retro round chairs with colourful weaves of rubber strings.
What’s cool:
As part of their Malaysia Day sale from 1 September to 20 September, all string chairs are discounted at 25% off.
For a full list of discounted items, check out their website.
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4. Athena Empowers (Bath and Body)
Specialising in feminine hygiene products and services, social enterprise Athena aims to reduce menstrual poverty issues and educate eco-friendly and safe menstrual hygiene practices among women of different social groups, alongside contributing towards socio-economic development, through their reusable and eco-friendly menstrual pads made from high quality absorbent fabrics.
Athena aims to particularly empower girls from within through programs that promote life skills and better access to education. Their social mission: to liberate young women for a better future and reduce landfills burden from the disposables.
“It’s time to increase awareness about the fundamental role that good menstrual hygiene management plays in enabling women and girls to reach their full potential,” they say on their website.
Among the efforts that they focus on in order to promote a healthier lifestyle include attention to a disposal system, the impact of material selection, cultural challenges related to discreetly washing and drying cloth material, and waste management.
The story of how Athena was founded is as awe-inspiring as their mission.
Athena’s pads are five times more absorbent than disposable cotton pads and can be easily washed and reused. Every sale helps Athena Empowers fund outreach programmes for young women in Malaysia experiencing period poverty. (Image source: Yahoo Malaysia)
Founded by Anja Juliah Abu Bakar, who also happens to be the CEO, she was inspired to start the business after she discovered from a missionary in rural Sabah that many young girls from the rural areas miss out on at least five days of studies a month, or drop out entirely, due to fears of not being able to catch up, and even more shockingly, because of menses. Since then, Anja has been championing to keep them in school.
She has mentored more than ten enterprises — with more than half receiving accreditation as Impact Driven Enterprises from the government of Malaysia — since 2016. Her work extends beyond Malaysia too — she has provided consulting services and given many talks on social entrepreneurship in Vietnam, the UK and Sweden.
Athena also offers corporate and individual consultancy services to new peers who are keen to embark in the social enterprise journey.
Their outlets can be found in Kuala Lumpur and Selangor.
What’s cool:
As part of their Merdeka Sales, everything on their online shop is 30% off, excluding postage.
See all their cool discounted items on their website.
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5. Bobble (Bath and Body)
Another brand that focuses on female hygiene products, BOBBLE uses 100% Der Global Organic Textile Standard (GOTS) certified organic cotton that is free from toxins, chlorine, perfumes and dyes and are marketed as breathable, comfortable, ultra-thin yet absorbent.
BOBBLE is a great way to overcome the issue of waste accumulation in Malaysia – a total of 2.4 billion period products are disposed each year in Malaysia. (Image source: BOBBLE)
Positioning itself as a sustainable brand, all materials are biodegradable from their packaging, which is made from FSC certified paper and soy-based ink, to the actual products, with hopes the items can be disposed of with peace of mind.
As women use more than 11,000 sanitary pads or tampons in their lifetime, BOBBLE aims to empower women to make healthier choices for their menstrual health, especially as most femine hygiene products contain toxic ingredients.
Founded by Malisse Tan, who was diagnosed with Stage 2 Hodgkin’s Lymphoma cancer when her daughter Aleya was just 4 weeks old in 2017. After completing chemotherapy, Malisse, as stated on their website, became more conscious of the products she was using, and set out to understand what they were made of.
The problem she discovered: she realised that she either didn’t understand the ingredients listed on the packaging of female hygiene products, and couldn’t find the ingredients listed, despite how sensitive that area of the body was. This realisation set the stage for what would be known as BOBBLE.
According to BOBBLE, using organic cotton-based period products is safer to use on/within skin and reduces the risk of rashes, allergies, bacteria growth & Toxic Shock Syndrome (TSS).
The brand’s values also align closely with the United Nation’s 17 Sustainable Development Goals, of health and well-being, quality education, gender equality and access to sanitation.
Using organic cotton based period products is safer to use on/within your skin and reduces the risk of rashes, allergies, bacteria growth & Toxic Shock Syndrome (TSS)
What’s cool:
As part of their Malaysia Day Sale, they are offering 20% off storewide until midnight 16 September.
For a full list of discounted items, check out their website.
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6. Cactus O Lala (Plants)
A plant shop that sells both succulents and other house plants, Tri, the founder, said the business was initially just her exploring mini gardening as a possible hobby, and a way of coping with the stress and anxiety in her life.
