Wealth management in Asia is poised for a wave of digitalization. How can firms equip themselves? finews.asia spoke to Liew Nam Soon, managing partner for ASEAN financial services at EY.
Liew Nam Soon, wealth management has a lot to do with personal advice, yet digitalization is helping banks to industrialize their processes. How can these two contrary themes be reconciled?
The concept of industrialzation isn’t new and the primary goal is to reduce operational costs, enhance sustainability, achieve more efficient straight-through-processing while remaining responsive toward regulatory requirements and innovating to better serve the needs of customers while keeping costs manageable.
Digitalization on the other hand is also to make banking processes like onboarding and advisory more differentiated, efficient and cost effective. With digitalization, banks can also better manage and work with client data, thus providing for as much of an individualized offering as possible.
The move towards digitalization will enable banks to offer more personalized advice. It should be more of a question of how banks can improve the quality of their service and offerings by leveraging the technological enablements that digitalization brings, such as robo advice capabilities and online communication tools combined with data mining capabilities available to better offer a more dedicated and customized advice on their clients‘ portfolios.
Where does EY’s digital expertise come from?
We place a lot of value and time in hiring and grooming some of the best people who are experienced in financial services. They have a deep understanding of how the industry works and what clients need.
Collectively, they build a strong talent pool for EY as they bring about solid, practical experience onto client projects and are able to engage in meaningful conversations and provide valuable advice to clients as and when needed.
«We helped to develop a digital private banking platform for a major bank»
We have built strong wealth management capabilities in Singapore, Hong Kong, London, New York and Zurich. We also work with other firms, including reputable and leading banking software providers.
What projects are EY working on now?
Wealth management has grown considerably more expensive in Asia in recent years, and cost-income ratios have risen. This is caused by higher demands from clients and regulators as well as stricter risk management, and technology spend more generally. Against this backdrop, many banks have to lower their spending – be it in human resources, information technology or operations.
This is where we come in to streamline and help them look at their processes and systems, whether they are maximizing their existing capabilities, what can be outsourced to better manage costs etc.
«Managing and analyzing client data and information digitally will be decisive»
We’re very involved in the automation of processes. We recently helped to develop a digital private banking platform for a major bank. We’re also working on investment suitability processes for several firms and helping to implement efficiency measures for back- and middle-offices to reduce costs and implement new innnovative operating models.
Digitalization is happening in the business with consumers (B2C) as well as with other businesses (B2B). Where are the differences?
It’s mostly about user experience in B2C, and about giving the client as positive of an experience with the services of a bank as possible. The various fintech projects that are currently sprouting up really help this user experience.
In B2B, it’s more about efficiency gains, like how can we use new technologies like Blockchain, robo advice, P2P lending etc to simplify and accelerate processes, like in clearing and settling.
How do you see the further development of digitalization in wealth management in Asia and what is EY doing in this space?
The bar is high: it’s not just about better managing costs and finding efficiencies, but also about the opportunities for a financial firm to differentiate itself from the competition. Managing and analyzing client data and information digitally will be decisive in offering individualized products and services.
We see more opportunities for collaboration between data analytics firms and wealth management firms to derive actionable insights to better serve their customers.
«We’re already focusing on employees who have practical banking experience»
For EY, this means growing our talent pool, building out our staff and hiring only the best in the industry. Our sector (consulting) is going to grow enormously, and we’re already focusing on employees who have practical banking experience in various Asian wealth management markets and who understand the value of data-driven business decisions.
Why is practical experience so important?
In countries like Hong Kong and Singapore, regions like Europe and the U.S. have had quite a bit of influence on the business culture, which means that specialists from around the world can work in the two markets quite seamlessly. That’s not necessarily the case in other Asian countries like China, where strong local knowledge is required, especially in private banking.
«For EY, this means that local expertise is needed even more»
You can see very well in China how western – American or European – wealth management concepts aren’t gaining as much traction as they did in Singapore and Hong Kong. This is more because of a difference in customer buying patterns and expectations, which translates to slightly different user journeys and expectations towards a heavily personalized offering.
For EY, this means that a strong understanding of local nuances and culture is even more important. The definition of wealth management will also change as new client segments such as affluent millennials emerge and the service offerings have to be further tailored and differentiated to meet their needs.
This means that the banks will need to work even more closely with partners specialized in other areas to improve their offerings to help the clients meet their financial objectives.
Liew Nam Soon has 24 years of consulting and industry experience. He has worked in industries including retail, private and investment banking, asset management, corporate banking, life insurance and private equity. Prior to joining EY, he was the Chief Transformation Officer of a global insurer and a partner with the global business services unit of IBM. He was also previously a partner with PwC and started his career with Andersen Consulting.
Nam Soon graduated with an MBA from Imperial College, London, and a Honors in Bachelor of Engineering from Nanyang Technological University of Singapore.
