New Delhi: Increased competition and rising demands of clients are changing the approach of private entities towards wealth management, which has huge potential in developing markets such as India and China, says a study.
A PwC Global Private Banking and Wealth Management study conducted among 275 institutions from 67 countries found that wealth management continues to be a lucrative business with untapped potential for significant growth if institutions can be agile in adapting to meet changing demands.
It also reveals that the impact of new regulations and more demanding client expectations are forcing private banks and wealth managers to change their client service infrastructure and the way they operate. Those who can master, change will be in a position to win increased market share and lead the industry.
The survey found that global financial crisis and recent scandals changed the DNA of wealthy clients.
Clients now have higher expectations of service and value; they are more active in managing their financial affairs; and they are paying increased attention to their wealth manager’s performance and reputation in regulatory compliance and risk management.
In the Indian scenario, PwC India associate director (Financial Services) Robin Roy said: “China and India are among the biggest with middle-class populations predicted to swell by hundreds of millions over the next decade. The new middle classes will seek out investment opportunities as their attention shifts from basic subsistence to stabilising and growing income.”
He further said, “while political and regulatory risks can be significant in these markets, the decline of state-owned entities, abundant natural resources and economic reform agendas will spur economic activity, establishing the conditions for wealth creation.
The study said that wealth managers will need to diversify their client bases while increasing their awareness of non-traditional, high-growth emerging market countries.
Regulation has become the not so invisible hand, increasing the cost of operations while greater operational efficiency and effectiveness are required, not just to compete but to survive in the changing market place.
The study said that standing still is no longer an option and institutions must now quickly adapt or face being left behind.