Greater focus on high net worth individuals has left many mass affluent clients underserved in Asia by local banks, according to Avaloq’s Gery Dachlan. Some are exploring artificial intelligence as a solution.
The wealth management opportunity in Asia continues to attract banks to expand and capture greater wallet share in a region that is still rapidly generating new riches.
The market has various segments, partly defined by account size due to sophistication and product accessibility, with more emphasis placed on high net worth clients. In contrast, the mass affluent segment is relatively underserved, especially by players based in the region, according to Gery Dachlan, Avaloq’s commercial head for Asia Pacific and the Middle East.
«The affluent segment is definitely growing. Local regional banks have a captive client base and it is underserved,» Dachlan said in an interview with finews.asia.
Limited RMs
There is an industry wide attempt to grow in such markets, primarily by launching major hiring sprees. But one of the top challenges is the overall lack of talent, especially with regards to relationship managers.
As a result, the limited amount of existing relationship managers have to oversee an increasing large number of clients. And any disproportional ratio naturally has a negative impact on service quality.
Artificial Intelligence
In the absence of a significant influx of new talent, banks have to grapple with simultaneously improving efficiency. Technological developments have partly enabled this and some are recently exploring use cases in the trending area of generative artificial intelligence.
Generative AI can be used to power virtual assistants to support relationship managers in certain tasks like basic account opening processes or inquiries about a bank’s house view on a specific market.
«[Generative AI] is definitely an interesting option for banks to further democratize wealth management,» Dachlan underlined.
Market Expansion
Meanwhile, Avaloq continues to grow its business with Asia Pacific as a growth engine. Within the region, the Swiss-based banking software firm is beginning to actively seek opportunities in Vietnam.
Moving forward, Avaloq is also focusing more on expansion into the Middle East, particularly in the UAE, Saudi Arabia, Qatar and Bahrain. Wealth management is becoming a bigger focus area for many banks in the the region, Dachlan added, which is seeing increasing asset inflows.
