On Tuesday, Grab had announced that its financial unit will be launching a slew of consumer products, including micro-investments and loans, a pay-later program, and health insurance. Initially, its financial unity only focused on services for small businesses and entrepreneurs.
Singapore based Grab began its operation in 2012 as a ride-hailing company. In January 2019, it to build a digital insurance marketplace through a joint ventured with ZhongAn Insurance. The company has grown its financial services portfolio through a series of partnerships. Yesterday, Bloomberg reported that the company has raised nearly $200 billion from South Korean private equity firm Stic.
The new product of Grab’s Financial Group is AutoInvest. It is a platform that allows consumers to invest small sums of money through Grab’s consumer loans and expanded insurance offerings, including hospital insurance. Grab’s new consumer products were already underway but the COVID-19 pandemic has boosted its demand for services such as digital payments, online shopping, and insurance.
Also Read: Grab Puts Partnership with Wirecard on Hold
According to the company, its new consumer products will compete with services like StashAway. However, the competitive edge of Grab Financial Group’s is that the company already has a user base of millions in Southeast Asia. This will not only give it a competitive advantage of a built-in consumer base but also data to refresh the scoring models.
In 2019, according to a research program run by Google and Temasek and reported by e-Conomy Asia, as many as 70% of people are underbanked in Southeast Asia. This means that they either lack access to credit cards or long-term savings products. Also, about 40% of consumers qualify as underbanked in Singapore which is one of the financial centers in Asia. They estimate that, in Southeast Asia, digital financial services can generate revenue of about $60 billion by 2025.