Little did she know that her hobby would slowly grow into her passion – and eventually an insta business.
The mini Insta shop is based in Shah Alam, Selangor (Image source: Cactus O Lala)
For Tri, her mini gardening experience not only helped her stay focused and beat the occasional blues, but it also created a sense of purpose that grounded her.
But what spurred the birth of her business was also the frustration she felt after she found it difficult to find online sellers, who sold succulents on Instagram – at that point in time.
“There were a handful of them (sellers), but they were either inactive or didn’t get back on my enquiries,” she said.
Inspired to fill in that gap, she started selling succulents and house plants on Instagram.
At the same time, she said, her motivation to continue to grow the business stemmed from her desire to share the joy of growing mini plants as an alternative coping mechanism for those who struggle with stress, getting burned-out, anxiety, depression etc., as well as for fellow succulent enthusiasts who just want to get their hands on some greens.
“I started looking for suppliers online and going from one nursery to another just to get the best deal for limited bulk purchases because I was just starting out,” she said. Interestingly, the business kicked off on her birthday month: November 2017.
“We did a promo when we first launched and it was well received – we got huge orders from East Malaysia,” she added. “Now we are specialising in cactus and succulent door gifts as well – we offer wedding favours that would benefit guests, and even if they decide to just chuck it (the products) in the corner of their house it would still be worth it because succulents help purify the air.”
Her succulent door gifts range from budget-friendly to more expensive offerings, depending on the client’s budget. She said, however, they aim to keep it affordable for every bride.
The doorgits can either be wrapped in burlap (left) or in a plastic box (right), doily paper, glass container, among other items. (Image source: Cactus O Lala)
She hopes to expand her micro-business into brick and mortar in the near future, and create an official website where she’ll market her products and produce plant-related content at some point. But with that said, if you’re tempted to take a look at her products, do visit her Insta shop.
“It’s not set in stone yet – but there are also plans to eventually expand the shop into a form of green escape,” she said. “And it will offer easy-to-care houseplants and home deco concepts to our clients.”
What we found alluring about her insta shop is the fact that Cactus O Lala donates some portion of her proceeds to Aman Palestin to help aid the Palestinians.
What’s cool:
As part of their Malaysia Day Promo, plants will be delivered straight to the consumers’ doors and 10% from each purchase will be channeled to Aman Palestin to help aid the Palestinians.
For a full list of discounted items, check out their insta shop below.
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7. The Batik Boutique (Fashion)
This award-winning social enterprise was created with the aim of breaking the cycle of poverty by training women from low-income backgrounds to product gifts and fashion accessories made from a batik, a traditional Malaysian fabric.
They work with artisan families in rural Malaysia to create batik textiles on natural fibres, made through a labor-intensive process that uses wax and dye.
From there the women create ethical fashion and gift items with the fabric in Batik Boutique’s swing training center.
For the women: In 2015, founder Amy Blair (center) established a sewing center in the community where The Batik Boutique’s artisans lived, in order to make working more convenient and eliminate the need for transport and childcare.
Today, according to them, more than 150 artisans work with their social enterprise to gain a fair, sustainable income and marketable skills, with each purchase directly benefiting the artisan who made it.
The Batik Boutique won the MaGIC Amplify Award for Social Enterprises.
The business, which was founded in 2009, began with a friendship between two women – Amy Blair, the founder and Ana, a single mother, who at the time was looking for more income to support her family.
They would later go on to brainstorm ways to earn an income. And the rest, as they say, is history. Amy founded Batik Boutique with the belief that women like Ana deserved a fair and sustainable income, and the ability to provide for themselves and their families.
Their physical store is located in Desa Sri Hartamas.
What’s cool:
As part of their Malaysia Day Sale, The Batik Boutique is offering a 20% discount when you buy 3 pieces from their cherished KL Collection. This can be made both in-store and online. They are also offering free shipping within Malaysia with above RM200 purchase and free shipping Internationally with minimum $100 purchase.
For a full list of discounted items, check out their website here.
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Support local SMEs this Malaysia Day
So that’s our round-up of some of the best wholesome SMEs who are giving back to the community in one way or another. Oh, and they have awesome Merdeka or Malaysia Day promos that you should check out, too.
