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- Executive Summary
Key Takeaways
- Hong Kong and Singapore continue to play a pivotal role in Asia-Pacific’s wealth management landscape, with their combined domestic wealth pool projected to approach USD 7 trillion by the end of 2026. Beyond the high-net-worth segment, both markets present substantial opportunities for wealth managers, particularly within the mass retail (<USD 1 million) and core affluent (USD 1 million+) client segments. Furthermore, as leading cross-border wealth destinations, Hong Kong and Singapore attracted over USD 4 trillion of wealth from overseas investors in 2024. With the notable growth of personal investable assets in China and a strong preference for these two markets among Chinese investors, Hong Kong and Singapore are well-positioned to reinforce their roles as premier regional wealth hubs.
- Despite their role as key wealth management centres, Hong Kong and Singapore continue to face challenges in traditional wealth management – particularly around operational inefficiencies and limited personalisation. These issues have fuelled a growing demand for digital solutions across all wealth segments. To this end, wealth technology (“WealthTech”) solutions are rapidly reshaping the industry by enhancing accessibility, affordability, and customisation. While new digital native entrants, such as robo-advisors and neobrokers, are rapidly gaining market share, established financial institutions are racing to digitalise their services across the wealth management value chain.
- To better understand the digital transformation journeys of financial institutions, we engaged 64 senior industry executives in Hong Kong and Singapore through in-depth surveys and interviews. Our research findings revealed key insights across their strategic priorities, outsourcing preferences, and partnership approaches:
- Strategic Priorities: financial institutions’ digitalisation efforts remain more focused on enabling their relationship managers (“RM”) rather than launching new direct-to-client (“D2C”) propositions. Across the client journey, institutions showed the strongest interest in deploying WealthTech for portfolio construction, and investment execution, and performance tracking-although a notable gap remains between perceived impacts and actual implementation. Our interviews suggest that such gaps can be attributed to institutions prioritising WealthTech deployment on a ‘transaction nature’.
- Outsourcing Preferences: financial institutions showed a strong inclination to outsource areas across client engagement, investment advisory, and operation / administration. However, many still prefer to retain control over strategically important and commercially sensitive operations to preserve their competitive advantage. When seeking access to financial products through WealthTech vendors, institutions typically prioritise simpler, traditional investment products, such as equities and mutual funds, over more complex products like derivatives and digital assets.
- Partnership Approaches: financial institutions prefer engaging with technology-led vendors to financial institutions with their own WealthTech capabilities. Interestingly, potential conflicts of interest- such as white-labelled solutions from robo-advisors- are not seen as major concerns. When assessing vendor credentials, institutions cited cybersecurity certification as the most important factor, while interoperability with existing legacy systems emerged as the key implementation requirement. Despite coordination challenges, institutions prefer working with multiple vendors, citing concerns around concentration risk and the lack of awareness of any single vendor offering a full suite of solutions.
- Looking ahead, we anticipate greater collaboration between financial institutions and WealthTech solution providers, including a growing preference to engage vendors offering both technology enablement and financial product access in order to reduce integration complexities and streamline internal operations. With a vast and rapidly expanding wealth pool, we believe Hong Kong and Singapore are well-positioned to unlock substantial opportunities offered by digital wealth management solutions in the coming years.
