Category: News

HERZLIYA, Israel, May 31, 2018 /PRNewswire/ — BondIT today announced that leading fixed income house, FIIG Securities, has signed an agreement to use its bond portfolio solution for relationship managers.

BondIT is a bond portfolio solution provider that empowers investment managers and advisors to create and optimise bespoke fixed income portfolios with sophisticated, yet easy-to-use tools powered by proprietary machine learning algorithms.

FIIG Securities is Australia’s leading fixed income house with over AUD 10 billion under investment. With offices in Sydney, Melbourne, Brisbane, Perth and Malta, FIIG’s team of over 140 employees provides service and support to over 6,000 clients across Australia.

To support the company’s substantial growth in the fixed income market, FIIG Securities will adopt BondIT across all front office users to bring efficiency to daily activities including new portfolio construction, investment idea generation, relative value analysis, portfolio monitoring and portfolio optimisation. BondIT will integrate with FIIG Securities’ core investment management platform, SimCorp Dimension, providing users with seamless access to all the information needed to provide an enhanced service to FIIG Securities’ growing client base.

Etai Ravid, CEO and founder, BondIT, comments: “Over the past year we’ve built a great working relationship with FIIG and are delighted with their decision to deploy our leading fixed income technology platform to support the growth of their business. FIIG recognises how new technologies are reshaping the investment industry, enabling businesses to scale and ultimately enhancing customer service. We are excited to partner with the team at FIIG to help them realise their growth ambitions.”

John Prickett, Chief Operating Officer, FIIG Securities added: “Demand for fixed income, and in particular corporate bonds, is on the rise with more and more investors realising the benefits of corporate bonds as part of a diversified portfolio. The BondIT software will further enhance our offering, pairing the knowledge of our expert team with the latest technology to identify more fixed income opportunities for our clients and help them maximise their investments.”

About FIIG Securities

FIIG Securities Limited, which is licensed by the Australian Securities & Investments Commission (ASIC), is Australia’slargest specialist fixed-income house.

FIIG has more than $10 billion in assets under advice in its short-term money market, bonds and custody business.  The company has Offices in Sydney, Melbourne, Brisbane Perth and Malta. For more information about FIIG Securities please visit Error! Hyperlink reference not valid.

About BondIT

BondIT, headquartered in Herzliya, Israel, enables advisors and investment professionals to significantly boost their productivity and trade flows by automating the construction, monitoring, and management of optimised fixed income portfolios. BondIT provides sophisticated, yet easy-to-use, tools backed by proprietary machine learning algorithms, helping customers scale their business, increase productivity, and meet their regulatory and compliance requirements.

In a case study with IBM, Dr. Hillel Raz and Dr. Eyal Kenig of BondIT described how technology is deployed to creates bespoke smart fixed-income portfolios in minutes to deliver greater value to investors.

“Our solution enables users to construct portfolios that are much more personalized to customers’ specific requirements, empowering them to invest more successfully. At the same time, the solution significantly cuts the time taken to create portfolios. Customers no longer have to wait weeks for investment recommendations—they can sit down with advisors for an hour and run through several portfolio options then and there.” — Dr. Eyal Kenig

Read the case study https://www.ibm.com/case-studies/bondit

Donald Chan, Head of Asia from BondIT, spoke about BondIT’s latest technology application with on the panel discussion at Asian Financial Forum 2018.

Ultra-low interest rates, quantitative easing, and loose monetary policy – a collective global financial comfort blanket that has been soothing us for the best part of a decade. Well, nothing lasts forever, and as we see a change in the stance of major developed-world central banks and the expected tapering of their bond-buying operations, we inevitably begin to question what will happen to the patterns of performance and correlations between bond sectors.

So what happens now?

In an environment where monetary policy tightening, it usually pays to shorten duration, reducing the sensitivity of fixed income portfolios to changes in interest rates that are felt most keenly by longer-dated instruments.

