Nearly 82% of HNWIs in Asia-Pacific expect most or all of their wealth management relationship to be conducted through digital channels in five years, in contrast to 61% of HNWIs in the rest of the world, according to the Asia-Pacific Wealth Report 2014 released by Capgemini and RBC Wealth Management.
Demand for digital interactions, including through the emerging channels of mobile applications, social media, and video, is high across Asia-Pacific HNWIs of all ages4 and wealth levels.
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The report notes that the stakes are high for firms that do not deliver a sufficient digital experience to the region’s HNWIs: 83 percent of those in Asia-Pacific (excl. Japan) would consider leaving firms that lack an integrated channel experience versus 62 percent of those in the rest of the world.
"The risk of not getting digital right is high for wealth management firms in Asia-Pacific, as its high net worth individuals are distinguishing themselves as more digitally-minded than their peers in the rest of the world," said Jean Lassignardie, Chief Sales and Marketing Officer, Capgemini Global Financial Services.
"Asia-Pacific wealth management firms will need to offer a deep, multi-channel experience that takes into account regional variations in order to meet these high expectations."
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By GlobalDataAlmost three-quarters (73 percent) of Asia-Pacific (excl. Japan) HNWIs considered most or all of their current wealth management relationship to already be digital compared to only 55 percent of those in the rest of the world.
Asia-Pacific is also the only region in the world where HNWIs feel digital contact is more important than direct contact with their wealth managers, offering great opportunities for wealth management firms to better meet HNWI needs through digital channels.
Asia-Pacific (excl. Japan) HNWIs uniquely cite digital contact as more important for every type of interaction with firms, including gathering information, engaging with wealth managers, and executing transactions. In particular, they have the highest preference globally for real-time reporting (45 percent) over scheduled reporting (26 percent), though those in Hong Kong proved an exception, preferring reports on a scheduled basis.
Significant variations in digital infrastructure and HNWI demands across markets
Digital infrastructure, as well as the level of demand for digital services, varies greatly across Asia-Pacific, making it difficult for firms to develop a pan-Asia-Pacific strategy for digital technology and a multi-channel experience.
At the same time, the report profiles the critical importance of offering a multi-channel experience to the region’s HNWIs. Their demands are more complex, requiring capabilities across direct, in-person, and traditional digital channels such as websites, as well as emerging digital channels of mobile applications, social media, and video. Integration of these newer channels is particularly appropriate in the region as mobile usurps broadband capabilities in some areas, social media complements the cultural emphasis on peer feedback, and video consumption surpasses that of Western markets.
"Digital technology offers Asia-Pacific wealth management firms significant opportunities to provide high net worth individuals with an enhanced client experience," said M. George Lewis, Group Head, RBC Wealth Management & RBC Insurance. "While wealth managers remain the centerpoint of the connection high net worth individuals have with their firms, there is no question that digital channels and interactions are becoming an increasingly important element of the client-wealth manager relationship."
Digital also can help firms with automation and compliance
The report emphasizes that digital technology can help firms capitalize on the growth potential of the Asia-Pacific wealth market. On top of enhancing the client experience, digital capabilities also can help firms address varying business challenges: digital automation can reduce operating costs and improve wealth manager productivity, while helping firms achieve scalability. As regulations develop and are implemented in the region, compliance technology can help firms ensure that they are current with evolving requirements.
