Wealth managers are dangerously outdated, and wealthy Asian clients are not pleased

Just 25% of private banks have proper digital channels.

For wealth managers, it’s either go digital or go extinct. A new report by PwC showed that ultra-wealthy Asian clients are not thrilled at how outdated their private bankers are, and firms that don’t boost their digital offerings now simply do not stand a chance of long-term survival.

The report showed that globally, only a quarter of wealth managers offer digital channels beyond e-mail. In contrast, 40% of Asia-Pacific respondents use online means to review their portfolio or investment markets, while over 33% globally are already using online services for portfolio management.

Meanwhile, 62% of Asian high net worth individuals (HNWIs) believe it is important for their financial advisor or wealth manager to have a strong digital offering – a proportion that
rises to almost two-thirds (64%) among HNWIs under 45 and in Asia.

Yet, players in the wealth management sector seem to be oblivious to their technology inadequacies, some even overestimating their firm’s digital capability, rating it digitally sophisticated, when the only service offered to clients is a website.

Perhaps not surprisingly, globally two-thirds of wealth relationship managers do not consider robo-advisors a threat to their business. Moreover, they repeatedly insist clients do not want digital functionality, directly contradicting the importance their clients place on it.

“Much of the broader industry remains in its infancy in the adoption of digital technology in particular in the context of front to back digital enablement of the business, but the good news is that there is now an accepted view by wealth management players that they cannot afford to miss the boat on this, and we have seen increased investment budgets and spend to address this gap," said Julia Leong, Private Banking leader at PwC Singapore.