Key drivers transforming wealth management in APAC

The APAC private wealth management landscape is shifting rapidly as new tools and client demands push the industry toward increased efficiency, accuracy, and competition. 

Recent discussions and year-end analysis highlight areas of key change in the market: the rise and changing nature of external asset managers (EAMs), the impact of real-time pricing and AI, and the evolving expectations of clients who seek swift, tailored services. In what ways will  these drivers play a crucial role in the future of wealth management in APAC and what lies ahead for private banks, wealth managers, and their clients? 

The rise of EAMs

EAMs, also known as Independent Asset Managers (IAMs), are independent firms that provide tailored wealth management services, often collaborating with multiple banks to offer a diverse range of products.  

This model, traditionally popular in Europe and the US, is gaining traction in Asia as clients seek more personalized and flexible investment solutions. For instance, one of the Hong Kong’s leading banks launched its EAM strategy across key business centers, including Singapore and Hong Kong, to cater to this growing demand. 

By working with multiple banks, EAMs can leverage diverse resources and platforms, placing higher demands on these institutions to provide quick, high-quality transaction support. This dynamic is driving banks to streamline services and enhance execution efficiency, often through technological advancements. 

Changes in real-time pricing and structured product lifecycle management

The private banking sector has undergone dramatic shifts with the adoption of real-time pricing technology, fundamentally reshaping how structured products are managed. 

The market has gone from daily runs and spreadsheets to virtually every bank and player offering real-time pricing tools. These options feature streaming, live price quotes from a variety of banks and liquidity providers, improving transparency and trade speed. Customers can immediately execute an action instead of needing to perform further analysis on pricing insights. 

Real-time pricing tools have also contributed to a more standardized, competitive market for structured products, allowing clients to secure optimal pricing. These rapid pricing improvements are advancing in tandem with accuracy gains in structured product lifecycle management. 

This shift not only boosts reporting accuracy but also minimizes errors. Tasks such as managing stock splits, special dividends, and other corporate actions are now handled with greater efficiency and precision, thanks to advanced automation tools. 

Private wealth and AI

Generative AI has not been fully embraced in client-facing environments but is seen as having the potential to take accuracy and insight improvements further. Many banks are testing GenAI pilot projects, but future rollouts will depend on those successes as well as regulatory and compliance needs. 

Private banks are already leveraging machine learning and advanced analytics to refine client recommendations, manage risks, and boost portfolio performance. Making more proactive decisions based on clients’ transaction histories, trade volumes, and risk profiles is a natural next step.  

Additionally, large banks are exploring data tools to streamline pre-trade processes. By reducing time spent on tasks like assessing buying power and verifying pre-trade disclosures, asset managers can execute trades more swiftly. This reflects a larger trend toward using automation and AI to minimize manual intervention, ultimately lowering operational risks and boosting efficiency across the board.

Smarter platforms will drive future competition

In recent years, wealth management tools and capabilities have become accessible to a broader audience beyond traditional private banks. This has resulted in increased competition from External Asset Managers (EAMs) and may also create additional opportunities for technology providers. 

Very agile, tech-oriented wealth managers are performing well in the mass-affluent space at the moment. However, their inroads to new clients are impressive because of their ability to offer solutions that were historically available only to clients of private banks. While the threat isn’t immediate, experts suggest banks and others pay attention as these managers and even fintechs set their sights on the higher end of the market. 

Insights in this article are based on the “The Banking Industry & Private Wealth” panel which was part of the Bloomberg APAC Sell-Side Forum held in Singapore in 2024.