Of course, it is equally important for investors to know what level of risk they are willing to tolerate and to consider their aversion to losses, as falling bond markets are likely as interest rates rise. As we speak, bond markets, like equities, appear stretched in terms of valuation, having endured a multi-year bull market.

With the long bull market in bonds at risk, investors and their advisers should be proactive in at least considering their options. Is there something that can help them model a portfolio fit to prosper in the changing environment?

Federal Funds Rate Options Implied Forecast and Federal Reserve’s Target Fed Funds Rate Forecast per Dot Plot

Source: Bloomberg, Federal Reserve and J.P. Morgan.

Note: Fed Funds options implied forecast as of 12/13/2017. Fed dot plot as of 12/13/2017 FOMC Statement.

Opportunity set (and match) in fixed income

From a global perspective, the six months to end June 2017 saw net new inflows to bond funds of US$440.6 billion compared with equities, which attracted US$207.2 billion [1]. These numbers underline the fact that many investors continue to see bonds as a fundamental element of a balanced portfolio, providing some ballast to their more volatile and risky equity cousins.

Partly for this reason, investors or their advisers may be tempted to see fixed income as a homogeneous group. While there is undoubted correlation running through the different sectors of the fixed income market, the reality is that it is comprised of separate parts that react and perform in distinctive ways – indeed they should be expected to play different roles within a portfolio. What relatively stable government bonds bring to the game is very different to that of an emerging market or high yield bond allocation, which can be expected to provide more alpha but be a more unpredictable ride.

This is a conundrum. It is easy enough to make allocations to different sectors within the bond universe; where investors and their advisers are less proficient is in picking the right combination of mutual funds and ETFs to reflect changing market conditions.

The result is often a diversified but relatively dysfunctional portfolio that does not necessarily chime with the end-investors’ objectives. Where specific bets might effectively cancel each other out and where risk (interest rate or credit risk) may be at more extreme levels than realised.

[1] Global Fund Market Statistics Report For June 2017 – Lipper Analysis

Don’t just react, interact

What, therefore, is the optimal combination of the varied sectors and parts of the fixed income market as interest rates rise? How does one go about constructing such a portfolio?

One of the critical difficulties for a bond investor is the fragmentation and huge amount of data facing them, as well as the plethora of instruments in the bond market. Added to that is the inefficiency and, on occasion, illiquidity of various parts of the market.

The danger is that client portfolios are doomed to become sub-optimal or, in other words, suffer from misallocation of capital or the inevitable drift that occurs in portfolios over time, whereby the objectives of the investor and the expected performance of the underlying assets gradually diverges. The simple reason for this is that markets do not stand still. What was the appropriate combination of holdings last month may not be entirely right next month, or even next week. It is cumbersome and time consuming to continually reassess and tweak holdings to realign the portfolio with one’s objectives. What to do?

Artificial intelligence and data science have evolved hugely over the past few years so that they can readily provide solutions across many industries, not least investment management.

Regarding speed, there are algorithmic solutions available that can efficiently do in seconds what an investor might spend many hours to achieve. The crucial element is the swift sifting and analysis of all relevant data in an all-seeing, dispassionate manner by the software. It is a practical shortcut to a customised, optimal portfolio, slicing through the noise and, all too often, opaque nature of bond markets.

Turning to objectivity, and a technology-based approach eradicates the mistakes and subjective biases of the human mind. Where an individual may have preferences, the machine has none. It constructs the portfolio based purely on impartial observations. It is through such technology that investors can take back control, avoiding the drift towards dysfunctional bond portfolios.

At BondIT, our team has developed an approach that offers bond portfolio optimisation based on an objective analysis of millions of data as well as observations of market behaviour. New data is continuously updated, so our system learns and evolves in real time, reassuring both investors and their advisors.

What’s more, we have the added benefit of detailed, real-time, user-friendly analytics, which can be hugely useful for advisers when discussing portfolios with their clients. It provides a boost to productivity and client experience.

