Developing efficient digital capabilities to cater to mass markets.
Both traditional Asian banks and top foreign banks in the Asia Pacific region are experiencing growing competition from two types of technologically advanced players.
One is the emerging WealthTech firms that are developing advanced B2B and B2C digital solutions, while the other is the Challenger banks —virtual banks and payments firms (especially arms of tech giants) —that have started acquiring financial services licences to capitalise on their wide customer base.
Asia Pacific is emerging as the leading destination for wealth management and private banking globally, driven by the growing wealth in the region. The relaxed and pro-investment regulatory environments in markets such as Singapore and Hong Kong have been attracting a large amount of capital from around the world.
In KPMG’s recently released Digital Wealth Management in Asia Pacific report, the professional services group states wealth Asian customers are looking for highly personalised advisory solutions from technologically sound advisors to help plan their family wealth and succession. The number of affluent clients is also growing.
They demand advanced platforms and features to effectively manage their wealth on their own. As digitalisation has reduced client retention costs and improved access to their capital. Clients with small investment capital, who have never been considered incredibly important by wealth managers, now collectively form a key potential market — particularly in mainland China where the middle-class population represents more than half of the market’s online wealth management clients.
As a result, a growing number of financial institutions have widened their target customer groups and increased focus on developing efficient digital capabilities to cater to mass markets. In relation to mobile access to financial services, the race is on to provide customers with the best “bank-in-a-pocket” service.
This race has been joined not just by traditional and neobanks, but also by megatech and telecommunications companies with ambitions to widen their market presence throughout Asia Pacific. This move toward digitalisation has further picked up pace post the COVID-19 pandemic. According to KPMG’s 2020 CEO Outlook Survey, 81 percent of CEOs in the Financial Services (FS) sector feel that COVID-19 has accelerated digitisation of operations and creation of next-generation operating models, while 76 percent feel that it has accelerated the creation of new digital business models.
This report aims to highlight all opportunities that Asia Pacific presents for the players operating in the wealth management sector, particularly with respect to their digital capabilities.
For the leading global banks, it shows a wide range of prospects to further grow their wealth management services in this region, be it through strengthening their teams of advisors, developing sophisticated digital capabilities, or even partnering with local payments firms to reach the masses.