Private bank and wealth managers in Asia are increasingly turning to financial technology (fintech) firms to beef up their digital capabilities, which have become more important in the face of challenging markets and regulatory environment.

 

There are four areas where fintech firms are helping tweak businesses for private banks, wealth managers and financial advisers to boost capabilities.

 

One such area is profitability. In practice, managers invest in digital platforms – either created in-house or via licensed third party providers – along with other information technology (IT) resources that enhance economies of scale and provide premium content in the form of statistics and data analytics. The technology allows them to meet the requirements of their clients.

 

Fintechs also help in enhancing connectivity in the global market. IT systems help managers innovate and differentiate themselves from competitors in terms of products and services in a highly-competitive industry.

 

Ensuring they receive the right support for their digital platforms is another area for fintechs. Private banks and wealth managers engage with fintechs that can provide the right technology solutions for their clients.

 

Lastly, fintechs help wealth management clients navigate complex risk and regulatory requirements via digital platforms. Risk and regulation have become too complicated in recent years that utilizing digital tools are recommended whether it’s helping compliance officers sort out new regulations or promoting a compliance culture within the organization.

 

“People with substantial amount of money always want to get some help and advice. For example, relationship managers are using more digital solutions to improve the conversations with their clients, to have more relevant discussions and to have investment outcomes more successful,” says Patrick Donaldson, Head of Wealth Management Solutions, Asean at Thomson Reuters.

 

Although fintech is generally associated with startup companies, well-established technology firms such as Thomson Reuters have also billed themselves as fintech by virtue of their focus on innovation and differentiation.

 

“In this aspect, fintech has become an equalizer among private banks, wealth managers and professional financial advisors since they allow these organizations to engage more often with their clients and address their concerns more immediately,” Donaldson says.

 

One major trend in the digital evolution of the wealth management industry is the adoption by private banks, wealth managers and professional investment advisors of “open platforms” that is making it easier to integrate processes and functions.

 

“The acronym that most people recognize is API (Application Programming Interface), which is generally an open platform that allows businesses to integrate workflows, legacy technology, and some of the fintech solutions that are starting to support the industry,” Donaldson says.

 

“Open platforms are a really big trend that we’re seeing in terms of digital and the different forms of technology to support that whether it is mobile, or data analytics. But digital is a big game-changer in the way that people experience wealth management,” he says.

 

Another major trend is enhancing the customer experience of high net worth investors (HNWIs). By using digital technology, HNWIs can now access information, such as data analytics that were unavailable to them in the past.

 

For example, digital technology now allows any private bank, wealth manager or professional advisor to set up a cost-efficient and secure, customized login website that gives clients access to information, data and investment ideas. At the same time the website can also be used by the private banks, wealth managers or professional advisors for generating data analytics that can help them determine the requirements of their clients.

 

“In this way the clients have a much richer customer experience. Equally, the professional advisors are able to use technology and help enable them to have the right conversation with the right clients at the right time,” Donaldson says.

 

In Asia, the race to go digital in the wealth management industry has begun in earnest driven by the rapid growth in wealth among the region’s HNWIs.

 

Last June 28, Credit Suisse launched its digital private banking services in Hong Kong with the release of an enhanced Private Banking Asia Pacific app. Available to its regional clients, the digital platform creates a new multi-channel service delivery model combining digital and direct client experience, which is expected to become a key driver of business growth. Other banks are rolling out their digital platforms as well.