More of the burgeoning wealth in Asia-Pacific is expected to be managed digitally in the next three years, with up to US$700 billion from mass affluent and high-net-worth (HNW) segments shifting to wealthtechs as customers become wealthier, more tech-savvy, and increasingly willing to explore digital wealth management solutions, a new report finds.

In addition to shifting their wealth, around 50-60% of affluent investors also expressed a desire to grow their assets through digital wealth management platforms, according to a survey conducted by McKinsey. About 80% shared a preference for leveraging digital solutions, highlighting key factors like cost, greater transparency and control, and personalized investment strategies.

The findings were unveiled at the third edition of the Endowus WealthTech Conference, held in Singapore last week. About 1,000 respondents from Indonesia, Malaysia, Singapore, Thailand, and Vietnam participated in the survey taken last month.

McKinsey notes that wealthtechs, or wealth fintech firms, have already begun preparing for the wealth migration with many developing strong robo-advisory algorithms to personalize asset allocation recommendations and asset rebalancing, based on customers’ investment profiles, offering low advisory costs and ensuring full transparency on asset holding and control over the invested portfolio.

While more consumers are making the shift to digital, the comfort shown towards technology continues to be tempered with expectations for continued human interaction. Approximately 80% of the survey respondents expressed trust in digital wealth platforms, appreciating automation that manages routine tasks but some 45% still prefer having human assistance in their financial journey.

It seems that for digital wealth players hoping to win over this group of investors, service delivery must seamlessly integrate efficiency with empathy.

Endowus co-founder and chairman Samuel Rhee comments: “The wealthtech sector continues to enjoy a positive trajectory as more of Asia’s affluent become familiar and comfortable with the diverse digital offerings in the market. But while the adoption of technology rises across customer segments, the wealth management industry must also evolve to effectively address these new preferences and behaviour.

“With increasing expectations for seamless experiences between the digital and human realms, wealthtech players must ensure that they can maximize convenience and accessibility, without compromising on quality and connections. While we embrace digitalization to enhance efficiency, personalized service delivery must remain top priority, ensuring that investors are empowered with the right solutions and advice to help them achieve their unique financial goals.”