Creating a niche as a digital brokerage

Creating a niche as a digital brokerage

ASL Securities plans to use an embrace of technology, strategic partnerships with banks and advisory services to become a major local player, writes Nuntawun Polkuamdee

"Our goal is to have our customers from equity trading seek wealth management services after they have invested in a variety of assets." — Chanchai Kultavarakorn, Executive Chairman, ASL Securities

Amid intense competition and digital transformation, ASL Securities aims to leverage its expertise in digital brokerage services and connection with partners in various financial sectors to become the country's most comprehensive online financial institution.

ASL started its businesses in 2015 when online firms began to play an active role in the Thai economy.

The company is the first Thai brokerage to market itself as an online broker, aiming to attract customers through lower commission rates achieved using a digital brokerage system.

LOVE OF TECHNOLOGY

Chanchai Kultavarakorn, executive chairman of ASL, said the company will fully integrate technology in every aspect of its businesses to save costs and increase access for investors.

Technology will be a key driver of growth for the company and the securities industry as it can make every business more cost-efficient, he said.

"I think the securities industry can move forward and compete by using technology," said Mr Chanchai.

"ASL uses cost management advantages to create added value for customers."

He said ASL is prepared to expand into other financial businesses to complement its brokerage. The company is licensed to conduct multiple other securities businesses such as investment banking, financial advisory and fund sales.

PARTNERSHIPS MATTER

ASL has partnerships with two major domestic and international banks that will serve as a foundation for ASL's business expansions in the future, Mr Chanchai said.

On June 26, 2019, ASL became a strategic partner of Government Savings Bank (GSB) as part of the bank's scheme to expand its business into securities investment by acquiring a 25% stake in ASL.

With the partnership, GSB and ASL strive to develop and expand a trading channel for investment in stocks, mutual funds and bonds.

In early 2020, GSB connected its customer base to ASL by launching securities trading services and encouraging customers to open trading accounts both in person at physical branches and via the MyMo app, which has 5.5 million active users.

Using GSB's 1,116 branches and more than 1,500 licensed investment employees nationwide, ASL was able to rapidly expand its customer base, he said.

Then on Jan 28, 2022, ASL announced another partnership with Bank of China Thai (BOCT), in which ASL serves as the distributor of BOCT's financial and investment products in Thailand, while providing access to the Chinese and international stock exchanges around the world through ASL's online platform.

Mr Chanchai said ASL's business structure is divided into two main divisions, comprising equity trading and wealth management, with the latter slated to start in May.

"We prepared our wealth management division for 14 months. Our goal is to have our customers from equity trading seek wealth management services after they have invested in a variety of assets," he said.

Mr Chanchai said the company added three new wealth management teams and equipped each team with experienced wealth managers from United Overseas Bank, Kasikornbank and Thanachart Bank to ensure customers get their investment queries resolved effectively.

He said any ASL customer can easily access all asset classes with only one account, while high net worth investors can simultaneously receive advisory services from the company's investment team without seeking services from other wealth management firms.

One major difference is Mr Chanchai's view that wealth management services should not be designed to serve only high net worth customers, but also general investors with smaller funds because they also need effective portfolio management, which can be accomplished affordably on an online platform.

He said ASL's wealth research team is in the process of developing various investment programs to help investors on all levels diversify their portfolios and choose products that are most suitable for their risk appetite and expected returns.

"Instruction and advice will be available online so people with fewer funds can plan their investments through the online system with no minimum requirement. Customers who want long-term investments can choose to invest by themselves or seek investment advice from the wealth management team," said Mr Chanchai.

BRIGHT OUTLOOK

In its seventh year of operations, ASL will continue to base its services online as the company believes the finance and investment sector will be primarily driven by digital and financial technology in the future, he said.

Mr Chanchai believes doing business in this new era will not require a large amount of capital nor several physical branches as more business activities will be done online on websites, apps and via digital marketing.

More businesses will opt to operate on social media to reach a new generation of customers, he said.

All businesses including those in the financial sector are being disrupted by technology, said Mr Chanchai.

Corporate loans may shrink as large corporations can raise funds through multiple means, such as listing shares on a stock exchange or issuing debt instruments. Both of these channels allow companies to raise funds directly from the public and adroitly manage their businesses by reducing dependence on loans, he said.

Investors now have more financial literacy and can choose from options suited to their risk tolerance, said Mr Chanchai. They can invest in low-risk assets such as money market funds and deposits, or aim for higher returns using securities firms.

In Thailand, the investment management industry has a market cap of about 5 trillion baht, which is relatively small compared with 14-15 trillion baht in bank deposits, he said.

Mr Chanchai believes more funds will move to wealth management and asset management businesses, in line with the global trend.

Deposits with securities companies regulated by the Securities and Exchange Commission are highly secure because these firms are required to clearly segregate customers' deposit accounts from the companies' capital pools, he said.

Customers' deposits are protected even if a firm goes bankrupt, meaning more investors may consider deposits with securities firms in order to capture low-risk returns, said Mr Chanchai.

In addition to digitalisation of traditional business operations, digital assets is another trend driving many financial institutions including banks to adapt to a changing landscape. Some major banks have already jumped on the bandwagon, he said.

According to Mr Chanchai, ASL is interested in the digital asset industry, but it needs time to evaluate the risk and study the feasibility of this business.

The company wants to wait and see how the market develops first, he said.


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