Introduction: Fintech is changing how assets are managed
Technosunil – Fintech is changing how assets are managed. With help from Manjit Singh. Leader of the Asset Management and Insurance Practice at PwC Malaysia, and Lum Kar Hoe, Manager at PwC Malaysia
In the past five years, Fintech’s growth has sped up significantly around the world, changing the way the financial services business looks and works. Malaysia’s financial services industry is being affected in a big way. As traditional players try to change their business practices and ways of doing things to adapt to this new wave of change.
Fintech is driven by the fast growth of millennials, who make up one-third of Malaysia’s population and are the next group of investors. They are also very interested in technology.
Local fund management industry players PwC talked to said that the effects are felt most by the asset management business. To meet the wants of tech-savvy millennials, the industry needs to change the way it thinks and does business.
Fintech companies are coming up with new ways to help customers with all parts of their investment journey. From planning their money to managing their investments. This has caused a lot of problems in the value chain. Which means that new companies could take some of the market share from the old ones.
A lot of Fintech businesses are interested in Asia’s growing private wealth. The Boston Consulting Group thinks that Asia-Pacific (not including Japan) will have more individual wealth than Western Europe in 2019. With an estimated US$55 trillion.
Fintech companies want to get into the Malaysian asset management market because it is the biggest unit trust business in Southeast Asia[1]. It’s time to change things.
AI guide at play
Among the biggest changes that the business has to deal with are robo-advisors. It automates the process of allocating assets and gives users a more personalized experience at a much lower cost than traditional asset management companies. Local players are in a big danger because of this. Especially since Malaysia has one of the biggest entry fees in the world for fund managers.
How Motif Investing, a robot planner, is changing the way assets are managed
There are more and more robo-advisors in the US and Europe, but they are just now starting to make their way into the Asian market. Recently, though, a number of automated advisory systems have sprung up in the area.
As an example, five of Asia’s six biggest internet companies are already in the wealth management business. TenCent[2], for example, has added a wealth management service to its well-known app, WeChat. Users can now put their money into a money market fund through the app.
A shift in thinking
From talking to people in the local fund management business, we learned that they are already looking into how to use some of these FinTech solutions, such as robo-advisors. They think that these new ideas will make their businesses less stable.
To make the most of Fintech, asset managers will have to completely change how they do their jobs. Here are some of the most important things that players will need to do to change to the new market.
A shift in thinking
Because Fintech is so radical, people need to change the way they think. Asset managers will have to question what they think they know and try out new ways of doing business, like partnerships and teamwork. This means using new technology in all areas of their business, putting the needs and experiences of their customers first, making sure that their solutions are tailored to each person’s needs, and putting Fintech at the center of their strategy.
Running the system
When you try to carry out a plan, the devil is always in the details. It could mean the difference between two outs and a home run. In the case of robo-advisors, for example, the application will need to include the whole lifecycle of a unitized investment, from the investor’s research (front office) to the investment choices (middle office) to the operations (back office).
Putting together personal info
One of the most important parts of a robo-advisor is the information it gathers from users. That way, it will be able to choose the best investments[3]. A SAP study says that before you can get your customers to give you their personal information, you need to reassure them that they will have a great time using your service. Customers who are happy are five times more likely to share private information than customers who are unhappy. The study also said that consumers care a lot about security and services that can be used on a lot of different platforms when it comes to their digital experience.
Touch of people in the modern world
With the help of data analytics, apps, and algorithms, fund managers can add more “human touch” to their interactions with customers through robo-advisors by making interactions more personalized. For example, they can give customers tailored financial news and reports. People with less money can now get the same personalized and custom solutions that used to be only available to very wealthy clients. This, along with great customer service, will make the experience of investors great.
CONCLUSION: Fintech is changing how assets are managed
When asset management firms look for new investors, they don’t look like the older investors they used to work with. They need easy-to-use. Fully automated online investment tools that let them access everything from market information to wealth reports to social investment interactions on their phones.
This means that asset managers need to change how they think, what they do, how they run their businesses. And how they interact with customers. Because these changes will not happen right away, people who work in asset management should move now. Do not wait until something breaks. Before technology turns your business upside down. You should disrupt it by streamlining your processes and looking for new ways to connect with your customers. Being an early user will pay off soon enough.
