Hong Kong Outpaces Singapore in Wealth Tech Adoption
While both Hong Kong and Singapore are increasingly embracing digital channels for wealth management, the former hub is in the lead, according to a report by Quinlan & Associates and Allfunds.
Amongst individuals with a minimum of $100,000 in investable assets, more Hongkongers have accessed wealth management services through digital channels in the past two years compared to Singaporeans at 93 percent and 85 percent, respectively. This was according to a report by Quinlan & Associates and Allfunds titled «Rich Pickings: Unpacking the WealthTech Revolution in Hong Kong and Singapore».
The gap between the two hubs widens further when it comes to the adoption of specific tech capabilities. 74 percent of Hong Kong investors use a robo-advisor, compared to 59 percent in Singapore. 52 percent of Hongkongers are comfortable with artificial intelligence, nearly doubling Singapore’s 27 percent.
Digital Disruptors
Regardless of the adoption rate, both major Asian financial hubs are trending towards digital embracement with emerging disruptors gaining increasing market share. Players named in the report include robo-advisors like Endowus and StashAway, and digital brokers like Futu and Tiger Brokers.
«Digital-native disruptors, such as independent robo-advisors and neobrokers, are showcasing remarkable growth, driven by the strong service propositions relative to more traditional peers,» commented Benjamin Quinlan, CEO and managing partner of Quinlan & Associates.
Traditional Finance Responds
In response, traditional financial institutions are responding by enhancing their capabilities with a focus on areas such as digital onboarding, robo-advisory, self-directed investments, digital wealth portals and enhancement tools for relationship managers (RM).
In Hong Kong, 75 percent of financial institutions named RM enablement as an objective compared to 57 percent who named direct-to-consumer platforms as their goal. In Singapore, the two areas reached parity at 68 percent each.
Build or Buy?
In terms of sourcing such tech solutions, traditional financial institutions are opting to take a hybrid approach of both in-house development and outsourcing.
On the latter, there are two broad types of vendors: technology companies that offer standalone tech solutions and financial institutions that provide white-labeled solutions layered on top of their core offerings. The most typical capabilities being considered are digital wealth tools across client engagement, investment advisory, and operations & administration as well as financial product access.
«Looking ahead, we expect increased collaboration between financial institutions and WealthTech solution providers to fully capture the opportunities ahead,» said Max Toh, head of digital wealth solutions (Asia) at Allfunds.