While you’re scrolling through all these SMEs and spending on their eye-catching promos, we recommend using an e-wallet or a credit card to collect points or receive cashback as it’s one of the best ways to stretch your Ringgit. If you’re curious about what credit card to use, you can try to find the one that suits you best here.
While the pandemic has severely affected our local businesses and SMEs, we can still find ways to continue to support them, and in a way, help revitalise our economy.
As for our SMEs, we’ve noticed that most have adapted to the situation by ramping up their digital presence or by adjusting their business strategies and plans. We wish them the best of luck.
We hope you found this article insightful. Happy Malaysia Day from CompareHero.my!
Read also: [#CHMalaysiaku] Pre-Merdeka Vs 2020: 8 Different Ways Malaysians Manage Their Money
Read More
#InvestInsights: Should You Invest Via Robo Advisors In Today’s COVID-19 World?
- By CompareHero.my
- September 11, 2020
What exactly is a robo-advisor and how can you benefit from it? Is investing via a robo-advisor really wise especially during this pandemic? In this article, you will learn what robo-advisors are, how they actually work, the list of robo-advisor platforms available in Malaysia, as well as the pros and cons of investing via robo advisors. Read more to find out!
There’s really no way of escaping robots – we see it in complex tasks like precision agriculture with drones to more mundane daily tasks like Alexa or Roomba. In fact, society has progressed so much to the point where robots can even help you with your finances.
So it wouldn’t be surprising if an image of robots rummaging through your finances was the first thing that sprang to mind when thinking of robo-advisors.
But robo advisors are not really robots.
Instead, robo-advisors are software products powered by algorithms that allow one’s portfolio management to be automated.
A by-product of the rise of Artificial Intelligence and automation, robo advisors are a relatively new concept in Malaysia – they first landed on local soil in November 2018, in contrast to more established robo-advisors like Betterment and Wealthfront in the United States, that have been taking the market by storm since the latter’s launch in 2008.
The first ever robo-advisor, Betterment, has managed a total of RM92 billion in assets under management (AUM), while Wealthfront is not too far behind with RM83.3 billion in AUM.
So it’s clear that a lot of people are utilising these platforms globally.
Surprisingly, though the technology behind robo-advisors sound revolutionary, they are not exactly that new as human wealth managers have been using automated portfolio allocation software – and were the only ones who could buy the technology – since the early 2000s. It wasn’t until 2008 that the software became more accessible to the masses.
We spoke to leaders from three robo-advisors (StashAway, MYTHEO and Wahed Invest) in Malaysia to understand how robo-advisors work, and get a better grasp of their platforms and the general landscape in Malaysia.
Contents
- Understanding robo-advisors – what are they?
- How is it possible for robo-advisors to recommend certain portfolios over others?
- Robo-advisor landscape in Malaysia and its potential
- So how do robo-advisors work?
- List of robo-advisors in Malaysia
- The case for robo-advisors – why invest in robo-advisors?
- Drawbacks of robo-advisors
- If you want a fully personalised experience, financial investors offer more specific investment options
- Are robo-advisors a safe and secure platform?
- So should you invest via robo advisors in today’s COVID-19 world?
Understanding robo-advisors – what are they?
Robo-advisors, according to Investopedia, are digital platforms that provide automated, algorithm-driven financial planning services with little to almost no human supervision.
In other words, you get to manage your investments digitally without the need to consult a financial advisor because, in a way, they are the digital equivalents of traditional advisors.
The key difference between robo-advisors and traditional financial advisors is that they utilise data and technology to deliver automated and personalised portfolio management.
“I would say we’d prefer to be referred to as a digital wealth manager, but we do use technology to deliver automated, personalised portfolio management for each client’s individual portfolios,” Wai Wen Wong, Country Manager of StashAway told CompareHero.my.
Other accompanying services like asset rebalancing or reporting monthly statements are also delivered digitally through the app, Mohd Izzat Fadhli, Executive Director of Wahed Malaysia, told CompareHero.my.
“Usually back in the olden days, you would have a person as a financial advisor and that person would understand your needs and risk tolerance, and would then recommend a certain type of investment for you to invest in,” Mohd Izzat said. “Now take everything out of that equation and think of it being done digitally.”
How is it possible for robo-advisors to recommend certain portfolios over others?
Most robo-advisors would recommend portfolios using passive indexing strategies optimised with some variant of the modern portfolio theory (MPT), a mathematical framework of assembling a portfolio. This method allows risk-averse investors to maximise returns based on a given level of market risk.
