COMPETITION has become keener for financial comparison sites with three new ones launched in Singapore in the last five months, reflecting the business potential for such sites.
The three - SingSaver, compareFIRST and GET.com - analyse and provide comparisons for a range of products including credit cards and life insurance policies.
They are among six of the more active sites in Singapore which have collectively raked in more than US$52 million in venture capital funding since 2009.
Typically, financial comparison sites earn from partnerships with financial institutions, successful referral sign-ups for credit cards or home loans, or advertising.
Asked just how profitable the industry is, an unnamed co-founder of one Singapore-based site told BT: "We'd prefer not to share our transaction or revenue numbers because we don't want more competition."
iMoney, for one thing, generates nearly two million unique visitors a month across Singapore, Malaysia, Indonesia and the Philippines, while GET.com, a homegrown site which debuted in the US in 2011, has since seen over 200,000 Americans signed up for just credit cards through its platform.
iMoney is also backed by US$6.5 million in venture capital from investors such as Jungle Ventures and 500 Startups, while CompareAsiaGroup, the parent company of new local player SingSaver, has raised US$46 million in funding to-date.
"As consumers become increasingly tech-savvy and comfortable with going online to seek simple, fast and convenient solutions for their lifestyle needs, this spurs demand for online service providers," said Grace Cheng, co-founder of GET.com, which launched in Singapore in February this year.
SingSaver added that such sites are a customer empowerment platform. Said its managing director Rohith Murthy: "The main challenge is to deliver on what consumers need - unbiased, up-to-date information about financial products and services at their fingertips - thereby saving them time and money."
Asked why it took the region this long to adopt something the Western world has been doing for more than a decade, MoneySmart said Asia has historically been slower to adopt technology in the financial space, especially where most of the older generation prefer to talk to a banker or an insurance agent.
But MoneySmart founder Vinod Nair noted that the gap has been closing in recent years, what with the mobile generation preferring to transact online because of transparency, speed and convenience.
"Financial institutions in Asia have also been slow to adopt technology: it's only in the past 2.5 years that we've seen banks start to offer online applications for credit cards or loans. Before that, applicants had to fill out a physical form and send it to the bank," Mr Nair said.
Today, a broader suite of personal finance products have emerged online: from credit cards and loans to deposits and insurance.
Of these, credit products such as credit cards, personal and home loans are among the most popular for comparison, said Lee Ching Wei, founder of iMoney.
Currently, such platforms are not regulated here, unlike in the US where sites must declare who their affiliate partners are, how they rate cards and whether they accept advertising - practices GET.com has adopted for Singapore, said Ms Cheng.
"The barriers to entry are low but at the end of the day, the most consistent in dedicating their services to the public will outlive the rest. We definitely expect more competition in the future," said Poh Yong Ming, director of five-year-old Moneyline.SG.
Tan Kin Lian, president of the Financial Services Consumer Association, said while he hopes to see more consumers make use of these sites, they need to know how to use the information - either on their own or with the help of fee-based advisers - and to discount information that may be biased.
To do this, he said consumers can refer to two or more sites, or verify life insurance information, for instance, against new portal compareFIRST, a non-profit site created by the Monetary Authority of Singapore, Consumers Association of Singapore (Case), Life Insurance Association Singapore and MoneySENSE.
Jeremy Goh, programme director for the Citi-Singapore Management University Financial Literacy Programme, agreed: "If a site is maintained by a non-profit independent entity, then one can expect fewer biases. If not, it may be a form of advertising for the company."
He cautioned that comparison sites may over-simplify the problem at hand. "Some decisions, say, refinancing your home loan, can be quite complicated with many assumptions made on events that may or may not happen in the future. It may be too challenging to cover all angles pertaining to such decisions on a site."
So far, no complaints have been flagged against such sites, at least not to Case in the last three years, said Case executive director Seah Seng Choon. He also lauded such sites for pushing businesses to be more cost-competitive so that they are able to compete better, which in turn will generate more competitive pricing for consumers.
Mr Seah said: "Uncompetitive products will find it hard to sell in such situations. Notably, the compareFIRST site has already shown that financial institutions will adjust their prices to remain competitive."
With additional reporting by Fiona Lam