The chat app trend continues to win converts in the wealth management space, figures show.

More than a third of Asia-Pacific millennials surveyed by research firm GlobalData contacted their wealth managers via  a chat application in the second quarter of last year, rising by 10 percentage points from a year earlier and showing how these channels are increasingly popular.

Using chat applications is one method that is increasingly used by millennials to discuss their investments with advisors, the organisation said.

This publication asked GlobalData for its survey size to judge the strength of the findings. The report said 40 per cent of Asia-Pacific people it questioned use such chat apps.

In recent months and years a number of wealth management houses have developed chat channels to drive communications for clients and advisors. These aren't necessarily used to replace human advisors but augment them and raise overall productivity.

There can be risks with using chat apps, however.

“One issue with ‘chat applications’ however, is that the wealth management firm does not own the data – the third-party messaging service does. In addition, if the advisor leaves the company so does their conversation history with the client," Oliver Wintle, associate wealth management analyst at GlobalData, said.

"Email is not ideally suited to client-advisor communication. For instance,  if at any point the client clicks ‘move to spam’ on an email, all future communications will follow the same path and end up in the recipient’s spam folder – stripping a company of engagement with the client. Consequently, wealth managers should focus on other communication channels," Wintle said.

“Wealth managers must make sure their chosen communication channels are not easily ignored by clients. Increased engagement will undoubtedly result in better customer retention – but also a higher level of client involvement with their portfolio," he added.

In October last year Citi launched virtual remote engagement (VRE) for wealth management customers in Asia-Pacific, enabling them to converse with their relationship managers anywhere. The new service developed specifically for emerging and affluent customers enables live audio, chat and video banking on Citi’s digital channels - Citibank Online and Citi Mobile. OCBC, Bank of Singapore, Credit Suisse and BNY Mellon have embraced the technology.

A report in June 2017 by MyPrivateBanking Research, the Switzerland-based firm (now owned by US-based Cutter), identified the most popular “chat” facilities used by wealth management firms. The study, titled Digital Wealth Management in Asia: Focus on China and India, analysed the strengths and weaknesses of the digital wealth management of the ten largest wealth managers in China and India. It focuses on firms' offerings to their high net worth clients and how these compare with the market’s needs and expectations.

In China, it was found that 80 per cent of wealth managers use WeChat, which is seen as the most important digital channel. Chatbots are used by four out of ten wealth managers, all of which are local players, and chatbots are intergrated into their WeChat accounts, website and/or mobile application. Also, the report found that universal banks focus on their retail client sector more than private clients when it comes to technological innovation.