Navigate your financial future

Fintech tools take the guesswork out of investing

Digital financial services are turning individuals into their own financial advisers, equipping them with the knowledge and insights to make more informed money decisions

The recent integration of Central Depository investment data to the SGFinDex further democratises financial planning for investors of all levels. PHOTO: GETTY IMAGES

When the pandemic hit last year, human resources executive Ms Juliet (not her real name) was worried about keeping her job.

She had good reason to be concerned: Her company was in the badly-affected food and beverage sector.

"The service staff were reporting extremely low numbers of diners and the company began allocating fewer shifts to part-time service staff," says the 25-year-old, who joined the company in 2019.

"I was worried that they would have to take more drastic measures if the situation did not improve."

To mitigate the uncertainty, she started putting money aside to build an emergency fund. Between January last year to October this year, Ms Juliet saved 60 per cent of her monthly income, up from the oft-recommended 20 per cent pre-pandemic.

While she did not set a fixed goal, she explained that she wanted "as much money as possible" in her bank account in case she was laid off.

Fortunately, she retained her job - and grew her savings.

Ms Juliet is now exploring investment options to grow her wealth as a hedge against future uncertainties.

She adds: "I've seen posts on social media platforms about the impact that long-term investments can have. Instead of letting my money just sit in the bank, investing it is a better way of letting my savings grow for the future."

By comparison, self-employed digital marketer Andrew (he asked that we not reveal his real name for personal reasons), 35, is a more seasoned investor. He started investing when he graduated from the National University of Singapore in 2011.

"Right after graduation, a friend approached me to sell me an investment plan. Since I had already secured a job at the time, I decided to use this as a way of forcing myself to save more money for the future," he says.

He adds that since then, he has realised that investments are "an essential part" of managing finances and continues to set aside a portion of his income every month for investing.

Over the past decade, Mr Andrew has purchased multiple investment plans and, more recently, has dabbled in the stock market.

To track his investment portfolio, Mr Andrew uses a spreadsheet. But there are drawbacks.

"With a full-time job taking up most of my day, it can be quite a chore to manually input all the holdings that I have across different platforms."

"Moreover, the market prices of my investments change day to day, and I have to update them in my spreadsheet."

Bird's-eye view with digital platform

To help individuals like Ms Juliet and Mr Andrew - from the novice to the seasoned investor - better track their personal finances and encourage financial planning, the Monetary Authority of Singapore and the Smart Nation and Digital Government Group launched the Singapore Financial Data Exchange, or SGFinDex, in December last year.

The free online service allows individuals to retrieve, with their Singpass, consolidated financial information from participating institutions and government agencies in one convenient portal.

Since its launch, over 150,000 users have signed up for the SGFinDex. Among these users, 290,000 bank accounts have been linked and 620,000 data retrievals were made.

From this month, SGFinDex users can also view their Central Depository (CDP) investment holdings. The CDP is the main custodian for securities listed on the Singapore Exchange (SGX) and government-issued securities.

This initiative is timely, based on rising interest in investing. According to SGX's 2020 annual report, the number of new CDP accounts went up by 35 per cent from 2019 to 2020, with higher trading activity across all customer segments.

DBS Bank has also seen a similar surge in retail equity trading activities compared to early 2020. Since January, there has been a four-fold increase in the number of retail investors who are invested outside of Singapore.

DBS is one of the seven participating banks providing customers with SGFinDex access through the DBS NAV Planner, the bank's digital financial and retirement advisory tool.

"The pandemic-fuelled market volatility brought new investors into the world of financial markets, who have actively participated in the markets since either directly through trading or indirectly through other financial instruments," said Ms Evy Wee, DBS Bank's head of financial planning, investments and insurance solutions.

Empowered with financial clarity

Banks are indispensable when it comes to managing finances. From tracking income and expenditure to monitoring the returns on investments and loans outstanding, banks offer a one-stop convenience for your financial needs.

"The boom in retail trading underscores the importance for financial companies to do more to help, even hand-hold, retail investors to invest their money wisely and safely, which starts with the ability to be able to track their investments holistically regardless of where they are held," said Ms Wee.

Digital tools such as the NAV Planner have been developed to make sure their customers know their financial health at a glance. With the SGFinDex, these tools have become even more comprehensive.

Using the NAV Planner, DBS customers can pull their financial information from their Central Provident Fund, Housing Board, Inland Revenue Authority of Singapore, CDP, and various bank accounts to instantly view their financial health within the same platform.

The number of active users on the DBS digital tool has doubled over the past year. And over 80 per cent of SGFinDex users access the online service through the NAV Planner.

Mr Andrew first signed up for the NAV Planner in 2020 as it was the first bank to offer digital onboarding and linkage to his CDP account.

Moreover, as he also invests in the US markets, he has a DBS multi-currency account which makes it easier for him to trade in US dollars and settle in Singdollar.

His spreadsheet woes have been circumvented using the NAV planner, as it automatically updates market prices and tracks all of his investments with just one log-in.

Since then, he has continued to use the NAV Planner to stay on track with his retirement planning.

Ms Juliet has been introduced to the NAV Planner recently and found it to be a comprehensive all-in-one tool for financial planning.

After answering a few questions to identify her investor profile and knowledge level, the NAV Planner has helped to identify areas of her finances that she has to strengthen, such as her investment positions.

The NAV Planner also used the information collected to provide personalised recommendations for various investment opportunities, with easy-to-understand highlights on the key features of the investment.

It even factored in Ms Juliet's average expenditure to suggest an appropriate amount of emergency funds and insurance coverage she should have before investing.

She shares that she also enjoys the daily Vickers updates, which helps her to build up her financial knowledge and provide bite-sized daily insights that she can read in her free time.

"The NAV Planner has been an extremely useful tool for someone like me who is just starting to invest," says Ms Juliet.

"It's simple to navigate and helps me to visualise what I need to do in the next few years to maximise my investment returns."

This feature is part of a series titled "Navigate your financial future" in partnership with DBS.

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