The Rise of Financial Services in Asia: Opportunities for Incumbents and Non-Financial Companies

The rapid wealth creation in Asia has created an attractive environment for companies looking to expand their provision of financial services. This article explores the opportunities presented by this growth and examines how incumbents and non-financial companies can capitalize on this trend.

Advantages of non-financial companies in the digital era

In the digital era, non-financial companies, such as consumer platforms and Super Apps, have a distinct advantage. They not only enjoy digital touchpoints to cross-sell other services but also possess vast amounts of data, enabling them to personalize these services. This combination of digital capabilities and data-driven approaches enhances customer experience and service delivery.

The importance of cost-effective and scalable financial advisory services is significant

The companies that will capture the market, whether incumbents or non-financials, need to find ways to cost-effectively and scalably deliver advised financial and investment services. The key lies in striking a balance between personalized guidance from professionals and leveraging digital tools to streamline operations and reduce costs.

Consumer engagement with banking apps

A significant number of consumers actively engage with their banking apps on a weekly basis, with 58% reporting regular interactions. This heightened engagement presents an opportunity for financial institutions to leverage these digital touchpoints to offer additional products and services, thereby deepening customer relationships.

High trust in banks and non-bank platforms

Banks enjoy high levels of trust in their ability to deliver financial services beyond traditional banking. A surprising finding is that non-bank platforms, particularly Super Apps, enjoy similar levels of trust as banks. This trust gives non-bank platforms a competitive edge in capturing a share of the financial services market.

The advantage of Super Apps lies in their ability to enhance engagement and provide multiple touchpoints

Non-bank apps, particularly Super Apps and consumer platforms, have a significant lead in engagement compared to banking apps. This increased engagement translates into more touchpoints through which these platforms can recommend relevant financial products and services. With their trusted status and extensive user interactions, Super Apps have the potential to reshape the financial services landscape in Asia.

Willingness to use non-financial service providers for investment services

A substantial portion of individuals who haven’t used investment services in the last year expressed openness to using non-financial service providers. In fact, 96% of respondents indicated their willingness to explore such options. This presents a significant opportunity for non-financial companies to enter the investment services market and compete with traditional incumbents.

Preference for hybrid model in service delivery

When it comes to financial advisory services, a hybrid model that combines digital tools with assistance from a human advisor is highly favored. Forty percent of respondents indicated their preference for this approach, appreciating the convenience and personalization that digital tools offer, while still valuing the guidance and expertise of an advisor.

Untapped investable assets in Southeast Asia

A staggering estimate by Additiv suggests that Southeast Asia alone has over $1 trillion worth of investable assets that are not professionally managed. This untapped market presents immense opportunities for both incumbents and non-financial companies to cater to the investment needs of individuals in the region.

The rapid wealth creation in Asia has opened doors for financial institutions and non-financial companies to expand their reach and offerings. With the advantage of digital touchpoints and personalized service delivery, non-financial companies stand strong in this evolving landscape. However, traditional banks still enjoy high levels of trust, while Super Apps boast similar levels of credibility. To capture the growing financial services market in Asia, both incumbents and non-financial companies must adapt and innovate. Strategic partnerships, technological advancements, and a customer-centric approach will be pivotal in this race for market dominance. Ultimately, it is the companies that effectively deliver cost-effective and scalable advised financial and investment services that will thrive in the ever-evolving Asian market.

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