By: 7 March 2024

How technology is reshaping wealth management services in Asia

Tech boom fuels wealth wave in Asia

As the world gets richer the number of people looking for wealth management services is increasing. This is sparking a race among financial institutions, both legacy banks and fintechs, to capitalise on the potential profits.  

An increase in the use of technology, which improves efficiency and reduces costs, has made these services more accessible for clients and profitable for companies.  

Bain, a consultancy firm, predicts that demand for wealth management services will double to more than $500bn by 2030. And 250 million Generation Y and Z customers will have an annual income exceeding $100,000 by the same year. 

Asia is emerging as a significant region, with a forecasted annual increase in financial assets of 7.8% until 2027, outpacing the global average of 5.3%. The Boston Consultancy Group also predicts Hong Kong to overtake Switzerland as the largest financial hub by 2025.  

Technology key driver in this growth 

New technology is helping to streamline and automate processes, reduce costs and expand the client base. This allows both fintechs and banks to cater to clients with a substantial income that may not be classified as ultra-wealthy. 

Technology will allow companies to increase the ratio of clients per advisor, driving greater returns at scale. Bain & Company estimates a 35% higher return with digitally enabled wealth management models compared to traditional models.  

While domestic banks, and the likes of The Bank of Singapore and DBS, currently dominate wealth management in Asia, technology is empowering wealthtechs to compete on a larger scale. AI can be used to help wealth managers advise clients, summarise information, automate tasks and save valuable time.  

Companies like Syfe, a Singapore-based investment tech, exemplify this approach. Established in 2019, the company offers a unified platform for comprehensive financial management and attracts working professionals with decent incomes and significant savings. 

Consumers increased access to information and technology, through platforms like TikTok, poses a unique challenge and opportunity for financial institutions. Wealthtechs must tailor their offerings to this young, affluent clientele, providing both digital tools and a human touch for difficult decisions.  

Wealthier population 

This growth is further fuelled by the rising number of wealthy individuals in Asia. As economies in countries like India, the Philippines and Vietnam grow, and the middle class expands with it, there is a burgeoning demand for more wealth products and investment planning.  

At the top end of this growth, the number of millionaires in Asia is set to double by the end of the decade to more than 76 million. Singapore is poised to become the millionaire capital of the world, with 13.4% of the population projected to boast millionaire status by 2030. 

Scale will dominate 

Liquid assets from all global investors are projected to increase by $90trn, from 2021 to 2030. Of that number, $40trn will come from individuals who have assets between $100,000 and $1m. A large proportion of those investors will come from the Asia-Pacific region. 

The Asian market’s growth trajectory, fuelled by its massive population (4.5 billion) and increasing wealth, promises prosperity for wealthtechs and financial institutions that can scale to meet the evolving needs of this dynamic market.  

Image: Canva  

Josh Poyser
Josh Poyser is an editor at FinTech Intel. He has written about fintech for several years and appeared at FinTech Connect 2023 on the 'Unlocking Success: The Art of Fintech PR' panel.