Be prepared

Customisation is an essential element, with tailored portfolios being generated off a single platform. Such a tool allows for existing portfolios to be uploaded and adjusted in seconds and new ones created. BondIT aggregates market data and client input and applies machine learning predictive algorithms to compare bonds, selecting those with predicted best performance for inclusion in the customised portfolios.

In an investment world where positive risk-adjusted return and performance is paramount and where efficient, relatively low-cost solutions are in demand, such technology-focused solutions are not just a response to today’s challenges but also pre-empt the environment we face in the years to come. For bonds, the income may be predetermined, but the future isn’t – it makes sense to be prepared.

Written By

Adrian Gostick
Chief Revenue Officer of BondIT

During the Fintech session at The Asset 12th Asian Bond Market Summit, the panel of speakers discussed how technology is rejuvenating the market with applications ranging from bond syndication to execution. BondIT’s Duncan Klein spoke about how our portfolio optimisation and idea generation engine clutched the pre-trade workflow. Find out more in the full article by Janette Chen of The Asset

Fintech accretive, not disruptive

By Janette Chen

SINGAPORE – Fintech in Asia is more “accretive than disruptive”, according to a panel of experts at The Asset 12th Asian Bond Market Summit held at the Conrad in Singapore. However, in terms of market penetration, Asia lags behind the US and Europe.

The public tends to think of fintech as a disruptor. “Fintech companies are not disruptive, we’re accretive,” says Paul Durrant, managing partner at Conduit Securities. “We’re bringing solutions to jumpstart many years of inefficiency of investing,” says Duncan Klein, head of outbound product management at BondIT.

With the fintech startups emerging in Asia, traditional financial institutions are starting to innovate, either by collaborating with fintech companies or bringing forth new ideas themselves. “The early adopters of e-trading in Asia are private banks,” says Klein. “Aspiration for fintech is not just within the private banks. This is what the end client is asking for,” he adds.

“Independent financial advisors are starting to see how we can build new technology in the current ecosystem,” says Klein. “Latest adopters are asset managers. They are adopting the execution desk style,” he adds, labeling the private asset management companies as the “non-adopters”.

Twenty years ago, equities trading was on the floor of the exchange and it is now electronic, says Rahul Banerjee, founder of Bondevalue. The significant changes in the landscape in this sector happened during the past few years.

“Electronic bond trading is pretty well adopted globally. Asia has been embracing it in the last five to seven years,” says Klein.

Singapore is seen as a hub for fintech. Their government has been targeting fintech as their core development strategy, providing a supportive environment. In October this year, the Monetary Authority of Singapore launched a transformation map for the country’s financial industry, highlighting continuous innovation and technology adaption.

However, compared to the West, Asia falls behind regarding market penetration. “The markets in the US and Europe are much bigger than Asia for fintechs,” says EK Ong, CEO and co-founder at Bondlinc. There is up to 50% non-bank financing in US; in Asia, the figure is only 5%, according to Durrant.

From a positive perspective, this indicates huge market potential in Asia. As for banks, a good first step for getting involved with fintech is use open APIs, Ong suggests. Looking at what Singapore has achieved during the past few years, the general outlook for fintech in Asian bond market is positive, says Banerjee. In addition, the rising second and third generation of wealthy individuals in Asia are already turning to fintech for investment solutions, says Durrant.

 

Fosun’s Partnership will Bring AI to China’s Fixed Income Market and Accelerate BondIT’s Global Growth

October 27, 2017 <<Shanghai, China and Herzliya, Israel>> Fosun Group (“Fosun” or the “Group”) announced today a strategic investment of US$14.25 million into Israeli FinTech company, BondIT. This marks the Groups’ first Fintech investment in the State of Israel. Upon completion of the transaction, Fosun is now a major shareholder of BondIT including representation on its Board of Directors.

Headquartered in Herzliya, Israel, BondIT provides an intelligent solution to fixed income traders and their portfolios. BondIT’s leading technological capabilities and global market network empowers investment managers to create and optimise bond portfolios with sophisticated yet easy-to-use automation tools powered by proprietary machine learning algorithms.

