Asia’s HNWs call for a banking upgrade

Asia’s emerging wealthy are heralding a new style of digital wealth management for the 21st century, meaning that private banks who get their cyber solutions right could be greatly rewarded as wealth in the region moves from strength to strength.

According to new research from Scorpio Partnership and SunGard Banking, based on the views of 400 high-net-worth individuals (HNWs) and 96 wealth advisers across five Asian markets, wealth management institutions need to rethink their digital offering in order to deliver the type of relationship that these clients are looking for.

Many professionals, concerned that their organisations are lagging behind when it comes to technology, are now starting to take matters into their own hands. A significant proportion are already using mobile devices such as iPads and other tablets for presentations, investment research and portfolio analysis. And they expect this usage to increase by approximately 50 per cent more within a five-year time frame.

One of the most concerning outcomes of this rise in mobile technology is that many advisers are using tools that are not synchronised with corporate systems. As a result, they are urgently pressing their institutions to enhance business intelligence, upgrade CRM systems and refresh risk management software to provide much needed digital tools on an institution-wide basis [Figure 1].

This focus on corporate technologies and digital solutions is clearly a response to the region’s wealthy, who have demonstrated a generous appetite for online client services. This is manifested in the fact that these HNWs spend an average of 5.3 hours every week online in relation to their wealth management, or up to 7.3 hours among wealthier individuals with over $6m (€4.6m). Typically, this time is used to research investments, monitor portfolios and make trades.

For wealth advisers to get up to speed with these digi-literate clients, it will mean moving away from the old fashioned workflow that is currently operational. In an average week, only 20 per cent of time is spent in client meetings or prospecting clients. If phoning clients and a portion of responding to emails are added as ‘virtual’ face time with clients, this figure rises to close but still less than two days per week [Figure 2]. By using the internet as a client engagement tool, advisers would be able to enhance these relationships they are working so hard to deliver.

And, as wealth managers hope to gain their share of the region’s growing wealth, this is going to become an even more pressing issue. Advisers in the region currently have 86 clients each and yet a large majority feel they either have too much work or are working at capacity. Streamlining technology and delivering digital solutions may help wealth professionals to manage more client relationships, hence creating more efficiency.

For wealth advisers in Asia and the firms they work for, the question now is how to create a valued relationship with clients in an increasingly competitive market. Ultimately, many need to evaluate the experience they are giving to clients and assess whether existing business models are going to enable business success. And, with many of Asia’s wealthy pressing for digital wealth management solutions, it will be up to private banks to work out how to use technology as an intrinsic part of the client experience, fully enabled by the firm and delivered by their advisers.

Annie Catchpole is senior associate at wealth management think-tank Scorpio Partnership