The methodology of most robo-advisors follows an index fund or takes a passive investment approach, because research tells us that it’s difficult for actively managed funds to beat market indexes anyway. The goal of passive investing isn’t to beat the market but to replicate a specific benchmark or index in order to match its performance.
For instance, StashAway uses the proprietary investment strategy, ERAA® (Economic Regime-based Asset Allocation), an enhanced version of MPT, Wai Ken said, as it also addresses external economic forces, which ultimately drive asset class’ returns, volatility, and correlations.
When combined, Wai Ken said, ERAA®’s three pillars: Economic Regimes Determine Asset Allocation, Risk Shield, and Valuation Gaps, can deliver a macroeconomic portfolio management strategy that minimises risk and maximises returns for personalised portfolios across any economic environment.
Wahed Invest uses MPT and optimises the investor’s portfolio with Shariah-compliant investments while MYTHEO uses a proprietary algorithm to analyse the investment needs of each customer.
Most robo-advisors stay away from engaging in securities selection, and refrain from using actively-managed funds as several long-term studies conclude that asset allocation is responsible for between 80% and 96% of a portfolio’s return profile.
The opposite of passive management is active management which involves frequent buying and selling of stocks in an effort to outperform a specific benchmark or index – these portfolios tend to target superior returns but take greater risks and incur larger fees.
“The way traditional investment managers work – and even current – is by offering active funds to investors, and they then try to beat a certain benchmark. Active management means the fund managers would always try to pick the best stocks,” Mohd Izzat said.
“But safe investment simply means you’re growing your wealth according to the market and not trying to beat it because – beating the market isn’t easy. Studies have shown that only 20% of active managers beat the benchmark, and they are not consistent about it. So what this is telling you is that it’s probably better to invest alongside the benchmark,” he added.
The latest SPIVA U.S. Scorecard shows that 70% of domestic equity funds lagged the S&P Composite 1500® over the one-year period, the fourth-worst performance since 2001, this clearly shows us that active management is difficult because it’s hard to beat the market.
Robo-advisor landscape in Malaysia and its potential
What sparked the birth of robo-advisors in 2008 was the global financial crisis, and the plunging of the stock market – this prompted investors to consider passive investment vehicles, and it was the bull run of 2009 that led to the birth of the first ever robo-advisor, Betterment, a year later.
Today, there are around 200 robo-advisors in the established and mature United States market – compare that to the burgeoning market in Malaysia, there are only a handful of licensed robo-advisors.
“We definitely have seen many Malaysians become more aware of robo advisors. In most APAC countries, people with less than US$1 million have no cost-effective solution to invest intelligently,” Wai Ken said. “One of the outcomes of this situation is that Asian households have unbalanced portfolios with too much cash.” Robo-advisors like StashAway, he said, solves these issues and makes it simple and cost-effective to invest intelligently.
“With a direct B2C approach, we empower our customers to reach their financial goals sooner by making investing more accessible and enjoyable,” he added.
The robo-advisor market is expected to grow even further – a report by Infosys predicts that assets managed by robo-advisors are projected to increase to US$16 trillion by 2025 from US$0.3 trillion in 2016.
In terms of the Malaysian market, Wai Ken said they do foresee more players entering the market, especially as more Malaysians start becoming more accustomed to the various offerings. “We will continue to focus on improving our clients’ experience with us. It is natural that the industry will consolidate in the coming years and we think we are well placed to lead the push for the industry to evolve,” he said.
The growth of robo-advisors in Malaysia, Mohd Izzat of Wahed Invest said, is also expected to grow in tandem with the shift towards digital alternatives.
“This shift (to digital) is not just happening on the investment side. Bank Negara, for instance, released a framework for digital banks, so you’ll see a convergence in financial institutions, a hybrid between digital and traditional, especially in terms of onboarding and getting clients, it will shift more towards digital,” he said.
But more importantly, the growth of robo-advisors in Malaysia is part of the country’s overarching aim to promote financial inclusivity among its citizens, and to allow investing to be more accessible to the masses through digitisation, particularly to those who can’t afford traditional investors because of the high fees, Ronnie Tan Tai Ngee, CEO and Managing Director of MYTHEO told CompareHero.my.
“According to research, 1 in 3 Malaysians are low in financial knowledge, and there are about eight million millennials in Malaysia – a lot of them who don’t understand investment yet,” Tan said.
