Is the threat of a digital takeover in fund distribution over-hyped? Banks are holding firm against the offensive.
Banks look set to continue as the main distributors of mutual funds in Asia, at least in the short-to-medium term. Alternative methods of fund distribution are failing to break the dominance of banks in Asia says global research and consulting firm Cerulli Associates in its latest report.
Regulatory initiatives to diversify the distribution landscape have begun but are in the initial stages. For instance, Hong Kong's Securities and Futures Commission released a consultation paper in May 2017 on online distribution and advisory platforms.
Millennial Moves
Driven by increasingly tech-savvy investors fund managers are diversifying distribution channels, especially in China and India, where investors have embraced digital distribution methods.
Cerulli's report argues that Robo advisors and online fund supermarkets have yet to carve out significant marketshare or scale in Asia but cannot be ignored in reaching out to the tech-savvy Millennial segment. What could provide support to these platforms is a regulatory push to reduce costs and an increasing focus on digital distribution, the report concludes.
