Good as gold

Good as gold

Robin Lee banks on financial inclusion with savings app that gives everyone access to the precious metal market.

People might not be articulate in the financial vernacular, but they get it that gold keeps its value and in times of stress, it is a safe-haven asset
People might not be articulate in the financial vernacular, but they get it that gold keeps its value and in times of stress, it is a safe-haven asset

It is common knowledge among traders that when geopolitical tensions rise, so too does the price of gold as it is considered a safe haven compared with other investments. But Robin Lee believes gold trading shouldn't be limited only to deep-pocketed market professionals. In his view, it is a good tool for anyone interested in saving.

That belief led the Malaysian entrepreneur to develop HelloGold, a savings app that markets itself as a financial inclusion platform that anyone can use.

"Gold is a kind of ubiquitous asset that could solve a lot of financial issues that people face and in turn will solve a lot of socio-economic problems," he tells Asia Focus. "This is because when you have hope, when you have hope for children, for a better future then you are more inclined to act rationally and act in the interest of the community rather than in the interest of yourself."

The idea of using gold as an asset to help people save came to him when he was working as the chief financial officer at the World Gold Council (WGC) in London. Helping people change their lives for the better through saving has been a passion of his ever since the Asian financial crisis in 1997.

Back then, the Oxford graduate was working as a manager with Securities Commission Malaysia in Kuala Lumpur, his home town. The impact of the regional financial meltdown that began in Thailand in July 1997 left an indelible impression on him.

"I saw how suddenly, in the space of six months, life changed for many people," he recalls. "Particularly, for people who were not responsible for creating the crisis in the first place.

"People actually died. In Indonesia there were riots because when you are desperate, you will do anything to survive and I thought that it was fundamentally unfair since what was available for the affluent was not available to everyone."

According to a study done by researchers in the UK and Taiwan and released in 2009, the suicide rate among men rose 45% in South Korea, 44% in Hong Kong and 39% in Japan in the year following the 1997 crisis. All told, 10,000 more people ended their lives in those three countries in 1998 than in 1997.

The shocking increase was most closely related to rises in unemployment, said Shu-Sen Chang, a psychiatrist at the University of Bristol who helped conduct the study.

Another story that moved Mr Lee emerged when he was working as a project leader at the Boston Consulting Group and he was reviewing the CV of a young woman who had applied to join the firm.

"I asked her, 'Why did you choose this university?' and she answered that she did not choose it," he says.

"Her family had saved up to send her to a university in Australia. But then the ringgit was devalued and the money that they had saved was no longer enough to pay for the school fees abroad.

"That sucks because it's one thing if you do not save and you can't afford stuff. But it's something else if you saved, you did everything right and all of a sudden, everything is gone, not because you did anything but because of things that are beyond your control."

Ever since then, Mr Lee has been on a mission to find a solution to deal with social and economic inequality.

At the WGC, part of Mr Lee's responsibility was overseeing the relationship with the world's largest gold trust worth more than US$30 billion. As the CFO, he was also involved in other market initiatives, such as helping to set up micro gold products with the Industrial and Commercial Bank of China (ICBC).

"I saw how these two things (the gold fund and the micro gold products) work," he says.

"I saw how governments and central banks specifically used gold to protect their wealth and how the mass affluent and rich used gold to protect their wealth and it kind of made sense for me -- particularly after we saw how ICBC took off and how people in China used the micro gold products to save."

Gold has historically returned around the rate of inflation and I like that because it is steady.

For me, I prefer gold to be good but boring … because once it starts to behave in an abnormal way then it encourages a different type of behaviour


With the inspiration fresh in his mind and the basis of a solution in place, Mr Lee left the WGC to pursue his own business dreams. He and Ridwan Abdullah founded HelloGold in 2015 and spent the next two years developing the app.

"I had this itch that I desperately needed to scratch," he recalls. "I needed to do it because I was passionate about the idea and I wanted to make it real, and the only way to make it real was to do it myself."

HelloGold, conceived as a financial inclusion platform that aims to democratise asset-based savings and lending products through digitisation, was launched in Malaysia in 2017. The first sharia-compliant (ethical finance) gold digital application, it is beginning to change the way people buy and sell gold.

To keep it simple, the platform basically enables mass-market customers to access micro savings in investment-grade gold through a blockchain-enabled mobile application, with transaction sizes that start from 1 ringgit in Malaysia or 10 baht in Thailand. HelloGold makes clear that its customers are the only owners of the gold, no matter what happens in the market.

Under the principle of bailment established under English common law, a liquidator must return acquired property to the customer even if the company or its agents were to fail. This means that the company cannot use customers' gold for any other purpose without their express permission.

