IS419: Retail Banking & Mobile Technology
Micro-financing for Millennials
,1. Management Summary
Our team has identified an unmet financial need amongst young adults aged 18 to 35, which we will
term as millennials. Backed by several surveys and studies, millennials face difficulty building up their
financial wealth early due to a lack of knowledge and resources. The Organisation for Economic Co-
operation and Development (OECD) has also flagged out young adults as a financially underserved
market segment (OECD, 2020).
Millennials are also the most active users on e-commerce (Gagua, 2020) and gaming platforms (Statista,
2020). According to research by Newzoo, Singaporeans’ spending on online games reached a total of
$327.2 million in 2019 alone. Singapore also has the fastest growing e-commerce market in Southeast
Asia.
Given the above, our group has thus identified Sea Limited as the organisation that can best provide a
solution to meet this target demographic’s needs. Sea Limited has been shortlisted to bid for the
Monetary Authority of Singapore (MAS) digital banking license. If awarded the license, Sea Limited
would be able to offer microinsurance and micro-investment services to our target demographic. We
plan to facilitate these services through Sea Limited’s subsidiary companies, Shopee (ecommerce
platform) and Garena (game development platform). These platforms allow Sea to reach out to our
target audience who are both online shoppers and gamers.
Our solution, SeaSavings Application, aims to make investing and insurance more affordable and
convenient for millennials by offering them in a micro form, targeting the difficulties they have in
moving towards financial freedom. This application leverages millennials' regular e-commerce and
online game transactions as opportunities to invest or purchase insurance coverage at bite-sized
amounts. When purchasing an item, users have the opportunity to top up an additional $1 or a higher
amount of their choice at checkout to be put into investment or insurance. By offering lower value
investments and insurance at a lower cost, millennials get a chance to learn about investment and slowly
build up their insurance coverage at an affordable price. Moreover, by funding these schemes with a
monetary top-up on their regular purchases, we are also making the process of investing and purchasing
insurance coverage more convenient and flexible for millennials who may not have a steady source of
income to purchase higher value investments or insurances.
1
, 2. Revised Mid Term Summary
We revised our midterm proposal with several changes based on feedback and further research. We
updated our target age group to young adults aged 18 to 35. Within this age group, there are two rather
different customer segments with different needs we intend to reach out to: i) those aged 18 to 25 who
are likely students and are just starting out to learn about managing their personal finances and ii) those
aged 26 to 35 who are likely working young adults with a steady income but may be underserved by
the traditional banks and have unique financing needs such as saving up to buy their first home, hosting
a wedding, or starting a family (Hirschmann, 2020). In addition, we adjusted the interest rate for the
SeaSavings account to a more realistic figure of 0.1% from the previous 3% based on our research of
prevailing interest rates and our cost-benefit analysis (MoneySmart, 2020). Also, instead of rounding
up customer purchases on Shopee or Garena to the nearest dollar and routing the difference of a few
cents into customers’ SeaSavings accounts, we have updated the minimum amount required for
customers to save with us to $1 for convenience and to gather a more realistic and substantial amount
of money in order to invest. Finally, we also decided to increase the onboarding incentive for customers
from $3 to $5 as this amount would likely attract more customers and can be turned into profits over
time.
3. Introduction and Context
Sea Limited was one of the 14 shortlisted applicants bidding for MAS digital banking license. One area
that the company seeks to address is the needs of millennials (Vulcanpost, 2020). Sea is backed by
Tencent, a Chinese multinational technology conglomerate with holdings in various Internet-related
services and products, such as entertainment, artificial intelligence and other technologies.
Sea owns Shopee, a popular e-commerce platform used by both SMEs and millennials as well as
Garena, a game development company in Singapore, which distributes well known multiplayer battle
arena games League of Legends and Heroes of Newearth. Furthermore, Sea also has its own digital
payment and finance platform SeaSavings offering digital services such as e-wallet, payment processing
and microlending.
Today, micro-investments and micro-insurance are gaining momentum. Targeted at millennials or
consumers who have a low risk appetite and/or do not prefer high upfront capital expenditure, they
allow investing with amounts from as low as $0.30 to $1 and insurance coverage at bite-sized premiums.
Sea can leverage on its subsidiaries, Shopee and Garena to reach out to this market.