“Only the fortunate and rich can afford a wealth manager to guide them – but how many people can afford such services? And how many financial advisors can actually reach out to all Malaysians to ensure financial inclusiveness? That’s where robo-advisors come into the picture. And the credit goes to the authorities and the Securities Commission (SC) for having this far-sighted vision.”
One way to achieve financial inclusion, Tan said, is to make investing more affordable and to be convenient for people – exactly what robo-advisors aim to do.
So how do robo-advisors work?
Well first, you’ll need to download the mobile application either through Google Play or the Apple Store.
Upon entering the app, the user will be asked a series of questions about their resources and financial goals, then the robo advisor will decide how to invest the client’s money.
To better understand you as an investor, these questions will usually touch on subjects like investment timeline, risk tolerance, and savings. Then the answers are run through an algorithm-based AI to determine the asset allocation and build a portfolio of diversified investments that are most aligned with the investor’s goals. Different platforms would have different methodologies but most are based on MPT.
The software can also automatically rebalance a portfolio to ensure that it remains close to the target allocation, regardless of asset performance or if the investor makes tweaks to his or her portfolio.
Regular contributions in the form of small weekly or monthly deposits are encouraged to make sure the contributions can maintain their target allocation and keep the investor on track to achieve their goals. The portfolio would also be monitored to ensure that the optimal asset class weightings are maintained.
Unlike traditional advisors, robo-advisors depend on the algorithms to create, diversify and rebalance an investor’s portfolio. The asset allocation will heavily depend on the type of robo-advisor you’re using but most would typically include exchange-traded funds (ETFs), cash and gold.
“ETFs are good instruments (for passive investing) because they are well-diversified – similar to mutual funds except they are listed on the stock exchange and the liquidity is there so you can get in and out,” Tan of MYTHEO said. “So you’re investing in a pool of stocks rather than an individual stock.”
About 6,000 ETFs are currently listed on stock exchanges all over the world and they are widely used by institutional and individual investors, with most ETFs being linked with indexes such as stock price indices and many ETFs correspond to specific asset classes, according to a whitepaper by MYTHEO.
These features of ETFs make it possible for investors to invest in a diversified range of assets such as stocks, bonds, REITs (real estate investment trusts) and commodities (goods) at low cost.
“We build our customers’ portfolios with a carefully selected assortment of highly diversified, liquid and low-cost ETFs,” Wai Ken said. “These index-tracking investment tools enable our customers to gain diversified, long-term exposure to a variety of asset classes and geographies.”
Read also: #InvestInsights: Should You Start Investing During A Recession? An Expert Weighs In
List of robo-advisors in Malaysia
1. StashAway
Founded in and based in Singapore, it is the first digital investment advisory platform (or commonly known as robo-advisor) that got a license from the SC in November 2018 to operate in Malaysia. Unlike other platforms, there are no minimum deposits to start investing with StashAway.
Other key features include generated annualised returns ranging from 11.6% for its highest risk portfolio and 4.3% for its lowest risk portfolio since it launched in July 2017, according to Wai Ken.
He also pointed out that all core growth-oriented portfolios have outperformed their respective same-risk benchmarks.
They are backed by Eight Roads, the global investment arm of Fidelity, as well as Square Peg, one of the largest venture capital funds in Australia, in a recent funding round.
Their products include their flagship global portfolios, income, StashAway Simple (cash management product), and a 50% Shariah version of their global portfolio.
Image source: StashAway
Image source: Keflah
We tried it out using a 10% risk portfolio, considered relatively conservative, and the assets we were recommended included ETFs from the United States, international ETFs, bonds, commodities (gold) and cash.
- iShares Core S&P Small Cap ETF
- Health Care Select Sector SPDR Fund
- KraneShares CSI China Internet ETF
- Vanguard Total International Bond ETF
- iShares J.P Morgan USD Emerging Markets Bond ETF
- iShares International Treasury Bond ETF
- iShares TIPS Bond ETF
- iShares Floating Rate Bond ETF
- Gold
- Cash
| Minimum Investment | No minimum | |
| Fee structure | First RM50,000 | 0.80% |
| RM50,000 to RM100,000 | 0.70% | |
| RM100,000 to RM250,000 | 0.60% | |
| RM250,000 to RM500,000 | 0.50% | |
| Next RM500,000 to RM1,000,000 | 0.40% | |
| RM1,000,000 to RM3,000,000 | 0.30% | |
| Above RM3,000,000 | 0.20% | |
2. Wahed Invest
Image source: Propfessor
Founded by American Junaid Wahedna, it was the world’s first automated Islamic investment platform (robo-advisor) when it launched in 2017.
