The Greater China area is experiencing massive growth across all segments of its investing population. Mainland China, Hong Kong and Taiwan each have distinct differences and unique characteristics. But technology is changing the game so that investors in all areas and from all wealth segments are able to access a good range of investments and enjoy tech-empowered processes.

Those with over US$50 million in investable assets are Ultra-High-Net-Worth Individuals UHNWIs. They tend to have single-family offices (SFO) or multi-family offices (MFO) as their primary investment/execution/custody platforms. Traditionally, they have tended to invest in real estate but are now coming much more to the fore when it comes to having diversified investments and asset classes.

Wealth managers and family offices have been relatively quick on the uptake when it comes to meeting the needs of these investors and using technology to provide a service. Typically, they have made a tech stack using single functionality modules that can be bought and implemented relatively quickly to react to ever-changing client demand.

Of note is the recent uptick in interest in private markets and the need for accessibility. Wealth managers are now commonly using iCapital and Altive - centralised investment matchmakers that try to broker private market investments in a way similar to how over-the-counter (OTC) markets are organised.

Meanwhile, those with between US$5 million and US$20 million in investable wealth – the High-Net-Worth (HNW) community – generally do not have the means to have MFO or SFO and thus their main investment platform is the private banks. The banks have worked hard to introduce e-banking that is user-centric and rich in functionality. This segment is notable for its involvement in digital assets and tokenisation. A further characteristic is that they are using tech-enabled tools such as consumer versions of ‘terminals’ similar to Refinitiv and Bloomberg.

Among the broader mass affluent individuals, we find the prevalent use of automated broker services such as Robinhood, Tiger or Futu, which offer speed, precision and a sense of community, and also are ideally suited to retail investors who want to self-serve. These service platforms are also altering investment behaviour because they are pushing ETFs harder, which means investors can get exposure to sectoral and thematic investment baskets and can therefore customise their own portfolio of holdings.

The success of various technology offerings is having a detrimental effect on traditional, face-to-face models right from street corner brokers in Hong Kong to branch network-based retail banking. A leading technology-driven equities broker, Futu, recently announced that its number of users now accounted for about one-third of Hong Kong’s adult population. That is bound to have an impact on the traditional cohort of providers.

Service
The other thing to consider is that investors, no matter where they are on the wealth spectrum, are becoming much more selective.

The UHNW community in particular is very open about comparing fees and requiring their advisers to have a granular knowledge of their investment portfolio and their wants, needs and causes.

Technology can be an enabler of such service requirements, but automating KYC, client risk appetite, guarding against conflicts of interest and generally enabling the adviser to provide a next-level service remains an evolving process.

Demand for high levels of service will increase as a younger cohort of investors come on board and want to be more involved in their own affairs and are more empowered to seek out the very best of service and product propositions, shopping around and being more inclined to jump ship as and when they see fit.

Thus, right from the top to the bottom of the investment landscape, technology is serving as an enabling factor.

In the future, we think that some elements of technology will become a commodity play – in particular, middle and back-office systems. For example, in Switzerland, many medium-sized players use the Lombard Odier booking platform in a white-labelled format – so they maintain their own branding at the front end. HYWIN has also been championing digital transformation by investing in technology infrastructure and supporting our managers to provide the utmost service to HYWIN clients.

In addition, anything that can be safely automated will be. Tech differentiation will instead come from front-office tools and enable the adviser to provide a different level of service, one that is likely to attract and retain clients.

Banks need to be able to keep the personal touch and to have a granular working knowledge of their clients to provide a service that is customised and delivered in the manner the client wants and at the time of their choosing.

This article is from The Wealth Mosaic’s APAC WealthTech Landscape Report 2023. Access the full report here.