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StashAway Brings Data-Driven Wealth Management to Thousands of New Clients with Seamless Scalability from Lightbend

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The Need

For millions of people around the world, wealth management plays a critical role in securing a comfortable retirement—but many retail banks offer only one-size-fits-all investment products with relatively high and often non-transparent account management costs.

Recognizing a major gap in the global investment marketplace, StashAway aimed to build a wealth management offering that connects consumers and professional investors alike with transparent, cost-efficient trading services, backed by a top-tier user experience online and on mobile.

Crucially, StashAway targeted an innovative approach to investing that took full advantage of the latest advances in robo-advisory technology: a field that is projected to hit US$460 billion by 2022. By leveraging intelligent automation, the company could keep the cost of its offering lean, while ensuring high levels of accuracy, ultra-responsive customer services, and a complete audit trail for every trade.

Nino Ulsamer, Co-Founder and Chief Technology Officer at StashAway, explains: “Many long-term research projects have clearly demonstrated that asset allocation is the key driver of portfolio performance—sometimes delivering as much as 96% of the total value. By building on this work and the Nobel Prize-winning Modern Portfolio Theory, we realized that we could harness macroeconomic data to minimize risk and maximize returns, regardless of the ups and downs of the broader economic cycle. The name of this offering is Economic Regime-based Asset Allocation (ERAA®): a game-changing solution for the global investment community.”

The Challenge

To bring its offering to life, StashAway targeted a way to aggregate thousands of individual customer trades into one, and then to immediately distribute the share units and funds back to each customer as soon as the trade is executed and settled.

StashAway's capital markets license requires the company to carry out these settlement processes on time, every time, as defined by the rules of the Monetary Authority of Singapore and the respective regulatory entities in the other markets in which the company operates. The penalties for non- adherence to these rules are severe: from fines to the suspension of operations or even the complete revocation of the company's license to conduct business. As StashAway began to develop ERAA, it recognized that its choice of technology platform had the potential to make or break its bold vision for industry disruption.

“We quickly realized that event sourcing is the only truly reliable way to guarantee transactions, so that we have iron-clad confidence that customers will always be successfully assigned their respective share of a trade, and that both their holding balance of the security—i.e., the ledger—and their account cash balance—i.e., the result of the trade—will be updated at the same time,” explains Nino Ulsamer.

The Solution

To deliver mission-critical event sourcing capabilities for its newly formed business, StashAway selected Akka Platform from Lightbend to power its core trading system. The Akka Platform environment at StashAway supports almost every aspect of the financial transaction lifecycle, including bank statements, rebalancing of portfolios, re-optimizing target allocations across economic regimes, as well as order execution, fee charging, and more.

“The accuracy and correctness of transaction data of our customers is of paramount importance,” says Nino Ulsamer. “Blocking transactions and tightly coupled, monolithic design would throw bottlenecks into our complex system of workflows, which are based on multiple microservices running in Docker containers on Kubernetes. While we initially considered building an event sourcing capability ourselves, we knew that it wouldn’t be straightforward to achieve. By partnering with Lightbend, we gain peace of mind that we have the scalability, resilience and reliability to deliver mission-critical event-sourcing capabilities for our core trading system 24/7.”

StashAway uses Akka Platform to guarantee message delivery at scale, using event sourcing to operate its own omnibus accounts that hold the ledger for its customers. The native event-sourcing features of Akka are vital to maintain an accurate audit trail for every transaction, while effectively managing the complexity of the event processing involved in guaranteeing transactional correctness.

The Results

Since partnering with Lightbend, StashAway has grown its business from strength to strength: from a start-up enterprise to a leading player in the global wealth management space. The scalability of Akka Platform has been a key enabler, allowing the company to expand rapidly from 100,000 trades per day valued at US$4 million to 200,000 daily trades of more than US$15 million just one year later—a four-fold year-on-year increase.

“We recently hit a major milestone of more than US$1 billion in total assets under management, and Akka Platform made an important contribution to that achievement,” states Nino Ulsamer. “In just a single quarter, we now process around 1.3 million dividends, 6.8 million client orders and 400,000 bank transaction records. Without a dependable event sourcing capability like the one we have from Lightbend, none of these successes would be possible.”

Since the launch of its first offering, ERAA, StashAway has expanded its service portfolio to include a wide range of new options for investors around the world. As more and more people learn about the benefits of StashAway's investment approach, its volumes continue to grow—and the partnership with Lightbend is empowering the company to meet these challenges head on.

“With Akka Platform, it's clear how to scale our environment, so we're confident it's still the right platform for us,” says Nino Ulsamer. “We continue to grow a lot in terms of transactional volumes, and the solution easily copes with the load.”

Looking to the future, StashAway is confident it has found the optimal technology platform to continue its fast-paced business growth.

“Despite the fact that our environment has significantly increased in size, we've yet to experience a technical issue with Akka Platform that we couldn't get to the bottom of in less than an hour,” concludes Nino Ulsamer. “Although our engineering team has grown substantially over the last 12 months, our Akka Platform team has remained almost flat—a testament to the efficiency of the Lightbend technology. For core financial transactional systems where data quality and consistency are paramount, we strongly recommend Akka Platform.”

Founded in 2016 in Singapore, StashAway is a digital wealth management platform for retail customers and accredited investors. Using its proprietary investment framework ERAA (Economic Regime-based Asset Allocation), StashAway intelligently navigates macroeconomic data to deliver superior returns while maintaining a predefined risk exposure for customers. With retail fund management licenses in Singapore, Malaysia, the United Arab Emirates, and Hong Kong, StashAway has more than US$1 billion in assets under management as of January 2021. The company is also on track to launch its service offering in Thailand later in the year.

 

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