It then launched its first ETF, the Wahed FTSE USA Shariah ETF (HLAL US), in 2019. Listed on Nasdaq, the fund provides exposure to U.S. large and mid-cap firms that comply with Shariah principles. Some of the notable stocks in this ETF include Apple, Johnson & Johnson, Procter & Gamble and Adobe Inc.
Unlike StashAway, the assets in Wahed are more limited – right now investors can only get exposure to Malaysian stocks via the MyETF MSCI Malaysia Islamic Dividend, U.S. stocks via Wahed FTSE USA Shariah ETF, cash and gold.
A fully-shariah compliant platform, it is suitable for Muslim practioneers and those who would prefer to engage in ethical investing.
| Minimum Investment | RM100 | |
| Fee structure | RM100 to RM499,999 | 0.79% |
| RM500,000 onwards | 0.39% | |
3. MYTHEO
Image source: MYTHEO
MYTHEO is operated by GAX MD Sdn Bhd, a joint venture between Silverlake Digital INX Sdn Bhd and Japanese fintech player Money Design Co Ltd.
The name is a portmanteau of Malaysia and Theo, the younger brother and confidant of Dutch painter Vincent van Gogh.
The first Malaysian company, they are the second platform to be approved by the SC.
Their algorithm customises an investor’s portfolio by combining weight from three functional sub-portfolios, which are Long-Term Growth, Income and Inflation Hedge portfolio.
Then, each functional portfolio is constructed using another set of algorithms consisting of over 25 ETFs covering different asset classes across multiple global regions.
It’s through this two-stage portfolio construction method that the platform is able to help investors indirectly own a portion of more than 10,000 securities. This method, MYTHEO states, allows it to be well-distributed in the event of a market downfall as it will have little impact on the overall portfolio.
| Minimum Investment | RM100 | |
| Fee structure | First RM30,000 | 1% |
| RM30,000 to RM100,000 | 0.9% | |
| RM100,000 to RM300,000 | 0.8% | |
| RM300,000 to RM500,000 | 0.7% | |
| RM500,000 to RM1,000,000 | 0.6% | |
| Above RM1,000,000 | 0.5% | |
4. Raiz
Image source: Raiz
If you want to invest your small amounts of money or changes, you can consider using micro-investing platform Raiz.
Just recently launched in July 2020, it allows users to automatically invest their loose change from everyday purchases in ASNB’s variable price funds (unit trust).
It’s an incredibly efficient way of making the most of every cent being spent, so rather than waste your cents away, why not stretch your Ringgit and have it saved and invested instead?
But Raiz also allows users to invest via lump-sum investments and recurring investments.
The app is a joint venture between PNB’s subsidiary Jewel Digital Ventures and Raiz Invest Australia. It is initially only available for Maybank account holders.
Raiz optimises six diversified portfolios and implements the MPT – the same methodology used by most other robo advisors.
| Minimum Investment | No minimum but you need RM5 to start | |
| Fee structure | First RM6,000 | RM1.50 |
| RM6001 onwards | 0.30% | |
The case for robo-advisors – why invest in robo-advisors?
With so many other alternative instruments to choose from, you may be wondering why would it be an attractive option to invest in robo-advisors instead? We break it down below.
1. High quality research (Nobel Prize-winning investment models)
Research tells us that a portfolio made up of low-cost index funds gives investors an 80% to 90% chance of outperforming anything else.
And robo-advisors heed, and internalise, this fact – most robo-advisors in Malaysia create portfolios using low-cost, index-based ETFs.
On top of that, many of the robo-advisors’ algorithms rely on the Nobel Prize-winning investment theory, MPT, of creating an investment portfolio with the greatest return for the smallest risk, to drive their models.
In return, you’re getting an investment portfolio that relies on substantial and proven research.
Unfortunately, the thing about investing is that returns are not guaranteed, but at least it’s a good place to start.
2. More exposure to other markets
Due to how it’s created, robo-advisors generally give investors more exposure to various markets, from the United States to Asian markets. Investors also get their money invested into gold and cash.
