According to a ResearchAndMarkets report, the digital asset management market was valued at around $1,240 million in 2018, and it is projected to reach $6,901 billion by 2024. The market is expected to grow at a CAGR of 34.1%, during the forecast period, 2019-2024. The report also suggests that the market is witnessing increased adoption of big data analytics and Artificial Intelligence, including facial recognition.
Asheesh Chanda was aware of the importance of AI in financial planning and knew how to deploy it to deliver unbiased and factual recommendations to clients; thanks to his experience of managing a Singapore-based global macro hedge fund called KrisCapital. He used this vision and knowledge to create Kristal.AI – an AI-powered Digital Wealth Management Platform – in 2016 along with his friend and former IIT-D room-mate Vineeth Narasimhan.
AI, Show Me The Money!
Kristal.AI offers a digitally-enhanced wealth management platform that allows its customers to invest in global and diversified strategies. According to the company, these strategies are created using a bionic approach; using a combination of AI-powered asset curation and human expertise.
On the AI side, the company employs its proprietary algorithm GAIAA (Genetic Algorithm-based Iterative Asset Allocation). GAIAA helps it cherry-pick the best Exchange-traded funds (ETFs) from the pool, runs simulations to check for the strength of each portfolio, and automatically monitors portfolio performance. On the human side, Kristal.AI claims to have an in-house Investment Committee (IC) made up of experts who have spent years in the trading and financial domain and have a cumulative experience of 120+ years in the industry.
The company caters to a wide spectrum of investors – “from the mass affluent section which would like access to global products in a DIY, on-the-go fashion, and the accredited investor who wants personalized advisory services for wealth management,” says Chanda.
Investors can get started with us with the ‘Kristal Investment Account’ which is free for investments up to $50,000 and allows investors access to curated global ETFs.
For more sophisticated solutions, the company has the Kristal.AI ‘Funds Platform’ which is designed for the accredited investor. It has also partnered with premium funds in the business to incorporate their strategies directly on the Kristal.AI platform. “One can pick any from the choices on offer. Or, invest in the in-house fund Kristals that our experts have put together after careful market analysis and research,” Chanda explains.
Kristal.AI also offers a ‘Managed Accounts’ solution whereby investors can integrate, manage, and access multiple private bank accounts via a single platform, with on-the-go analysis. The company also offers a curated service called ‘Private Labelled Funds’ which are bespoke strategies that help investors get exposure to multiple asset classes.
While the ‘Investment Account’ is free of charge up to an investment of $50,000, the company does charge a fee for its other offerings.
Kristal’s Safety Arsenal
Talking about how the company safeguards its client’s client’s assets/investments, Chanda stated that Kristal.AI counts DBS Bank, SAXO Capital, and Interactive Brokers (IB) as its custodians. SAXO and IB also act as its brokers. The company is regulated by the Monetary Association of Singapore (MAS), the Securities and Futures Commission in Hong Kong, and by SEBI in India.
“In the financial world, it is important to do things by the book. Our regulators see to it that we stand by our promise of trust and transparency in every way. We use bank-level safety processes for data protection, and all payments are done via DBS Bank, to ensure safe conduit,” he added.
The company also claims that all its client’s assets are held in separate accounts in the respective client’s name and are not mixed up with the company’s assets. So that in an unlikely scenario wherein the company has to shut shop, all of its client’s investments are safe.
The Kris-Cross Path To Kristal
Post completing his engineering from IIT-D, and armed with an MBA from IIM-B, Chanda entered the field of finance with a position at Citibank India. After working with BNP Paribas for some time, he moved to Singapore to join JP Morgan Chase. He started Kris Capital after working for over 7 years with JP Morgan Chase.
Chanda opines, “After having spent over a decade and a half in the banking world, I was keenly aware of the lacunae in the traditional process, and the possibilities of using technology in finance post the 2008 debacle.” He believes Kristal.AI was an organic progression from there.
Milestones, Challenges & The Future
After four years in the business, Kristal.AI has close to 10,000 users from over 25 countries, with an Assets Under Management (AUM) of 100+ million. The company currently has over 60 employees across India, Singapore, Hong Kong. “The past year has seen us hiring on a large scale; especially for customer-facing roles.
Kristal.AI is backed by Chiratae Ventures in India, and other VC firms and private investors in Singapore. Back in 2018, the company raised $1.85 million in a funding round led by IDG Ventures India. It recently closed its Series A funding round but the company is open to talk to any investors or tech-enthusiasts who want to back the brand.
Although the company has achieved several major milestones within a short span of four years, the journey was not easy. According to Chanda, finding the right investors and talent who believed in their idea and vision was a major challenge that Chanda and Narasimhan faced during the early days of setting up Kristal.AI. Since they were trying to set up shop in Singapore, Hong Kong, and India, securing the legal requirements for each country separately was another major challenge.
“In the initial days, it was Vineeth, I, and three young coders in Bangalore; and that was the entire ‘team’. From paying bills out of our own pockets to personally choosing each and every member of our 60-strong company, Vineeth and I have been through the startup grind in every way,” Chanda reminisces.
Kristal.AI is launching a full-fledged product suite in India in early 2020. It has been offering LRS investments in India for about 2 years now, but it aims to expand its product range and offer more access to the Indian investor than ever before. It will also be consolidating its presence in Singapore and Hong Kong with more private banking solutions, and expand to other areas in APAC and Middle-Eastern region.
Chanda believes that AI has huge implications for fintech as a whole. “In wealth management, using Machine Learning to enhance risk profiling and recommendation is an important area of growth. This will bring us closer to the goal of uber-personalization, and offer respite from the cookie-cutter solutions generally on offer,” says Chanda.