The future of wealth management: Supporting tomorrow's customers across the wealth continuum

JUST as hybrid work arrangements are set to be a permanent fixture of the future, when it comes to serving the wealth needs of customers, banks are finding that a hybrid model of in-person and digital engagement works best.

With its fast-growing middle-class population, South-east Asia is home to a large number of emerging affluent. In fact, the number of emerging affluent in South-east Asia alone is set to double to 140 million people by 2030, according to research by the Boston Consulting Group.

It is also true that many of Asean's emerging affluent are digital natives who prefer being engaged digitally and expect to have information on demand. This consumer behaviour was validated by findings from the 2021 UOB Asean Consumer Sentiment Study (ACSS), where 7 in 10 consumers in Asean expect their online banking activities to increase in the next 6 months.

The same research also showed that consumers are most likely to go online for simple banking transactions, such as checking the status of cash rebates, rewards points or miles. In regard to investing, close to two-thirds of Asean consumers said they would purchase insurance and investment products online.

With increased liquidity and disposable income, as well as a higher adoption of digital banking services, comes a greater need for online financial planning and wealth management tools. Just as the future of work has been reshaped by digital forces, digital innovation has democratised wealth management, breaking down the barriers for services most often reserved for high-net-worth individuals.

While more confirming than surprising, the ACSS findings highlight the importance for banks and financial institutions to provide greater digital access to banking products and wealth solutions for this segment of customers. Therefore, if savings accounts and loans can be easily applied for online, so should wealth management solutions such as investing tools.

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At UOB, we have seen a 10 per cent increase in digitally-engaged customers in 2020. In the same period, we also saw a 186 per cent growth in digital wealth transactions. Wealth fee income by the bank is projected to double by 2026 - a compound annual growth rate of more than 15 per cent.

But while the digital demand is great, we believe that an online-only approach is only 1 side to our wealth "coin": Our research shows that customers still appreciate personal interaction even as we see a higher uptake of digital tools. In fact, according to another UOB survey which polled more than 1,000 consumers in South-east Asia, 2 in 3 respondents said they still stand by in-person banking for transactions such as purchasing complicated investment products.

An omni-channel approach

What do the numbers then mean? Banks need to continue investing in both their digital and in-person offerings in order to meet customer demand. According to UOB's data, omni-channel customers are also more engaged as they transact with us more than once everyday. We have seen the average number of transactions by these customers grow by 26 per cent in the first 9 months of 2021.

Recognising this need, at UOB, our omni-channel approach is designed to complement rather than to replace our in-person offerings. At the heart of our omni-channel strategy is our intent to provide our customers with a consistent and seamless experience across both offline and online touch points, making every touch point simpler, smarter and safer.

To this end, UOB has redesigned the branch experience for the emerging affluent. We tap artificial intelligence (AI) and data analytics to provide our wealth banking customers a personalised experience when they visit the branch.

They will receive information on relevant financial solutions that could be of interest to them on their mobile phones and this same set of information is also received by their relationship managers so that they can answer any questions the customer may have on these financial solutions.

We were also the first Singapore bank in 2019 to offer a suite of wealth advisory tools for the emerging affluent segment of consumers. The Portfolio Advisory Tools (Pat) used by the bank's wealth advisers provides customers with insights to help them monitor, manage and optimise their portfolio.

The Pat draws upon 12 years of historical market data to simulate - through data visualisation - the expected performance of investment portfolios against various economic scenarios. It enables our wealth advisers to help our customers gain deeper insights into their investment portfolios and to have more meaningful conversations with them for better engagement.

We have found that our customers have had a positive experience with Pat, with more than 1 in 5 wealth banking customers actively investing after using Pat.

Alongside in-person advisory, banks are also developing their client-directed digital wealth management tools.

At UOB, as part of ramping up our digital innovations, we have launched a series of progressive digital wealth solutions such as SimpleInvest, which is integrated in our digital banking app, UOB TMRW. These solutions enable our customers to monitor, manage and optimise their portfolios online.

For example, SimpleInvest's digital nature and lower entry point of S$100 helps customers to overcome traditional obstacles to investing, thereby helping them kick-start their investment journey.

Launched in June 2021, SimpleInvest allows investors to select from 3 investment solutions depending on their risk appetite and goals. The funds are actively managed by renowned international asset managers such as Fidelity International, JPMorgan Asset Management and UBS Asset Management that manage a total of almost US$10 trillion in assets globally.

Anticipate customers' needs

Another digital wealth offering by UOB is SimpleInsure where customers can easily apply for PRUCancer 360, a cancer insurance plan which provides coverage until the age of 100 with 100 per cent payout at every cancer stage.

This digital wealth solution has attracted a younger audience who appreciate the security of a human-managed fund, yet are comfortable investing online - two-thirds of SimpleInvest's users are under 40 while close to 9 in 10 users purchased unit trusts for the first time. As at September 2021, 1 in 3 SimpleInvest users are on monthly recurring investment.

We have also harnessed data and technology to help our customers make wiser financial decisions. For example, since 2019, we have provided personalised insights to customers via our mobile banking app so they can understand their spending and saving behaviors and make decisions that will help them achieve their financial goals.

As customers continue to tap these insights to help them manage their finances, we have seen average account balances of the bank's current and savings accounts grow by more than 10 per cent year-on-year as at end of September 2021.

As banks, it is our responsibility to provide financial access for our customers. Whether the demand is for digital wealth management today or AI-powered adaptive banking tomorrow, banks must continue to anticipate customers' needs as they move through their own life journeys and provide the financial solutions needed to help them along the way.

• The writer is head of group personal financial services, UOB.