Private bankers in Asia are pouring more money into technology, while new robo-advisory firms are opening up in the region. Private bankers don’t seem too concerned about machines eventually eating their jobs, however.
Wealth management is becoming an increasingly popular focus for Asian fintech start-ups, with several new firms – including StashAway and Miss Kaya – launching in recent months.
Singapore and Hong Kong are also now technology hotbeds for most major private banks. When BNP Paribas released a suite of new financial technology services in June, half of them were conceived in Asia.
Much of this in-house tech is client focused. DBS’s new iWealth platform, for example, gives private clients easily accessible data and portfolio reviews via their mobile phones.
“But as much as technology is creating huge changes in terms if efficiency, at its heart this is still a people and advice business,” says Christophe Aba, regional head of investments for Southeast Asia at J.P. Morgan’s private bank. “I haven’t seen any tech on the horizon that poses an existential risk to client-facing advice jobs in private banking.”
“The critical word advice,” he adds. “In any industry if you’re simply selling a product or commodity, it’s only a question of time before technology finds a way to take the human out of that equation.”
Lawrence Lua, deputy head of DBS Private Bank, says wealthy people in Asia still “love to talk face to face about their finances” and they want to hear bankers’ opinions. “A robot won’t replace you, another RM will. The next generation of wealthy people in Asia are demanding more from banking technology. But at the same time they want advice from private bankers,” he told us previously.
Technology acts as a counterweight to the growing compliance obligations that are sucking away time from private bankers in Asia. “Advances in tech help free private bankers from mundane tasks, allowing them to focus more on higher-value services for clients,” says Freddy Lim, co-founder of Singapore robo-advisor StashAway and former global head of derivatives strategy at Nomura.
“Tech can help RMs to analyse data and predict trends more quickly, so they can focus on building relationships and providing advisory services,” adds Sean Kang, director of APAC wealth management at consultancy McLagan.
Senior bankers says RMs must not just keep pace with technological change in their industry, but also collaborate with their firm’s developers. “Our investment advisors work closely with our technologists,” says Aba from J.P. Morgan. “After brainstorming a new innovation, we could potentially have a mock-up of it within 24 hours, and then about six or seven weeks later it could be rolled out to clients.”
But there are limits to the usefulness of technology in private banking that help explain why firms such as UBS, Julius Baer, Standard Chartered, DBS and Bank of Singapore are hiring more Asian relationship managers even as they invest in tech.
“I don’t see our clients having an in-depth conversation with a computer about their children’s educational needs,” says Aba. “Artificial intelligence will play an increasingly important role in private banking,” adds Lua from DBS. “But how do you get a machine to connect you to the capital markets or help you through an M&A deal? It’s the RM who connects these dots.”
Private bankers are – for now – not overly worried about the rise of Asian wealth-tech start-ups, mainly because most of them target less wealthy clients. “In general, B2C robo advisors are more focused on delivering cost-efficient solutions to the mass affluent – people with up to $1m to invest,” says Lim from StashAway. “There’s more overlap between priority banking and some of these robo advisors.”
Could robots take over from RMs one day? “Tech has already surpassed humans in data analysis and trend prediction, but it’s yet to duplicate the human touch. If it get close to this, it could potentially pose a threat to RM jobs,” says Kang from McLagan. “If we develop robots that look and sound human, then perhaps we can create robotic bankers who will help solve the long-standing talent shortages in the sector in Asia.”
Image credit: neill4real, Getty