BondIT’s unique breakthrough lies in its ability to leverage data science and AI learning to overcome the complexity and inefficiencies often experienced in fixed income products. Its intelligence enables investors to quantitatively optimise the risks and returns of their fixed income portfolios. This makes BondIT’s solution for fixed income strategies a highly attractive proposition, not just in China but across key global bond markets.

Guo Guangchang, Chairman of Fosun said, “Innovation is key to development, and crucial to the future of humanity. As such, we are embracing the opportunities arising from the latest technological breakthroughs in AI and Industrial 4.0. We believe BondIT compliments the Group’s own financial ecosystem and as well as playing an important role in the upgrading of wealth management institutions with its disruptive technology. This investment also marks a continuation of our investment into the Israeli market, a market the Group remains optimistic on.”

Etai Ravid, Founder and Chief Executive Officer of BondIT said, “The long-term vision of BondIT is to bring significant efficiency to the global bond markets through the application of artificial intelligence and data science, and help our customers gain a competitive advantage through increased productivity and better client centricity. We are excited to be included in the Fosun network of innovative companies and for the opportunity to increasingly use our unique technology to benefit investors. And with Fosun members sitting on the board as part of the deal, we believe they will bring their investment experience and China market expertise to the company.”

Adrian Gostick, Chief Revenue Officer of BondIT said: “Fosun’s investment and partnership will have a significant positive impact on our business, allowing  us to accelerate our global expansion plans especially in the U.S., the world’s largest fixed income market. And with China’s market being the world’s third largest, and still growing in size and sophistication, riding on Fosun’s global financial network, BondIT is committed to becoming a leader in the market to greatly improve the efficiency of the financial sector.”

About Fosun

Fosun International Limited is a family-focused multinational company that has been listed on the main board of the Hong Kong Stock Exchange (00656:HK) since 2007. Founded in 1992, Fosun’s total assets exceed RMB500 billion (c.US$75 billion). With its roots in China, and through technology and innovation, Fosun’s mission is to create customer-to-maker (C2M) ecosystems in health, happiness and wealth, providing high-quality products and services for families around the world.

About BondIT

BondIT, headquartered in Herzliya, Israel, enables advisors and investment professionals to significantly boost their productivity and trade flows by automating the construction, monitoring, and management of optimised fixed income portfolios. BondIT provides sophisticated, yet easy-to-use, tools backed by proprietary machine learning algorithms, helping customers scale their business, increase productivity, and comply with fiduciary responsibilities.

This article was first published in the Fall 2017 issue of Family Office Elite Magazine.

Fixed income as an asset class has always been a core component of an ultra-high net worth individual’s portfolio. However, as an asset class historically lagging in innovation, are investors being adequately served, and are their investments truly tailored to their individual goals and requirements?

Adrian Gostick, Chief Revenue Officer of BondIT, shares his thoughts on the challenges facing investors, and how BondIT is bringing much-needed innovation to the world of bonds.

So what are the challenges facing investors in fixed income assets? Since the Great Financial Crisis of 2007-8, regulations limiting bank trading activities, and increasing costs of holding riskier bonds, resulted in dramatic drops in dealer inventory, reducing market liquidity and available

inventory.

To gain exposure to fixed income, in an environment of decreasing liquidity, many investors turned to bond ETFs. From 2008 to the beginning of 2017, assets held in bond ETFs grew 600% as investors were attracted by the perception of higher levels of liquidity, lower fees, and easy diversification. However, there is no free lunch, and such perceived benefits carry several negative consequences, which ultimately result in investors receiving sub-optimal returns versus a portfolio of individual bonds.

As an illustration, to provide sufficient liquidity to an ETF that is based on an inherently illiquid asset class, ETFs must invest into the more liquid spectrum of bonds. This liquidity comes at a cost, with more liquid bonds, in general, having lower yields, all other things being equal, than less liquid ones, thereby reducing the returns of an ETF versus a portfolio without such liquidity restrictions.

