Monday, 24 June 2024

Lu International's Wong: "Customising technology for markets draws in wealthy customers"

5 min read

By Richard Hartung

Lu International is building an online wealth management platform, Lu Global, that leverages technology from China yet is tailored specifically for Asians outside of China.

  • Lu International has leveraged leading-edge technology from Chinese parent company Lufax and customised its wealth management app for local markets in Asia
  • The app enables wealthy customers to invest in products such as structured notes and funds, and Lu Global is moving towards enabling small-sum investments in private equity
  • More than 150,000 consumers downloaded and registered on the app in three months

Taking a different approach from some other Chinese financial services firms, Lu International is building an online wealth management platform, Lu Global, that leverages technology from China yet is tailored specifically for Asians outside of China. Whereas parent company Lufax in China is focused on the domestic market, Lu International CEO Kit Wong told The Asian Banker, “we are international, so it’s international products. We work with all the global product providers.” The current product mix, he said, includes funds and yield-based products as well as structured notes. “Those are quite different from the domestic market (in China).”

            A key advantage for investors, Wong said, is that Lu Global also offers products at smaller investment amounts, rather than the significantly higher amounts they would need to invest to get the products elsewhere. “For example, some products take a dollar. Some, at $5,000, you would only get from other sources with investing a substantial amount.”

            A key area where Lu International has benefitted from Lufax and its parent Ping An Group is in technology. “We work with Lufax and Ping An to see what they’re doing and see what can be adapted,” Wong said. “One of the things we use is facial recognition technology, as an additional means of verifying identity. We had to train it up for Southeast Asian customers. It scans your face, matches based on dot points, as proof of your identity. We are also working with Ping An on other things”

            While it does leverage Lufax’s technology, Lu International also customises its solutions for local markets. “It’s a balance between standardisation versus localisation,” Lu said. “To do well in any market, you want to be as localised as possible. People feel comfortable with something familiar.” At the same time, “your business wants to be as standardised as possible, to get economies of scale.” With digital solutions, he said, “you can become more localised without incurring as much cost as you did in the past. We recognise languages are different, cultures are different. What do we need to localise to resonate more with the local market? That’s a conscious decision. We’re happy with that result.”

            One area that has required significant effort is adding in languages. Adding English as a language into the app from the original Chinese, Lu said is “one thing people underestimate. A language is a fair bit of work. You can’t take literal narrations of words. You make it familiar, change the workflows to accommodate.”

The app, Wong said, is for people who are more comfortable with digital platforms, more self-directed, and want to make their own decisions. The target at this point is customers with $20,000-$40,000 AUM (assets under management). While only accredited investors can invest through Lu Global in Singapore, a broader range of individuals in other markets can use the platform.

            For customers who download the app, onboarding is entirely digital. “We ask for your passport, do facial recognition.” Consumers who register also give permissions for access to a variety of data. “To use a functionality, you use the permissions,” Lu explained. “It doesn’t mean you extract data. For facial recognition, we need access to the camera. (For) education pieces, we provide the ability for you to share to your friend. To have that functionality, permission will be required for WhatsApp. We don’t download that data. You want to look up your contact, my app needs to be able to interact with your contacts. The app doesn’t download your contacts.”  

            Lu International is continuing to work on enhancements, with the customer journey as the key focus. “You learn with the customer,” Wong said. “They give feedback, you adapt. We are constantly listening to the customer. I’m still pushing iterations.”

Customers have apparently found Lu Global appealing. Following a soft launch in September and using advertising as well as booths at events from November onwards, Lu Global now has more than 150,000 users registered on its app. “We’re quite happy with that,” Lu said. The customers also have varying degrees of involvement, he noted. “Some are purchasing. Some register and are just browsing. We’re encouraged to see quite a few customers registered for quite a while constantly visiting the platform to look at articles.”

            Going forward, Wong said, “we see greater fragmentation. Digital is accelerating that fragmentation. Most customers have more than one bank account. They use different ones for different purposes. Customers will start adopting different channels for different purposes. We would expect to see more into a digital channel over time.” Although he believes digital “will never be the sole channel,” he also expects it to become increasingly significant.

            While it is still early days for the platform, the approach Lu International has taken with customising its platform for local markets and the number of users on its platform demonstrate how a market-specific approach rather than just using Chinese technology can lead to relatively strong growth in markets across Asia.

Keywords: Financial Service, Online Wealth Management, Technology
Institution: Lu International, Lufax, Ping An, Whatsapp
People: Kit Wong
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