2
Micro-financing for Millennials
,1. Management Summary
Our team has identified an unmet financial need amongst young adults aged 18 to 35, which we will
term as millennials. Backed by several surveys and studies, millennials face difficulty building up their
financial wealth early due to a lack of knowledge and resources. The Organisation for Economic Co-
operation and Development (OECD) has also flagged out young adults as a financially underserved
market segment (OECD, 2020).
Millennials are also the most active users on e-commerce (Gagua, 2020) and gaming platforms (Statista,
2020). According to research by Newzoo, Singaporeans’ spending on online games reached a total of
$327.2 million in 2019 alone. Singapore also has the fastest growing e-commerce market in Southeast
Asia.
Given the above, our group has thus identified Sea Limited as the organisation that can best provide a
solution to meet this target demographic’s needs. Sea Limited has been shortlisted to bid for the
Monetary Authority of Singapore (MAS) digital banking license. If awarded the license, Sea Limited
would be able to offer microinsurance and micro-investment services to our target demographic. We
plan to facilitate these services through Sea Limited’s subsidiary companies, Shopee (ecommerce
platform) and Garena (game development platform). These platforms allow Sea to reach out to our
target audience who are both online shoppers and gamers.
Our solution, SeaSavings Application, aims to make investing and insurance more affordable and
convenient for millennials by offering them in a micro form, targeting the difficulties they have in
moving towards financial freedom. This application leverages millennials' regular e-commerce and
online game transactions as opportunities to invest or purchase insurance coverage at bite-sized
amounts. When purchasing an item, users have the opportunity to top up an additional $1 or a higher
amount of their choice at checkout to be put into investment or insurance. By offering lower value
investments and insurance at a lower cost, millennials get a chance to learn about investment and slowly
build up their insurance coverage at an affordable price. Moreover, by funding these schemes with a
monetary top-up on their regular purchases, we are also making the process of investing and purchasing
insurance coverage more convenient and flexible for millennials who may not have a steady source of
income to purchase higher value investments or insurances.
1
, 2. Revised Mid Term Summary
We revised our midterm proposal with several changes based on feedback and further research. We
updated our target age group to young adults aged 18 to 35. Within this age group, there are two rather
different customer segments with different needs we intend to reach out to: i) those aged 18 to 25 who
are likely students and are just starting out to learn about managing their personal finances and ii) those
aged 26 to 35 who are likely working young adults with a steady income but may be underserved by
the traditional banks and have unique financing needs such as saving up to buy their first home, hosting
a wedding, or starting a family (Hirschmann, 2020). In addition, we adjusted the interest rate for the
SeaSavings account to a more realistic figure of 0.1% from the previous 3% based on our research of
prevailing interest rates and our cost-benefit analysis (MoneySmart, 2020). Also, instead of rounding
up customer purchases on Shopee or Garena to the nearest dollar and routing the difference of a few
cents into customers’ SeaSavings accounts, we have updated the minimum amount required for
customers to save with us to $1 for convenience and to gather a more realistic and substantial amount
of money in order to invest. Finally, we also decided to increase the onboarding incentive for customers
from $3 to $5 as this amount would likely attract more customers and can be turned into profits over
time.
3. Introduction and Context
Sea Limited was one of the 14 shortlisted applicants bidding for MAS digital banking license. One area
that the company seeks to address is the needs of millennials (Vulcanpost, 2020). Sea is backed by
Tencent, a Chinese multinational technology conglomerate with holdings in various Internet-related
services and products, such as entertainment, artificial intelligence and other technologies.
Sea owns Shopee, a popular e-commerce platform used by both SMEs and millennials as well as
Garena, a game development company in Singapore, which distributes well known multiplayer battle
arena games League of Legends and Heroes of Newearth. Furthermore, Sea also has its own digital
payment and finance platform SeaSavings offering digital services such as e-wallet, payment processing
and microlending.
Today, micro-investments and micro-insurance are gaining momentum. Targeted at millennials or
consumers who have a low risk appetite and/or do not prefer high upfront capital expenditure, they
allow investing with amounts from as low as $0.30 to $1 and insurance coverage at bite-sized premiums.
Sea can leverage on its subsidiaries, Shopee and Garena to reach out to this market.
2