Looking at the tracking error of a bond ETF against its benchmark adds evidence this view. Despite the relatively low ETF fees versus those for an actively managed fund, once you add the tracking error, the overall cost of owning an ETF can be significantly higher. Many advisors, aware of the limitations of using bond ETFs, prefer the approach of providing a portfolio of individual bonds, tailored to their

client’s requirements. Providing a bespoke portfolio has many benefits, including optimising the returns for the level of risk taken, ensuring the holdings reflect their clients’ preferences, such as investing into “green” assets, or avoiding specific countries or issuers, and providing cash pay-outs for specific life events by aligning maturing bonds with those events.

Why don’t more advisors promote bespoke bond portfolios over ETFs?

Quite simply, the main challenge in providing bespoke portfolios to customers is that it is a mathematically challenging problem to create and maintain such portfolios. As businesses scale, e.g. with multi-family offices, the challenge becomes even greater.

Today the process to construct and manage bond portfolios is largely manual and Excel based. The universe of bond is much larger than equities, with issuers often having many bonds versus a single equity issue, and with each bond having different terms and conditions, levels of liquidity, and pricing. Making sense of such a large universe, and ensuring the bonds selected meet the customer’s constraints, is the first challenge.

Once a suitable universe of bonds has been selected there are additional challenges in selecting which of them, and in which quantities, should be combined into the portfolio. The difficulty is compounded by the need to look at non-linear constraints, such as a bond’s minimum denomination, or the increment in which it can be added to a portfolio, during the construction process, and the enormous amount of correlation data to be analysed in the universe selected.

Due to the mathematical challenge of creating a bespoke portfolio, that honours all the constraints set by the customer, and provides a target return with minimal amount of risk, it is normal to see the use of “model” portfolios, which although helping to avoid the lower returns of comparable bond ETFs, are not truly tailored to an individual customer’s requirements.

So how is BondIT helping?

Fixed income has always lagged other asset classes, such as equities or foreign exchange, regarding innovation. Whether it is electronic trading, algo-pricing, roboadvisory, or introduction of ETFs, bonds have always been last to the party! The same is true in portfolio construction, optimization, and investment idea generation, the space that BondIT is focused on.

BondIT was established in 2012 with a mission to leverage data science and machine learning techniques to simplify the process of constructing, optimizing and managing fixed income portfolios. By leveraging machine learning algorithms, a user can enter portfolio goals, such as target returns, portfolio rating, and duration, and detailed customer constraints, for example, types of bonds, level of exposure to specific issuers, and percentage ranges for specific currencies, sectors, and coupon types, and construct an optimised portfolio within a matter of seconds.

Once the portfolio is created the user can instantly see detailed characteristics of the portfolio, such as which sectors, rating buckets, or currencies are contributing to the risk, and portfolio level figures including the yield, duration, rating, and VaR. The agility to quickly create, and tweak; portfolios provides an advisor with the ability to have a more engaging and meaningful dialogue with his customer, helping ensure a truly bespoke portfolio is created.

Portfolio monitoring, with customisable alerts, for example on market level changes, rating changes, and upcoming cash-flows, combined with algorithmically generated switching and rebalancing ideas, helps ensure the portfolios remain optimised for the customer’s specific goals.

In conclusion

Fixed income has always been a challenging asset class for investors, with innovation lagging other asset classes. But rather than taking the simple approach of gaining exposure through bond ETFs, which in the long term will provide inferior compensation for the risk taken, and cannot be tailored to an individual’s specific requirements or life events, it’s worth taking the effort to construct a carefully tailored, bespoke portfolio of individual bonds.

BondIT’s unique technology can help family offices provide a truly bespoke service for their customers, by supporting the construction, monitoring and management of their fixed income portfolios.

Bio: Adrian Gostick is Chief Revenue Officer for BondIT, and has over 25 years’ experience working in financial markets trading and technology roles across Europe, Asia and the U.S.