“What robo-advisors give investors are more diversified portfolios. Compared to stand alone investments, robo-advisors give you a mix of asset classes,” Mohd Izzat of Wahed Invest said.
“It gives you enough diversification for your risk tolerance so that you get a certain return or expectation of return. You could also get more exposure if you, let’s say, invest in robo, and also invest in another asset class that has overlapped with your portfolio, like for example another gold app.”
3. Low fees
Robo-advisors generally charge significantly lower annual management fees than traditional advisors do.
Traditional investors are usually associated with high fee structures of 1.25% and 3% annually, costing a range of RM1,000 to RM20,000 a year depending on asset size. In contrast, robo-advisors are way cheaper with an annual management fee that costs less than 1%.
You can also invest for a minimum of only RM100 — a stark contrast to many traditional mutual funds which require a minimum portfolio value ranging from RM500 to RM10,000.
Refer to the tables in the above section for a more detailed fee breakdown.
Minimum investment
But why does having lower fees matter to investors? Well, the compounding effect of said fees, especially higher fees, would eat into your returns over time, and eventually you’ll accumulate less money in your portfolio.
Conversely, the lower your fees, the more you’ll earn overall.
StashAway argues that robo-advisors’ smaller fee structures give investors overall higher returns on the long run. (Image source: StashAway)
4. Democratises investing
Due to its low fees and accessibility (just via a mobile app), robo-advisors make it easier for younger investors or those with lower net worth to participate in investing especially if they may not have considered, or be able to consider, professional financial advice.
For instance, Malaysians who want to invest their small amounts of money or changes can consider using micro-investing platform Raiz, which allows users to automatically invest their loose change from everyday purchases in unit trusts via its app.
Robo advisors are seen as better alternatives compared to a regular savings account or even fixed deposits because of their higher projected returns.
5. Intuitive and straightforward
Its hassle-free approach makes signing up and setting up accounts with robo-advisors an easy and secure process.
With just a swipe of your finger, you can easily sign up, track your assets’ performance, and withdraw money.
In contrast to traditional mutual or unit trust funds where you will need to wait for your monthly statements to track your asset’s performance. It also requires you to go through your fund manager for withdrawals or portfolio adjustments.
6. Hands-off and low-maintenance
If you’re always busy and rarely have the time to check your investments, it would be good to know that your money is kept in safe hands.
The “set it, and forget it” approach, according to StashAway, used by robo-advisors is meant to make them quick, simple, and comprehensive.
You won’t have to update your financial advisor for any portfolio adjustments as trades happen automatically on your behalf, and you’re still able to check the status of your portfolio by just connecting to the app. Understandably, some investors, however, prefer being more involved in the decision-making process with advisors.
Ultimately, robo-advisors take out the human emotion when determining financial plans and managing portfolios, which has been said to benefit investors as it avoids misreading the market.
Drawbacks of robo-advisors
The relative nascency of robo-advisors and its capabilities, and the minimal involvement of humans have led to some critics saying robo-advisors lack empathy and sophistication.
And of course, the biggest loss with a robo-advisor is the human element, a criteria that gives traditional financial advisors its irreplaceable features. Because beyond just managing your finances, often, advisors do more than that – they also educate and are coaches to their clients.
Relationship-building makes up the core element of a financial advisor’s business and is something that clients look for, too, especially those who prefer more human interaction and involvement in decision-making.
For all the fees that robo-advisors save and the seamless user-experience that it gives, it will never be able to take you out for lunch or to go over some financial concerns or unusual financial circumstances that you have like complex tax situations. It’s that personal touch that gives financial advisors their defining feature.
Besides that, the algorithms – and in essence, its recommendations – in robo-advisors are limited to what information you give them. And such info is usually limited to age, financial goals, and risk level. Algorithms also work best with black and white data, which doesn’t always work with humans whose lives are more nuanced than that. For instance, an algorithm wouldn’t be able to evaluate or provide advice when investors face real subjective, difficult and emotional scenarios in life.
In other cases, many clients find great value in having a professional sounding board to guide them through their money and assets. Financial advisors can help manage assets beyond what’s offered in the app such as properties and other illiquid assets, activities that are often difficult to standardise and automate, according to research we found on robo-advisors, which makes it difficult for robo-advisors to offer them in their app.
