The Rise of Digital Wealth Management in the Growth Markets of ASEAN

Pieter Zylstra is General Manager for APAC at Swiss WealthTech additiv and provided delegates with an interesting presentation at the Hubbis Indonesia Wealth Management Forum in Jakarta on March 22. Armed with an easy-to-digest slide show, he explained how additiv has been forging ahead to help customers with the digitalisation of their wealth businesses, thereby future-proofing their models and allowing them to expand at scale. Embedded wealth offers huge potential in a market such as Indonesia, where 79% of investors are younger than 40 and where millennials and Gen Zs are driving robustly rising demand.

Key Takeaways from Pieter’s Talk:

Looking at the Indonesian market, additiv’s research indicates a young and rapidly expanding demographic, with millennials and Gen Zs driving the wealth market in the years ahead. Indeed, some 57% of private investors are in the 18-30 range and a total of 79% 40 or below.

Not just in Indonesia, but across the world, there is a change in the infrastructure, there is a change in the value chain, there is a change in how the companies are organising when it comes to financial services.  The rising trends are orchestrated finance and embedded finance, and that is starting to play out in Indonesia.

In Southeast Asia, additiv’s research demonstrates a very strong interest in non-banking providers as sources of products and services. In Indonesia, people use apps such as Gojek, Grab and other super apps, a phenomenon we don't see in Europe, or in America, for that matter.  But in Southeast Asia, the future of embedded finance, or orchestrated finance is already underway, thanks in large part to these providers.

As things stand, additiv sees that the digital banking is moving into embedded banking, embedded finance, open banking.  And the traditional (and powerful) domestic banks in Indonesia are already building their mobile banking applications and turning them into lifestyle apps, such as  Genius and Livin’. These could even in the future become separate brands in the future, aggregators that will offer a multitude of services with strong underlying financial support. 

Pieter then drilled down further into embedded finance and additiv’s offering. Embedded finance is a natural progression from the FinTech revolution; after making financial services easier to access and significantly cheaper, there is huge value in embedding them within existing user journeys and into third-party channels. For many Indonesians, this  is really part of their daily activities.

The key issue for those moving into these areas is how they achieve their goals of embedded finance. The additiv wealth orchestration platform is designed to help incumbent players of all types offer an expanded range and scope of digital wealth solutions to their existing customer base or through distributors.

A smart way forward is additiv’s market-leading and trademarked DFS (Digital Finance Suite), which is an orchestration WealthTech platform that connects regulated firms with brands looking to embed investment services into their offering. In doing so, it allows these banks and other operators to quickly launch new embedded wealth propositions as well as give them the intelligence to maximise customer engagement.

Wealth Managers & IFAs Asset Managers, Insurance Companies, Consumer Platforms, Neo-banks, all such entities can benefit in a host of areas, enhancing and integrating new or more wealth management capabilities in their digital offerings, they can increase their distribution and reach, grow and delight the customer with digital capabilities and a wide range of regulated products, increase customer life-time value and loyalty with new offers, as well as build recurring revenue streams by offering new products and investment services.

Pieter concluded that the additiv doors are always open to discussions with any party from the wealth industry, or from other business sectors, which want to explore embedded finance as a means to enhancing their business and improving their offerings to existing as well as new customers.

For further reading on additiv, please see this link to their presentation: http://pdf.hubbis.com/pdf/additiv-indonesia-wmf-2023-pres-deck.pdf

And this Hubbis article from March 2022: https://www.hubbis.com/article/swiss-wealthtech-additiv-eyes-the-riches-of-wealth-market-democratisation-and-embedded-finance-in-asia