The Singapore heads of the two Nasdaq-listed discount brokerages told Nikkei Asia in separate interviews that they plan to ramp up hiring this year in the city state – the base for their drive into the 10-member Asean and its 650 million people.
Tiger, backed by Chinese electronics giant Xiaomi, and Futu, which has tech major Tencent as an investor, hope to unlock lucrative new markets in a region where a young population and an emerging middle class are increasingly drawn to investing in financial markets.
“A lot of all these Southeast Asian countries are still at the growing stage, and the middle-class investors and middle-class citizens there … (are) growing,” said Tiger’s Singapore chief executive, Eng Thiam Choon, adding that the company plans to increase its headcount in the financial hub by 10% to 20% over the next year, from around 50 now.
“This type … of growth will be able to support us to further enhance our service (around the region),” Eng said.
Tiger, which is the Singapore entity of Beijing-based UP Fintech Holding, launched its mobile trading app in the country in February 2021, after setting up its Southeast Asian office there in 2019.
Eng said the company is looking to Thailand, Malaysia, Indonesia and Vietnam for growth.
Futu is on a similar track after opening its Singapore office in March last year to roll out its moomoo trading app to new customers.
Its Singapore managing director, Gavin Chia, said Futu plans to expand its Singapore workforce to around 80 to 100 staff by year-end, from 40-odd currently, while looking to nations such as Thailand and Malaysia for business opportunities.
“Singapore is a very important place, or even a hub,” he said.
“Despite a small population, we see it as a very important place for us to launch into other Southeast Asian countries.”
Futu and Tiger view each other as close rivals, operating similar business models centred on app-based stock trading at discounted commissions.
The two Chinese players both target digitally-savvy young adults in the retail investing community as key customers.
The stakes are high for the two, who are set on overseas expansion even as authorities at home in China clamp down on the tech industry amid concerns over data management and privacy.
An online article published last October by the People’s Daily, the official newspaper for the Chinese Communist Party, warned that online brokerages operating across borders could violate user privacy and face regulatory risks – explicitly naming both Futu and UP Fintech. In contrast, Asean offers a calmer operating environment for the pair.
Futu and Tiger’s search for talent to fuel regional growth has been extensive, with both brokerages luring experienced staff from rival financial services companies.
Futu’s Chia was formerly a senior executive at UOB Kay Hian, the brokerage arm of one of Southeast Asia’s largest lenders – United Overseas Bank.
Tiger’s Eng was previously chief operating officer at broking service provider HGNH International Financial in Singapore.
Both outfits take after popular US-based digital trading platforms like Robinhood and Interactive Brokers – keeping overhead costs in check by minimising physical brokerage outlets.
In Singapore, Futu and Tiger are waging a battle to sign up new users to their platforms against incumbent brokerages run by local players such as UOB Kay Hian and PhillipCapital, which have been around for decades and do operate physical branches.
Over 80% of new clients registered by Futu and UP Fintech in the last quarter of 2021 came from outside mainland China, with Singapore a particularly fruitful market.
From Singapore, both players now face the challenge of penetrating other Southeast Asian countries, where levels of economic development and the maturity of retail investing communities differ widely.
“We do localise our content, including translations, with the help of local teams,” said Tiger’s Eng.
“Tiger Brokers also adopts different go-to-market strategies that are specially designed to engage, educate and acquire new investors – introducing brokers, [as well as] online [and] offline events.”
Futu believes getting experienced people to look after specific Southeast Asian countries is key.
“Futu is also looking towards hiring aggressively in various markets,” said Chia. “We believe that hiring local industry veterans who have specific market expertise will give us … leverage.”
While local bourses are likely to benefit as the two companies’ foray into regional markets buoys trading volumes, more conventional brokerage firms could be spooked by the competition.
The two Chinese brokers plan to expand their suite of products and services. Eng said Tiger is working on gathering its offerings into a one-stop wealth management platform. For Futu, letting customers tap cryptocurrencies is in the pipeline.
“We hope to get more licences from regulators,” said Chia.
“With more licences, we are able to deliver more interesting products to clients and in terms of coverage of products, surely we want to increase the broadness.”