Though a robo-advisor is able to assess one’s financial situation, financial knowledge, and financial goals, they are not able to assess more complex situations. This is where having a financial advisor may come in handy as they would be able to assess your financial situation and figure out what’s the best approach to take.
In response to the critique of not being personalised enough, Wai Ken of StashAway argued that the technology within robo-advisors makes it more personalised.
“We disagree with that. In fact, we’d argue that we’re able to provide even more personalised and tailored portfolios by leveraging technology to deliver this to everyone. We ask questions about your risk appetite, financial goals, current financial situation and do a financial knowledge assessment before recommending a portfolio to you,” he said.
The goal of robo-advisors, Mohd Izzat of Wahed Invest said, is to recommend the best portfolio possible for investors from all the available funds in the market. “At the end of the day, we just want to give investors the best risk-adjusted return portfolio. Let’s say in the future, something happens to one of the funds, we can always change it. It’s not a big deal for us because it’s about giving customers the best exposure.”
Additionally, he said, scalability and technology would be the current challenge for robo-advisors if they were to make portfolios even more personalised, to the cents.
“I think at this point, since we are a super nascent industry, it’s not super personalised, but it can get there,” he said. “But at the end of the day, it’s still personalised to you, and your risk, because you choose it to be so. Also what does personalisation really mean to investors – does it mean tweaking the percentage or is it having more say on the type of assets?”
Read also: #InvestInsights: What Should You Invest In During A Recession? An Expert Weighs In
If you want a fully personalised experience, financial investors offer more specific investment options
The big difference between traditional financial advisors and robo-advisors is that the former provides investors with the flexibility to choose which securities and allocations that they prefer – a stark contrast to robo-advisors that usually have a predetermined investment strategy with pre-selected securities, depending on the investor’s financial goals and risks.
This means using robo-advisors won’t allow you the freedom to choose how much money you want in a particular stock, for instance. Which is what, many robo platforms argue, is the basis of robo-advisors – recommending portfolios that work best for clients.
Additionally, you won’t be able to choose your personal security or stock preferences. The reason behind this is because robo-advisors are meant to expose investors to an optimal portfolio with minimal work.
The flipside is you would be able to select securities with a financial investor. Additionally, any opinion or queries related to asset allocation or securities, could be addressed by a traditional financial advisor.
There’s no harm in trying both at the same time to get a fully-optimised experience.
Are robo-advisors a safe and secure platform?
Question marks over the security of robo-advisors were brought to the forefront particularly after the auto-debit incident by StashAway recently. So are they safe?
The short answer is yes.
“As part of the SC requirements, we need to always have a significant capital base; it is therefore unlikely that StashAway will start bankruptcy procedures. We’ve published a detailed tech post-mortem explaining the root cause of this and how we intend to prevent this situation from happening again,” said Wai Ken of StashAway on the recent incident.
“In the unlikely event that StashAway is declared bankrupt, following SC strict regulations, StashAway has ensured that customers’ funds are protected by Citibank Trust Account for when we first receive your deposits and a Custodian Account via Saxo Capital Markets for your securities, such that those funds are kept separate and un-mingled with StashAway’s finances,” he added.
All robo-advisors we researched on are licensed by the SC requirements, and it’s only good practice to invest via platforms that have received full approval from the SC.
All platforms we researched are also backed by some of the most reputable advisors in the industry like Eight Roads Ventures, the proprietary investment arm of Fidelity International.
MYTHEO, on the other hand, is equipped with expert fund managers who manage the algorithm in the background, said Tan of MYTHEO.
“Behind the scenes, the people who designed these algorithms are humans and in MYTHEO’s case, we have experienced and professional fund managers who are ex-Blackrock, Nomura professionals and professors from Kyoto University who are knowledgeable on fund management. So they put the algorithm in place that tries to capture the essence of a fund manager,” he said.
So should you invest via robo advisors in today’s COVID-19 world?
Traditional investments can require a lot of money up-front, but you could start investing via robo-advisors with just RM100. However, like any other investments or platforms, robo-advisors don’t come without its limitations. The key is to really weigh the pros and cons and figure out if it works for your own circumstances.
So if you do decide to give it a try, we advise you to go with a robo-advisor that provides the best transparency – meaning the app clearly lists all features, capabilities, and strategies.
It should also list all the equities chosen in a portfolio and explain the strategy behind it. The last thing you want is to invest in something that you have no understanding about.
Good luck and we hope you found this piece to be informative!
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