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Wealth Management & Private Banking

Will fintech replace human touch in Asia’s private banks?

Patrick Donaldson

11 Oct 2017

Photography: Suzanne Plunkett
Photography: Suzanne Plunkett

For all the hype about fintech disrupting wealth management, most private banks in Asia are focusing on marrying digital with the softer, human touch.

Private banks in Asia have no choice other than to take calculated bets on the technology they believe will shape the future for themselves and their clients.

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The amount of investment — and the direction of it — is varying from one institution to the next.

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For most firms, however, their priority needs to be ensuring their service is based on adding value, since this is difficult to replicate.

Furthermore, loyal clients and recurring revenue will offer firms more room and time to maneuver.

These were some of the views of industry leaders in Hong Kong, at a thought-leadership discussion co-hosted by Thomson Reuters and Hubbis.

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Selective tech progress

The area likely to advance the fastest, believe some market practitioners, is regulatory technology.

This will play an important role in helping institutions and advisors deal with the many reports they have to produce, plus the manual nature of many of them.

Another area where big changes are expected for private banking in Asia, driven by technology, is in relation to business process automation.

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Taking the (more extreme) example of the automotive industry, many of the top brands simply make the engine and create the design; everything else is outsourced.

Whether the same happens within wealth management is a possibility, suggest some industry leaders.

While outsourcing might happen in a meaningful but different way, the trend of connectivity won’t go away. Neither will pressure on revenues and margins.

Ultimately, while there is agreement among business leaders on the need for more efficiency, how this comes about is less important.

Personal relationships

Sequentially, marrying digital with the softer, human touch seems to be the most likely way forward for wealth management in Asia.

This is in line with moves to use fin­tech as a staff augmentation exercise, to enhance current capacity via specific tools.

This is a result of the growth also in areas like inter-generational estate and succession planning, for example, where relationship managers need to be embedded in their clients’ lives.

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The value-add to clients is also not only derived from instant access to information, which clearly comes from a better and more relevant digital engagement.

It also comes from referrals and guidance that require personal relationships, for instance about who can give the best advice on a specific matter, and who is trustworthy.

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