APAC WealthTech Market Growth After COVID-19: An Expert Roundup

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Wealthtech in APAC

The WealthTech market in the Asia Pacific region shows a promising future. With the fast-paced developments in tech and wealth management, it’s expected for the industry to see bigger and better innovations. The Wealth Mosaic shares that the region boasts of its expanding client base, which many consider as more tech-savvy compared to the market in North America and Europe.

However, there has been a lot of discussions on how the market will move forward following the spread of COVID-19 in various parts of the world. Will the pandemic hinder the sector to grow in the region? What can be expected from the client base of the sector? Will it continue to expand or will its growth plateau?

What about the American and European companies who want to expand in APAC? Will they push through with their expansion? Also, how will APAC-based companies adapt to the market?

With this in mind, we’ve come up with an expert roundup on APAC wealtech market growth after the pandemic. We’ve invited three professionals leading the WealthTech market in APAC to share their thoughts:

  • Yoshi Yokokawa, Co-Founder & CEO at Alpaca
  • Paul Lee-Simion, Managing Director – Asia at AlgoDynamix
  • Kevin Hardy, General Manager Asia Pacific and Member of Group Executive Board at additiv

Here are the two questions that we’ve asked them:

  • How will the APAC WealthTech market change in 2021?
  • How is the outlook for Wealthtech companies in terms of growth and development look?

 

 

Check out their responses below:

   Yoshi Yokokawa

Yoshi Yokokawa

Co-Founder & CEO 

Alpaca

How will the APAC WealthTech market change in 2021?

Looking at the global fintech trend, I feel that “cross-border fintech” will earn more attention and funding in the coming years. This was triggered by the change of how the tech community has transformed itself to be remote-first due to the COVID-19, which I don’t think will return to the old normal even after the vaccines are to be distributed. This also caused people in the tech community and their minds to expand internationally instead of having very much the only-US focus.

The APAC WealthTech market will be highly impacted by the internationalization of US tech where more companies will seek for more business opportunities globally. More US fintech companies will try to expand internationally by both partnering with local regulated companies in APAC or by providing the infrastructure to be adopted by local companies. Alpaca (https://alpaca.markets) is no exception to this, and we are shifting our focus to the global market to offer access to the US stock investments to users globally by partnering with local financial services and startups.

What does the outlook for Wealthtech companies in terms of growth and development look?

With the trend of “cross-border” emphasis, we have changed the team from Silicon Valley heavy organization to a fully globally distributed organization across multiple continents. This has allowed us to obtain a better understanding of local cultures when going after different jurisdictions.

APAC is an important region for Alpaca (https://alpaca.markets) not only because I am from Japan, but also we are confident about the explosive growth of interest in US stock investments from the region. It is true that the region closely looks at what is trending in the US market. As long as the companies can figure out the complexity of the APAC cultures and regulations, I expect more wealthtech firms will try to expand in the region.

Paul Lee-Simion

Paul Lee-Simion

Managing Director – Asia 

AlgoDynamix

Over the past five years, wealth organisations have been innovating with technology. Their concern is centred around client acquisition and digital engagement. With Covid-19, the proofs of concepts that emanated from their innovation labs have been taken off the shelf and accelerated into production.

The innovations that have been driven by and focussed on the user experience will thrive if they are funded. Large organisations are increasingly looking for partnerships with start-ups. However, start-ups need to be sustainable and not dependent on one client. Due to the Covid-19 situation, private funding has dried up for start-ups. However, there are numerous new government-sponsored investment vehicles for funding and legal structures supporting those vehicles.

Start-ups must be aware of the opportunities presented by market shifts to ESG (environmental, social and governance) and SRI (socially responsible investing), the impact of China’s Belt and Road initiative, Islamic Finance and Sukuk investments.

Over the next few years, we will see start-ups that have engaged large organisations to be at the forefront in regions such as USA and UK. We will also see an acceleration of start-ups emanating from China and South East Asia with ‘safe bet’ funding. These Asian start-ups will have to compete with those aggressively moving into South East Asia from the USA / UK.

Increasingly, the solutions around client acquisition and digital engagement will use artificial intelligence, big data and machine learning. User journeys on digital engagement will need to be backed up by changes in regulations and legislation. The challenge, that must be surmounted during the Covid-19 quarantine situation and will continue beyond Covid-19, is giving a very personal service across demographics and wealth profiles, whether the service fast and furious via mobile phones or emulates the relaxed face to face meetings in a country club.

Kevin Hardy

Kevin Hardy

General Manager Asia Pacific and Member of the Group Executive Board

additiv

How will the APAC WealthTech market change in 2021?

The ongoing pandemic has resulted in consumers ‘demanding’ instant, seamless omni-channel services, such digital expectations will become more profound in 2021.

APAC’s winners in wealth management must provide digitised experiences – offering client’s rich functionality which interprets and draws insight from multiple datasets.  Simultaneously clients expect more personalised and specific outcomes such as sustainable themes that deliver stable high returns.

This demands digital age wealth management technology.  But IT budgets are tight, and many firms suffer aged architecture.  However, these services can be sourced via the cloud, creating low-cost, highly configurable and fast access. This levels the playing field, so expect challenges from providers willing to embrace these services.

What does the outlook for Wealthtech companies in terms of growth and development look?

Expect significant growth opportunities in APAC for additiv and the industry as WealthTech democratises and extends the reach of savings and investments.

Customers want to be 100% digital, additiv’s range of wealth management solutions are designed to achieve this, and are configurable not coded, thus avoiding the ‘broken IT infrastructure’ challenge. We allow clients to consume from their existing core systems yet deliver the scalable and adaptable e2e digital experiences their consumers deserve.

Speed is essential, consequently we launched our KickStarter™ program in the midst of the pandemic. Our SaaS model can be delivered in 3 months with no upfront capex, only SaaS fees are applicable.

A promising outlook for the APAC Wealthtech Market

Despite the unexpected twist and turns that resulted from the pandemic, Asia Pacific’s wealthtech market remains to show huge potential. Our invited experts agree that the current situation will most likely result in the expansion of UK and US based wealthtech companies. If anything, COVID has sped up the timeline, opening opportunities to growing tech hubs such as the APAC.

Datasearch Consulting would like to extend our deepest gratitude to our guest contributors, Yoshi Yokokawa, Paul Lee-Simion and Kevin Hardy. Thank you for generously sharing your insights on the Wealthtech market.

Want to know more about Wealthtech in APAC? Stay tuned and join future discussions on Wealthtech, Tech and Fintech by subscribing to our monthly newsletter.

 

 

 

Salma Kazi is the Business Development Executive at Datasearch Consulting, a leading executive recruitment firm specialising in the Financial Technology & Data sectors.

You can download their FREE comprehensive guide on “The Complete Guide to Hiring Fintech & Data Talent – 5 Proven Steps to Secure the Best Candidates Possible” hereAlternatively you can view the Datasearch Consulting website or contact them directly on info@datasearchconsulting.com for a more detailed discussion

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