HelloGold customers have the option to redeem gold for cash, or in physical bars. The gold savings are held by an industry-leading vault operator in Singapore and fully insured against any physical loss. Savers can also utilise their gold savings as collateral for short-term financing needs and convert gold held within the app into a digital gold-backed token, fully backed by investment grade gold.

"A lot of people talk about financial literacy and the inability to save where people need to be educated in order to do it, I fundamentally disagree," says Mr Lee. "I think people understand, they are not stupid. Through our research, we found that 85% of people are thinking about saving but they didn't know where to put their money."

If people these days put their money in a bank, the interest is very low and "people are literally throwing their money away" because inflation is "burning a hole in your pocket". Therefore, most people choose to spend instead.

"If they find something that they can save into and it makes sense, I believe that people will act but right now, they do not have that choice," he says.

Mr Lee sympathies with anyone who is trying to figure out how to best manage their money. Even though he has been in the financial markets for most of his life, he admits he still finds it hard to choose which fund manager to use or which fund to save his money in.

"That level of financial literacy is beyond all of us unless you are in the market and you are tracking it on a daily basis," he adds.

Mr Lee believes that there are three asset classes that people understand: cash, real estate and gold. People understand gold because it is the oldest asset class in the world and something valued in all cultures.

"People get these three things," he says. "Gold is a very simple product that people understand. They might not be articulate in the financial vernacular, but they get it that gold keeps its value and in times of stress, it is a safe-haven asset."

The fact that anyone with a mobile phone can now trade gold is still something magical to Mr Lee. "With 10 baht, we can give people access to gold at spot prices rather than at physical prices," he says.

The problem with buying one gramme of physical gold, he says, is that it is a bad way of investing because when people buy one gramme of gold, the raw material itself costs one gramme worth of gold.

Then you have to pay the manufacturing and distribution costs and the margin, and you end up paying a premium of anything between 20% and 40% over the actual value of the asset, which is actually "a crazy way of investing". But that was the only that people could get involved in the market until about two decades ago.

"What we can do now is when you want to buy one gramme worth of gold, you are literally just paying for one gramme of gold," he says. "We do charge a small fee but this is fantastic because people now have a good way of saving rather than having to go out to buy physical gold."

He believes that in this day and age, people should have the ability to choose and if people, including the unbanked, want to buy gold with just 10 baht, they should be able to do it.

Since it was launched, HelloGold has acquired more than 100,000 customers. And after 18 months of operations during its proof of concept phase, the company has now expanded to Thailand and Indonesia with a working team of more than 90 professionals across all of its offices.

Thailand is the world's sixth largest consumer of gold and a "very important" market for the firm, says Mr Lee.

HelloGold has attracted Series A funding from investors including Finlab, which is a joint venture between United Overseas Bank and the Singapore technology agency SGInnovate; 500 Startups, and private funders. It is now planning a Series B round to fund expansion to the Middle East (UAE) and Africa (Senegal) by the end of this year.


More than 20 years on since the crisis that shook Asia, the problem of inequality and financial inclusion has not got any better in Mr Lee's view. In many ways, he says "it has got worse".

The problem not only persists in Southeast Asia, he says, but globally. Dissatisfaction is causing many to rebel against the status quo because the status quo has not worked the way that it should for a large number of people. That discontent underpins the Brexit phenomenon but there are many other similar examples, Mr Lee says.

"This is happening everywhere, even in Singapore where you see people in public housing talk about 'What's in it for me?', 'Why are these migrants coming here?', 'What about my job, my life?' No economy is immune from it."

And while the current protests in Hong Kong are seen as having their roots in politics, there is something deeper going on. They should be viewed as "a bellwether for capitalist systems that fail to address inequality", China experts Andrew Sheng and Xiao Geng wrote in a commentary for Channel News Asia on Aug 29.

Looking forward, Mr Lee believes that geopolitical conflicts all over the world will motivate more people to invest in gold, but he is not concentrating on that aspect of the market.

"Gold has historically returned around the rate of inflation and I like that because it is steady," he says. "For me, I prefer gold to be good but boring … because once it starts to behave in an abnormal way then it encourages a different type of behaviour."

As a student of philosophy, politics and economics, Mr Lee understands the basics of geopolitics. The world is now in a "pretty scary place", he says, with Brexit in Europe, war in the Middle East, the ongoing Sino-US trade war and tensions in Taiwan and South China Sea.

Hence, the answer to what will happen to gold prices depends on how people think all of this might end. Whether India and China will continue to be the two largest gold markets, accounting for 50% of global demand, is another question to ponder.

"The upside potential for gold is significantly higher than the downside potential," says Mr Lee. "I personally am bearish geopolitically and therefore bullish on gold but that would be apocalyptic and a horrible world to be in. So, I prefer gold to be boring."

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