Despite a gargantuan market of tech-savvy wealth clients in Asia, only a few universal banks are sufficiently equipped to dominate the industry, according to a KPMG report, creating opportunities for other players like local lenders and payment firms.
The ongoing health crisis has lent momentum to digital adoption worldwide as travel bans and social distancing measures have boosted demand for mobile and contactless solutions. But supply has not caught up, according to a recent wealth management report by KPMG.
«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,» said Larry Campbell, partner and head of financial services strategy for KPMG Asia Pacific.
«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 Management Challengers
In addition to local lenders, global banks face major competition from the emergence of fintech players, most notably payment firms which have plans to grow in the region by leveraging their e-wallet penetration to channel savings into wealth management investments.
«Rapidly growing 'WealthTech' players are either developing advanced wealth management platforms and intuitive advisory solutions for their partnerships with big banks or using their low-cost structure to directly tap the middle class population,» said Bonn Liu, partner and APAC head of asset management for KPMG China.
Advantage Secure For Now
Still, KPMG said that universal banks retain their competitive edge for now, especially those in Hong Kong and mainland China due to their strong technology platforms. But in order to maintain this advantage, more needs to be done.
«Universal banks need the vision and will to invest in [artificial intelligence] and big data, step up the pace of digital transformation and be open to strategic partnerships,» Campbell explained, underlining the continued value of human touch.
«Those that are prepared to also pay top dollar for empathetic, informed and broad-minded relationship managers whose connectivity with customer needs and challenges can be bolstered by technology can provide clients with a wealth management experience that truly delights.»
Asia Opportunity
Within the region, KPMG named four key markets with the greatest wealth management opportunities. They include mainland China and India, for their growing affluent and middle class populations, alongside Hong Kong and Singapore for the maturity and regulatory support.
On Hong Kong, the report also highlighted opportunities to tap into the Greater Bay Area (GBA) with 64 percent of financial institutions in the city already equipped or planning to develop a specific strategy and operations for the market.
The report also named Vietnam as an attractive market due to the rapid growth of its ultra-high net worth individuals and government promotion of fintech and non-cash payments.