 

This article first appeared in the events brochure of Robo-Investing Europe 2017

Over the last few years the world has seen a dramatic growth in robo-advisory solutions to automate the process of asset allocation, and construction and management of appropriate portfolios. Despite the proliferation of solutions now available, numbering in the hundreds, there has been little focus on solving the challenge of creating and managing fixed income portfolios using actual bonds, rather than ETFs. Addressing the challenge of providing a robo-advisory platform for individual bonds is what BondIT, an Israel company headquartered in Herzliya, has been focused on since it was established in 2012.

Automating the construction, optimization and management of fixed income portfolios is a much more complex problem to solve than for asset classes like equities or ETFs, but with a market size more than double that of global equities, and with more than triple the daily volume, is a market ripe for disruption. BondIT’s expertise in managing big data, and in the application of proprietary machine learning algorithms to the world of fixed income data, has enabled the company to build a platform on which advisors and asset managers can automate the construction, optimization and ongoing management of fixed income portfolios. “Using the BondIT platform allows a user to construct a customised portfolio, taking into account investor constraints such as ratings, liquidity, bond types, etc., and optimized to hit portfolio targets with minimal risk, in a matter of seconds”, states Adrian Gostick, Chief Revenue Officer for BondIT. “The same process in a private bank could take several days”, adds Gostick.

Today the bond advisory process remains a very slow and manual process, with Excel the standard tool used to try and select appropriate bonds for an investor. Very often recommendations are based on inventory an institution wants to push rather than putting the needs of the customer first. For organizations to scale their business they must either add people, or look to technology solutions. Private banks and wealth advisors are starting to wake up to the opportunity that solutions like BondIT’s can bring. “Over the last year, we’ve seen a number of banks looking to engage in conversation with us as the realisation grows that a partnership approach can accelerate digital transformation”, explains Gostick. “And using a platform that tailors investment advice to an individual investor, and can demonstrate this with detailed audit trails, helps ensure organisations meet their fiduciary responsibilities towards their clients”.

As well as automating the construction of fixed income portfolios the BondIT platform provides alerts and rebalancing suggestions to ensure the portfolios remain optimal and within the mandates and constraints of the investor on an ongoing basis. At all stages of the workflow detailed analytics are available to show the impact of any changes in terms or returns and risk in the portfolio. “As well as traditional measures like duration and VaR the platform shows where in the portfolio the risk is coming from, for example by sector of issuer, or currency denomination of the bonds”, Gostick explains.

BondIT recently entered into a strategic partnership with Wind Information in China, the leading provider of fixed income data for the China market. “As the China market continues to open to investors, and with Chinese bonds soon to be included in global fixed income indices, providing a platform to build portfolios, powered by the most comprehensive data available for the China market, will significantly help customers enter what can be an unfamiliar and somewhat opaque market”, mentions Gostick.

BondIT is looking to build on initial success by exploring how incorporation of behavioural data into the platform can increase trade conversion rates, and by integrating into liquidity venues to take into account available inventory and ensure ideas generated can be transacted. “The fixed income markets are only just waking up to the fact that there’s an increasing amount of data that can be leveraged to bring efficiencies to the market”, says Gostick. “Whenever someone is making a decision on the construction or composition of a bond portfolio we want to support that process”.

With yesterday’s announcement by Bloomberg of the addition of bonds from the Chinese interbank bond market into a parallel index to the Bloomberg Barclays Global Aggregate Index, China’s bond market has been thrust into the limelight.

Why is this important?

China’s bond market has grown to become the 3rd largest in the world, with $9.4 trillion in outstanding debt. The RQFII program announced in 2011, and a scrapping of quotas for most institutional investors, announced last year, have gradually opened the market to foreign investors, yet due to capital controls, opaqueness, and difficulty in understanding the risks, foreigners still only hold around 2.5% of the market.

The inclusion of Chinese bonds in global indices will accelerate foreign inflows. With a parallel index institutional investors will still have a choice, rather than be mandated, whether or not to include Chinese bonds in their portfolios. But the move will increase awareness of the opportunities in the China market, and force investors to start exploring investment ideas. With yields significantly higher than other markets (e.g. China 10 year yield is 3.33% versus 2.52% in the US, 1.68% in HK, and 0.46% in Germany), and a currency 10% cheaper against the USD than 2 years ago, there is plenty to attract investors.

