In the Asia Pacific, 90% of the asset in the bank is unmanaged, with a total value at $32 trillion. Jerry Peng, CEO of Trading Valley started his presentation to Business Next about his Fintech startup with an appalling figure. This is the market he chooses to explore and it's enormous not only in size but in potential.
Think about why people would rather save up than invest. It's not only that they tend to believe investing exposes them to risks and uncertainty but that they shy away from traditional financial advisors, who charge a high wealth management fee without guaranteeing returns.
But for ordinary people, probably laymen in investing, it's nearly impossible to invest on their own while ensuring stable returns, too. They often struggle to pick the types of assets to invest in, let alone forming a portfolio.
Founded in 2014, Trading Valley develops an AI-powered robo-advisor to help people make wiser investment decisions and, as Mr. Peng said, "to bring technology to the public."
The startup uses an AI model to extract and analyze a huge amount of financial data, including volume-price trends and financial reports available on the Internet, to forecast 18 markets across the globe with more than 70% accuracy. "We don't adopt human perspective (from economists, for example) but have AI technology identify the patterns for us," he added. It's what makes it different from its competitor Betterment, an NY-based online investment company.
With such technology, Trading Valley works with second-tier banks to offer customized, automated investment services to their clients based on their financial goal and acceptable level of risk in Taiwan. The trained AI model picks out a number of individual stocks, ETFs, and regular funds to ensure 5 to 9 percent annual return. In the US, as a licensed online advisor, they develop strategies for excess return directly for high-end clients; despite a high risk, an annual return from 8 to 20 percent can be expected.
This year, the Taiwanese startup has been selected for the accelerator in Australia: Startupbootcamp Fintech Melbourne. It opens the door for the company to tap into the market in Australia and work with the National Australia Bank (NAB), one of the four largest local financial institutions. Later, it hopes to collaborate with not only banks but securities dealers and asset management centers there. The goal, Mr. Peng said, has been to drive the wave with digital transformation in the financial sector.
At the earliest, Trading Valley will start fundraising (pre-A funding) at the end of 2019 to acquire more B2B clients.