Digital Wealth Management Fit For "The Asian Century"
This is not your mother and father’s asset management.
According to the IMF, Asia will drive approximately 60% of global GDP growth in 2024, which is why the 21st century will be “The Asian Century.”
Along with this growth, Asians are becoming increasingly wealthy, which makes them both a target and a challenge for asset managers, as this report nicely shows.
Asia is also famous for being the home of digital natives, who, with digital wallets in hand, expect a level of digitization that goes beyond most found in the West.
👉TAKEAWAYS
🔹 To understand the scale of the market in Asia, look to China:
“The Chinese Mainland alone makes up about a quarter of the world’s mass affluent, significantly ahead of the next three developed countries: Japan, South Korea, and Australia, which only make up over a tenth of this investor segment globally”
🔹 Asia contains roughly 45% of the entire world’s mass affluent (wealth between $100 and 1m) (See below)
🔹 These mass affluent are incumbent banks’ clients to lose as they have inferior digital offerings and limited product ranges.
🔹 Clients are willing to move: “It is estimated that in Asia Pacific, between 30% and 60% of a rapidly expanding wealthy class plan to shift 30% or more of their wealth to a different manager.”
🔹 Meanwhile, APAC is also the home of some of the world’s largest digital banks, a market estimated to reach USD 2.37bn in 2026, up from USD 0.75bn in 2018. Their wealth management sectors are also hammering incumbents to the benefit of most investors.
🔹 Western asset managers are finding that “being digital” isn’t enough. Useability, interaction, and a host of other factors are needed to succeed.
🔹 This is why Western asset managers are engaging in local partnerships:
“Franklin Templeton and Finnomena Funds as well as Schroders and Robowealth in Thailand, Value Partners with Wahed in Malaysia, PIMCO and Syfe; BlackRock and Stashaway; and Amundi and Endowus in Singapore, and, until late 2023 at least, Vanguard with Ant”
👊STRAIGHT TALK👊
This is not your mother and father’s asset management.
Asia has an explosive combination of new wealth, digital wallets and digital platforms that challenge the Western asset management approach.
It is so different and fast-paced that Western companies have no choice but to partner with local digital players. They simply can’t get traction on the ground without them.
Meanwhile, local incumbent banks’ are also challenged as their “premier” wealth services largely go unused as clients shift to digital asset managers.
I see this firsthand in Shanghai, where I see advertisements for digital wealth management, as I do in every Asian city I visit. My favorite was Bangkok, where a wealth management advertisement covered an entire MRT train!
Watch Asia’s wealth management it’s going places you’ve never seen before!
What do you think?
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