As new participants enter the market we are also likely to see a rapid increase in sophistication in how the market operates. Although only Government and Policy Bank Bonds will be included initially, inclusion of other bond types, such as  MTNs and Enterprise Bonds, will likely follow. Having a broader investor base will result in better pricing of credit, demand for higher rating standards, and introduction of additional credit analytics such as default probabilities and implied ratings.

BondIT provides investors with a platform that brings a digital approach to bond portfolio construction and management. Thanks to our strategic partnership with Wind Information we can support foreign investors who are investing in, or considering participating in, the onshore Chinese bond market.

 

Donald Chan, BondIT’s Head of Asia Pacific speaks to InvestHK on BondIT’s push into the Asia-Pacific region through Hong Kong. Click here to read the article on InvestHK’s website.

The fixed-income market is a complicated world to navigate. Bonds come with many different ratings, and some are not rated at all. They usually trade in the “over the counter” market instead of on exchanges. Adding in other factors such as interest rate sensitivity, duration and maturity and so on, and the task of creating an optimised fixed-income portfolio becomes daunting.

That was why it took a team of 25 experts three years to get BondIT, a digital algo-advisory solution for fixed-income investment, ready for commercialisation last year.

“We have people from the financial market with fixed-income knowledge, and those with data and machine-learning expertise; five of them are PhDs,” Donald Chan, Head of Asia Pacific, said. “The combination of know-how and the amount of lead time we have entered the market to generate this solution is precisely our competitive edge.”

BondIT has introduced the solution to its home country of Israel and to Europe, and it is now available in Asia as well. Given his in-depth understanding of the Asian markets and experience working with Israeli tech companies, Chan co-founded the Asia business with Hong Kong being chosen as its regional hub. Beyond Hong Kong, BondIT has successfully launched its business in Singapore, Korea, and now Mainland China.

“We have decided on Hong Kong because it is the financial hub of Asia, and it is one of the most developed and established fixed-income markets in the region. This city is also a wealth management hub, and then there is the ease of access to the Mainland Chinese market,” Chan explained.

The fixed-income market in Mainland China is rapidly developing, he furthered, and his company has formed a partnership with Wind Information, a leader in the country’s financial data services industry. He added that having a presence in Hong Kong played an important role in securing the pact.

“Hong Kong is one of the most forward-looking cities in Asia when it comes to FinTech. The Securities and Futures Commission and the Hong Kong Monetary Authority are being strategically involved in the whole ecosystem, to act as an enabler for FinTech,” he said.

“They are encouraging adoption and testing, and we are seeing a lot of other countries trying to play catch-up. We have an advantage of being at least a year or two ahead.”

Chan emphasised that BondIT is a B2B2C solution aiming to equip investment advisors and portfolio managers at financial institutions to manage the fixed-income universe more effectively. The solution “cleanses” the plethora of data for accuracy and concision, and then seeks out bonds based on an investor’s constraints and goals. What used to take analysts and financial professionals hours and days to do, often with sub-optimal results, can now be done in seconds, with more efficiency and precision.

“With our solution, it takes 15 seconds to construct a portfolio,” Chan said.

The efficiency allows the advisor to provide clients with timelier advice in response to the fast-changing market. The solution also sends out alerts when bonds in a portfolio are maturing or when weightings of assets in a portfolio need rebalancing.

From the financial institution’s perspective, Chan explained, the solution frees up time for advisors to reach out to “sleeping” clients and reactivate their accounts, and hence a wider outreach to clients. Recommendations are based on clearly defined risk parameters and analytics are well presented, which helps ensure regulatory compliance.

Heading BondIT’s Asia base in Hong Kong, Chan works with a chief revenue officer and a head of product management. He plans to add another 10 to the headcount in 2017 for functions such as front-end development, client support and marketing.