Despite the turmoil occurring in the world, expansion and competitive activity in the robo-advice space has continued. As the year closes, United Overseas Bank (UOB) has announced a robo-advice collaboration with telecommunications company Singtel, with the product set to launch in early 2021. Demand and competition in the robo-advice space is rife, so UOB’s unique strategy to gain access to a large pool of consumers is a worthwhile move.

Technology companies breaking into the financial services industry is not news, especially in Singapore. February 2020 saw ride-hailing company Grab acquire robo-advisor Bento. And Singtel itself announced a collaboration with Grab earlier this year to start its own digital bank, after gaining a much-coveted digital banking license. Financial innovation is evidently rife in the country. This new collaboration between UOB and Singtel will see a robo-advisor offered through the telecommunication company’s mobile wallet, Dash.

GlobalData’s 2020 Banking and Payments Survey shows that retail, emerging affluent, and mass affluent investors in Singapore have increased their usage of robo-advice in 2020 compared to the previous year. Meanwhile, GlobalData’s 2020 Global Wealth Managers Survey conveys that demand for automated investment services among even high net worth individuals in Singapore is expected to increase by 65% in the next 12 months (despite 30% of wealth managers in the country not offering such services). So both UOB and Singtel can be assured there is room and potential to succeed with this product.

The alliance is a win for both parties. UOB launched the UOB Invest robo-advisor earlier in the year. The service was made available to the over 5 million customers UOB boasts in Singapore and elsewhere in the region. The collaboration with Singtel will build on UOB Invest, extending its reach across South East Asia to Dash’s 1 million users. And Singtel has announced the opportunity for the product to reach associates of the firm, such as Grab, which has over 35 million customers using its service. For Dash, this ticks off another financial service product to be offered on the platform as it aims to become a one-stop shop in consumer finance. This is a clever move considering holistic financial management is yearned for by consumers, and has been the goal of many successful large robo-advisors in the US.

This service is set up well to succeed, but there are no guarantees in the robo-advice world. For longevity the product must cater to the needs of customers demanding an automated investment service. Robo-advisors exiting the industry – whether an old guard or a new entrant – is not uncommon, and many current players are finding the robo-advice model unprofitable. From a competitor perspective, OCBC and DBS will also be keen to expand their product reach. So it is key that this new product meets consumer needs for sustainability, as well as being offered to a wide customer base.

UOB will be able to offer this synergetic robo-advisor to a larger pool of consumers, with a wide distribution base crucial for success in this low-margin market. Meanwhile, Singtel’s Dash moves a step closer to becoming an all-in-one finance platform. Demand for automated services is strong in Singapore and South East Asia as a whole, with space for more players providing grounds for this collaboration to be fruitful. However, the product itself must cater to its target audience for success.