Avaloq survey reveals growing importance of social media and digital communication for investors in Hong Kong and Mainland China -- despite lingering compliance concerns
A recent investor survey by Avaloq shows that social messaging services such as WeChat and WhatsApp are a commonly used method of communication with financial advisers in both Mainland China (51%) and Hong Kong (39%). Among those investors not already communicating with their adviser on social media, 74% of respondents in Mainland China and 58% in Hong Kong would be interested in doing so if they knew that their conversations were fully private and secure.
From the perspective of banks and wealth managers, this trend towards conversational banking can pose a compliance headache, according to Avaloq. Relationship managers therefore need a secure platform that facilitates instant messaging with clients on popular social messaging apps while ensuring privacy and compliance with record-keeping requirements.
While the survey confirms the position of industry professionals as a trusted source of information for 66% of Mainland investors and 50% of Hong Kong investors, new data sources are catching up fast: 36% of respondents in Mainland China and 45% in Hong Kong consult social media when deciding how to invest.
Advances in mobile technology have greatly enhanced access to portfolio information and frequency of communication. 41% of Mainland Chinese investors and 27% of Hong Kong investors say that they engage with their investments at least once a day, with a further 41% and 45%, respectively, consulting their investments at least once per week.
Similarly, in the affluent to ultra-high net worth (UHNW) segment, 72% of Mainland Chinese investors and 39% of Hong Kong investors contact their adviser at least once per week. And if an adviser fails to communicate frequently enough, this is a reason for 43% of affluent to UHNW investors in Mainland China and 34% in Hong Kong to consider switching.
Pascal Wengi, Managing Director for North Asia at Avaloq, said, “We have seen financial services in Mainland China and Hong Kong moving rapidly from branch to browser, and now to mobile app and social media. Frequent communication on digital channels is essential to meet the high expectations of investors. Banks and wealth managers need to ensure a high degree of digital security and privacy – in addition to an engaging and intuitive interface – to help more investors make the switch to digital communication channels. There is huge potential for growth as the financial markets of Hong Kong and Mainland China become more integrated, especially following the launch of the ETF Connect scheme. Our research shows that 78% of investors in Mainland China and 41% in Hong Kong are considering opening an account with a new financial provider in the next year. Now is the ideal time for financial institutions to reassess their wealth management platform, strategy and cross-boundary reach. At Avaloq, we are committed to digitalization to help financial institutions stay at the forefront of innovation and address the changing needs of investors. We conduct frequent investor surveys and research to help financial institutions keep up with the latest industry trends.”