This article first appeared in Digital Edge, The Edge Malaysia Weekly on June 10, 2024 - June 16, 2024

Findings of a recent study by Prudential Malaysia show that only 48% of Malaysians are actually satisfied with their financial well-being. Out of that number, 43% are concerned about securing their retirement comfortably due to stagnant wages and the rising cost of living.

It is not all gloom and doom, however. It is still possible to retire comfortably and financially secure with Finalyst’s financial planning platform for financial planners, which brings together fintech and artificial intelligence (AI) to offer real-time financial guidance and tools as well as help with financial literacy and overall security.

The start-up uses data to pinpoint potential shortfalls in financial planning, empowering planners to excel in their advisory roles. This not only builds wealth but also streamlines adviser-client relationships through Finalyst’s automated and user-friendly interfaces.

“AI-powered tools can analyse vast amounts of data in real time, allowing financial institutions to make data-driven decisions and optimise processes to reduce costs, mitigate risks and identify opportunities proactively. This enables them to stay ahead of evolving market trends, ultimately enhancing their competitiveness and driving growth,” says T J Tee, a co-founder of financial planning platform Finalyst.

And while these may help Finalyst’s audience provide the best solutions for its clientele, the team behind the platform plans to stand out from the competition too, says fellow co-founder Casper Foo.

“Unlike traditional financial planning tools that focus solely on budgeting or investment management, Finalyst provides a holistic view of one’s financial health, empowering planners to make informed recommendations in the areas of ALIE (assets, liabilities, income and expenses) in order for their clients to achieve their financial goals,” Casper adds.

Information is provided on-demand, so “whether it is basic information such as income, expenses and cash flow or more complex calculations such as annualised returns, Finalyst excels at real-time visualisation of financial data presented in a user-friendly interface,” says Tee.

The start-up’s primary target audience is professionals and organisations within the financial and wealth planning sectors. These range from insurance and unit trust agents to certified financial planners, chartered financial analysts and more.

“Finalyst’s user base is largely made up of young professionals and families looking to improve their financial health, plan for major life events and achieve long-term financial goals. There is also a small segment of high-net-worth individuals who are looking to diversify their financial portfolio and expand their insurance coverage,” shares co-founder Eric Foo.

Finalyst has already achieved a satisfying measure of success, Casper says. He gives a case study of a mid-level insurance agent who secured an RM80,000 life insurance premium case via the platform as an example.

“[The agent] had previously faced difficulties in proposing such a premium to the client due to the inability to clearly explain and demonstrate the need for [life insurance]. By using Finalyst to analyse the client’s financial health, a distinct gap in the client’s life insurance coverage was revealed. Finalyst’s user-friendly interface enabled both the agent and the client to easily visualise this. Once the client was aware of their risk exposure, it didn’t take any more convincing for the client to purchase the insurance policy,” says Eric.

Like many other digital financial planning tools, Finalyst uses AI. In fact, the team is currently pilot testing its AI Assistant feature with a focus group that comprises selected planners.

“Finalyst’s AI Assistant feature will enable users to zoom in on specific financial data in real time without them having to navigate around the app. Rather than replace the need for a financial planner, Finalyst simplifies the work for planners, freeing up valuable time for them to invest with their clients. In the near future, our AI Assistant will integrate with external data sources to provide up-to-date options for everything from insurance to investments,” says Tee.

Relying heavily on technology can come with an array of data security drawbacks. To mitigate this, Finalyst employs some of the best-in-class data security measures alongside regular security audits.

According to Tee, these measures include encryption, multi-factor authentication and secure data storage protocols. “We leverage the best-in-class of Amazon Web Services, which complies with the most stringent security standards such as FISMA, FedRAMP, PCI DSS Level 1, DIACAP and more.

“Technology adoption is the key factor for financial inclusion and we will see advanced technologies of today becoming commonplace in the not too distant future. By evolving with market trends and listening to user feedback, we hope to continuously position Finalyst at the forefront of the fintech revolution.”

Integrating technology into financial services can be done in a safe and stable manner too, Tee says. This is achieved by simply implementing regulatory frameworks, promoting collaboration between industry stakeholders and fostering innovation-friendly environments.

“By establishing guidelines for data privacy, cybersecurity and consumer rights, policymakers can create a level playing field for fintech companies and traditional financial institutions, all while ensuring that these technological advancements benefit consumers,” he says.

Critics, however, have also observed that financial tools like these have been around for an extended period of time. Despite this, there seems to be an imperceptible improvement in the average Malaysian’s financial management skills.

The primary reason for this is simply “the lack of financial education, which drives the rise of household debt and dwindling savings”, according to Eric.

“We have also met many working professionals who earn high salaries but are, at the same time, shouldering a serious amount of debt. The desire to live a lavish lifestyle in this materialistic society has driven many to spiral into uncontrollable credit card debt,” says Casper.

While it is most prevalent in the lower middle-income segments of the population, this shortsightedness is also a problem in the financial industry. “Agents prioritise hitting sales targets over investing time to truly discover their clients’ financial needs. Many agents are trained by agencies to sell products but few are equipped with the know-how to provide sound financial advice for their clients,” observes Eric.

The most reliable solution to combat this financial myopia is education and the Finalyst team is a strong advocate for teaching personal finance in schools — with the observation being that many graduates step into the industry without proper understanding of the realities of how a modern capitalist economy truly operates.

“However advanced, the fundamentals remain true — it is only when we have a grasp of how money works that we can begin to make money work for us,” he stresses.

Finalyst’s goals over the next few years are business-to-business-focused; the team will also continue building strong partnerships with banks and other industry players such as investment banks, insurance and unit trust agencies and the like.

The goal is a simple one: to establish Finalyst as the industry standard financial planning tool while showcasing its ability to help businesses drive sales growth and enhance client retention.

And while it is encouraging to see traditional financial institutions adapt as quickly as possible to fintech’s swiftly evolving landscape, “the pace of adaptation varies, depending on factors such as organisational culture, regulatory constraints and market dynamics”, says Casper.

“While some institutions are embracing digital transformation and investing in innovative technologies, others may face challenges related to legacy systems, risk aversion and regulatory compliance. Ultimately, the ability of traditional financial institutions to keep pace with technological advancements will depend on their willingness to embrace change, foster innovation and prioritise customer-centricity,” adds Eric.

In the meantime, Finalyst’s eyes remain focused on its true goal: to continue innovating to meet users’ changing needs and finding better ways to help them reach their financial goals.

“While it is unrealistic to claim that Finalyst alone will solve these issues, our goal is to empower planners and clients to work hand in hand to manage their personal finances. Whether it is breaking free from spiralling debt or building wealth to achieve life goals, the end goal is the same: to enjoy an improved quality of life through financial freedom,” says Casper.

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