What is the biggest market pain point for private banking platforms that robo-advisors can address in Hong Kong?

 

 

According to a recent study, there are less than 4000 private wealth management practitioners (meaning relationship managers, product specialists and client facing staff) versus close to 200,000 high net worth and ultra high net worth clients in Hong Kong. That is a client to PWM practitioner ratio of 50 to 1 or if you just count relationship managers to clients it is 70 to 1. This is not a sustainable ratio particularly if they want to keep onboarding more clients.

 

For financial institutions and relationship managers robo advisors can immediately help by offering a highly automated, strong performing and most importantly scalable investment offering that allows relationship managers to service more clients while keeping the client experience at a high level.

 

What is the growth projection for the robo-advisory industry?

 

 

On a global scale the robo advisor industry is projected to double its AUM to US$2 trillion in the next 3 years while users growth is also expected to jump 3 times to 121 million globally by 2022.

 

In Hong Kong the growth numbers are even more promising. In the same 3 year time frame the AUM growth is projected to spike 10 times to US3 billion along with a 8 times growth in users to 180 thousand. Might not sound like a lot but this is just the tip of the iceberg.  

 

 

Given the recent banking virtual licensing were approved by the HKMA, is this something fintechs are looking into?

 

Virtual banking licensing wise this is something we along with many other fintechs are looking at but unlikely to take action given the $300M minimum capital requirement and other hurdles which makes it quite out of reach for local fintechs. As we saw with the financial service providers who were just approved: Bank of China HK, JD.com Standard Chartered, Zhong An and others, size wise no local fintechs are really in the same weight category. But it definitely is a step in the right direction for the industry and...potentially there might even be room for collaboration between fintechs and these new virtual banks.

 

To learn more come to the HKSFA event “Inside a Robo Advisor” on April 17th.

 

 

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