We republish this commentary from one of the most senior figures at the data, business information and news service for the Asia region.

The following editorial comment comes from Sunny Chhabria, deputy head of Asia, [tag|Bloomberg">Bloomberg, the news, data and business information service. The editors at WealthBriefingAsia are pleased to share these comments. The usual editorial disclaimers apply to views of outside contributors. By all means respond and jump into the debate! Email the editors at tom.burroughes@wealthbriefing.com and jackie.bennion@clearviewpublishing.com

Near-zero interest rates during the pandemic pushed the global wealth management sector to hit new record highs of $110 trillion in assets under management (AuM) in 2021, with potential for wealth management to grow further as the Asia-Pacific region saw a surge in digital wealth management tools in banks. Investors are flocking to a stable income-generating strategy to achieve higher returns on their cash. Meanwhile, younger and digital-savvy investors are seeking accessible wealth products - a trend that cannot be ignored as Millennials now form the majority of the workforce and will make up 75 per cent of the global workforce by 2025. 

“I want it now, I want it fast”
This group of investors seek seamless and instant experiences, even in wealth management. As banks compete for Millennial clients and seek to increase customer “stickiness”, some are hampered by legacy systems which impact the speed of customer service. Increasingly, wealth managers are seeking to reinvent the relationship manager model by turning to technology, particularly for fixed income and structured products. 

Even though human interaction will undoubtedly continue to underpin client relationships, automation is becoming an enabler of the faster, more accurate and cost-efficient services which will appeal to this rapidly growing but under-served group. Finding the right balance between digital efficiency through automation and the human touch will accelerate growth opportunities for private banks as they reconstruct their back, middle and front-end systems. 

Unlocking access with automation
While income-generating mandates remain an integral part of portfolios for private banking clients, unlocking access to bonds and structured products has not always been a seamless process as the sell-side continues to rely on a largely voice-led workflow. Digital execution of structured products bookings and fixed income trading rank the lowest among other wealth management offerings like FX trading, equity trading, and ETF trading in Asia-Pacific, according to a KPMG report.

The industry is, however, aware of this gap and is working hard to close it. Price discovery, being the first step in the bond trading workflow, should be the first to be automated to help investors make better choices. A sell-side fixed income survey conducted by WBR Insights on behalf of Bloomberg showed that 66 per cent of respondents’ fixed income trading desks were planning to increase trades executed by automation by at least 30 per cent in the next 12 months from September 2020. 47 per cent of respondents said that the pandemic would accelerate digitisation of manual processes and increase levels of automation in sell-side firms.

Two of the biggest growth drivers for Asia Pacific’s $5.9 trillion fixed income market will rely on technology innovation in electronic trading and growth in wealth and asset management, the survey revealed. 

Perennial challenge for private banks 
Private banks face a challenge because their trades are typically small. However, similar to larger banks, retail or odd lot trades – which are common among private banks in the region – they are also rule-based. This means that private banks have enough electronic liquidity to tap into, and can naturally automate the trading and execution of these trades.

Relationship managers will surely continue to be at the core of the wealth management industry, especially in the UHNW segment. Yet, it is digital tools and automated delivery that will elevate and transform the advice delivery model of today. An omni-channel model, combining the relationship manager’s expertise and human touch with the efficiency, convenience and scalability of automation, will cater to the growing demand for quicker, seamless experience that investors expect.

Bloomberg is accelerating automation on the wealth management front so that leading banks in Asia can move to higher-value customer interactions, unlocking access to global investors, and connecting markets to markets, people to markets and people to people. It is working with private banks to automate their know-your-customer processes with predictive analytics, order management processes for bonds and structured products, and research management processes so that they can offer more sophisticated advisory services.

Banks can no longer remain status quo and miss the opportunities that digital offerings can bring. Automating workflows to provide the modern relationship manager with near-instant access to accurate data for pricing and execution will be essential. Today, they can luse plug-and-play solutions to help them evolve their services without having lengthy bespoke technology stack builds. Technology will not only free up wealth managers’ time by automating their more mundane tasks, it will be transformational. It will make them proactive rather than reactive, enabling investors to access new global markets. 

About the author
Sunny Chhabria is deputy head of Bloomberg's financial information and enterprise business in the Asia-Pacific region. He is responsible for the firm's business and product strategy in the region and leading teams in Singapore/ASEAN, Australia/New Zealand, India/South Asia and Japan. His experience lies in enterprise data, banking technology and emerging markets, having worked with leading buy-side firms, banks and corporations across the region. Prior to his current role, Chhabria was the APAC head of Bloomberg's enterprise data business based in Hong Kong. He managed a team of data specialists, helping financial institutions solve complex data problems - from acquiring data to managing, distributing and integrating data across the enterprise.

Chhabria has extensive experience in this region, having spent time with Bloomberg in Mumbai and Dubai from 2009 to 2018, spearheading the firm's business development and key customer relationships across the India sub-continent, the Middle East and Sub-Saharan Africa. 

Before he joined Bloomberg, Chhabria was with PwC Consulting in Mumbai. He has an MBA from the Indian School of Business and is a Chartered Financial Analyst.