Use Case

Real-Time Collections: Breaking new ground for Direct Debit solutions with Collections API

Moomoo Financial Singapore Pte. Ltd., a subsidiary of Nasdaq listed Futu Holdings, entered the Singapore market slightly more than a year ago. Through its expansion in Asia Pacific, they aim to bring a new digital investment experience to local retail investors by making investment tools more accessible for all, with improved processes to match.

Documentation

The challenge

The speed of opening and funding of online trading accounts is increasingly important as investors typically wish to immediately transact to take advantage of market opportunities.

Previously, the direct debit process was manual and paper-intensive, and often took 6 to 12 weeks to complete. Investors also had to log on to multiple platforms to initiate payments to fund their trading accounts on the moomoo app, which were limited to banking hours.

In addition, manual checks and reconciliation of investor details against source of funds significantly slowed down the funding process, leading to increased costs and a suboptimal investor experience.

The solution

Moomoo SG joined forces with HSBC to develop an automated funding process through an end-to-end API integration, which enabled moomoo SG’s investors to submit paperless real-time direct debit mandates online. This has significantly reduced the time taken for fund transfers to be set up, enabling seamless funding of investment accounts once direct debit mandates are approved.

As a result, retail investors can now initiate funding via moomoo app which automatically pulls funds from the mandated bank account through FAST, reducing the average waiting time from 14 days to mere seconds. The solution has also improved straight-through processing rates on these transactions from 40% to 99%, reducing the need for manual reconciliation.

The service is available 24/7, allowing investors to fund and trade on moomoo app on the move.

*Note, instant payments require the debiting bank’s participation in the SG FAST Payments scheme.

“Moomoo believes the access to setup eGIRO will not only benefit our clients and investors but also enhancing Moomoo’s operational efficiency and streamlining our workflow. We wish to extend our appreciation to the HSBC team for their professionalism and effort in helping Futu SG realise real-time collections.”

^{Mr Gavin Chia, Managing Director, Moomoo, Futu Singapore}

Benefits

The automation provided by the real-time direct debit solution has allowed investors to apply funds to their investment accounts in just a matter of minutes, leading to lower costs and greater scalability for moomoo SG’s business.
Instant funding of investment accounts enables the investor to execute trades immediately following account setup, providing a better client experience.
With straight-through processing rates of 99% on transfers to investment accounts, reconciliation is improved while payment errors and rejections are reduced.