The wealth management sector has been using technology to enhance its core offerings and reducing the cost of doing business. But going forward, the focus will be more on how technology can be harnessed to make for a better customer experience and to smooth the path when it comes to processes like onboarding customers and personalisation.

“Wealth managers obviously need a robust technological platform. In the Asian wealth management industry, there is a very strong desire to scale rapidly. This is due to the vast amounts of wealth being created and the pressing need to be able to service that wealth. Consumer behaviours in the Asian markets are also slightly different in that people like to protect their wealth once retirement age is reached,” says Sopnendu Mohanty, Chief FinTech Officer, Monetary Authority of Singapore (MAS).

And given the relatively young demographic in Asia, what we also see, he says, is a strong desire to have instant gratification when it comes to wealth management services.

Successful wealth managers need to meet that demand and that means full digitalisation should be at the forefront of their proposition.

Covid-19 acceleration
Covid-19 has ramped things up. It has acted as a catalyst for both the need and the appetite to digitalise. Indeed Covid-19 swept away the ability to meet face-to-face and the ability to onboard and service manually. New ways of doing things had to be brought into play and quickly - and the tools to do so are instantly a requirement.

“One area which stands out is the ease in which customers can be onboarded and the technical means to automate and streamline that whole process. The need to enter the same piece of data multiple times has been removed by technology and process automation has come to the fore. There needs to be a digital infrastructure in place that can take data from public infrastructures and move it over during the onboarding process,” says Mohanty

So, in this respect he thinks that there needs to be a horizontal layer that sits on all these onboarding processes that can move data to the right place on a onceonly basis. It needs to be able to take data from a national ID card and bring it over seamlessly and automatically. This will enhance customer experience and feed into reducing the cost to acquire and then service someone.

Ecosystems
“Ecosystems and how they are developing, and maturing is another area of interest. We think service providers will become embedded into the broader ecosystem and the touchpoint is at the point of sale,” he says.

He gives examples; in a retail sense it might be insurance at the point of sale of a car. “For the wealth management sector, it is about providing a holistic, concierge type service such as health benefits or travel add-ons or experience around fine dining or hobbies and the like. It is about using technology to respond to what the customer is doing and add value by being both relevant and timely.”

Again, this relies on having the right infrastructure and being able to design the products and solutions so that they can be personalised and offered at the right time to the right person. This plays into the ‘segment of one’ principle where there is a collaborative and engaging approach with the customer that creates a deep relationship.

“We also see ESG as an important factor that wealth managers need to take into consideration. It is another good example of something that was once a ‘nice to have’ coming to the fore as a horizontal layer that sits on a broad range of functions.

Indeed, building ESG into the whole investment approach is now widely seen as a standard requirement from millennial investors. Consumers want the cost of transaction to go down, but they also want to be wooed and have their needs and interests met,” he says.

MAS
Mohanty says that MAS is focusing on supporting the infrastructure tools. “By this, we mean the cloud, AI and blockchain- all of which we believe will make a significant contribution to the wealth management landscape in the months and years to come.”

“One issue in particular that we are looking at is AI and the FEAT principles- fairness, ethics, accountability and transparency. This looks at eliminating all false assumptions that AI can make and there is close collaboration with the industry to do so. These infrastructure plays will have a huge impact in the way that our industry is designed and structured going forward, and so it makes sense to get them right from the beginning,” he says.

He also gives the example of the regulatory sandbox as a way in which MAS looks to engage with the industry and collaborate. “We look to be able to accommodate not just the traditional linear approach to getting something to market but also the more innovative approach often taken by FinTechs which is to solve a problem, put a tool into play and from there refine it and enhance it.”

But amidst all this innovation, he points out the importance of not forgetting to provide robust consumer protection, work against cyber-crime and maintain financial stability issues. “Innovation needs to be built on solid foundations and a series of horizontals that can run through the business and form a robust supportive seam for any given ecosystem,” he concludes.

This interview was part of TWM's recent APAC Wealth Technology Landscape Report (2021). Click here to access the full report.