KPMG: Digital adoption key to APAC wealth management
According to recent analysis by KPMG, the Asia Pacific region is becoming a leading destination for wealth management and private banking, thanks to digital delivery of sophisticated products and services across the region.
One of the main factors driving this is the influence of wealthy mainland China outbound clients, as well as increased access to mobile technology.
The Digital Wealth Management in Asia Pacific report identifies Hong Kong and Singapore as the most supportive and developed markets for wealth management in the region, with significant growth opportunities in mainland China and India.
“There is a clear gap in Asia for a powerful, compelling, sophisticated-yet-easy-to-use digital wealth management offering aimed at the region's emerging and growing wealthy,” says Larry Campbell, Partner, Head of Financial Services Strategy, KPMG Asia Pacific.
“In individual domestic markets, some local banks put in a good showing, as do a handful of WealthTechs. In the region as a whole, only a couple of universal banks appear to have the product shelf and economic clout to truly dominate. Wealth transference across generations is only really occurring in some markets, such as Hong Kong. Others will follow as people in these other markets age and the markets themselves mature.”
The Covid-19 pandemic pushed many wealth management clients online for remote interaction, which proved particularly appealing to Hong Kong’s affluent segment of younger, tech-savvy clients.
Wealth managers in the report highlighted 'holistic digital ecosystem/ multi-channel delivery', 'self-service investment platforms' and 'instant messaging apps' are the top three capabilities to attract this younger generation.
Simon Gleave, Partner, Head of Financial Services, Asia Pacific, KPMG China, says global and regional institutions are attracted to the fast-growing market in the region.
“The pro-investment regulatory environments in markets such as Hong Kong and Singapore have been attracting a large amount of individual wealth and corporate capital from around the world,” says Gleave.
“As a result, most of the top traditional banks are expanding their presence in the region, while the stronger Asian banks are working on developing their wealth management businesses in these markets.”
The report highlights Hong Kong’s sophisticated IT infrastructure playing a significant part in Hong Kong’s leading banks spearheading a wave of technological enhancements, including WealthTech growth, high offshore wealth management demand, virtual banking, cross-border collaborations and new payment mechanisms.
Nancy Yeung, Partner, Wealth and Personal Banking, and Operations, KPMG China, says: "To tackle the intense competition in the Asian wealth management market, banks must focus on technologies offering efficient online solutions to mass affluent clients, augment their succession planning services to HNWI families, accelerate digital adoption, with an increased focus on leveraging Big Data analytics, partner with more fintechs for advanced solutions, including quicker digital onboarding, strengthen the digital capabilities of their advisors and probably form their own virtual banks."