FNZ and its role in helping wealth management firms reinvent themselves in the new world of investing

Only recently, new global analysis from a research coalition comprised of FNZ, ThoughtLab and Deloitte, and including views of 250 wealth management firms and 2,000 investors, showed that by 2028, the global investment industry will look very different, with digital innovation and artificial intelligence (AI) essential ingredients of future success.

The report predicts that technological, regulatory, competitive, demographic, and economic shifts will redefine investor expectations and reshape the wealth industry. In response, the wealth industry is making technology a core competence, with almost all providers intent on rolling out a modernised, cloud-based end-to-end wealth management platform that digitises and automates operations, delivers cost savings, creates innovative new business models, builds scale, opens the door to new and better services, and thereby helps win clients and generate new revenue streams.

With this report quite newly minted, Hubbis met with Joanna Tang, Managing Director for Asia (excluding Japan) at FNZ, where she focuses on the impact of scalable technology and operations in wealth and asset management. Her insights focused on the vital importance of technology transformation in leveraging end-to-end platform solutions to enhance personalised wealth services and efficiencies at scale. She explained how FNZ is rapidly building its technology and operational capabilities in Asia, with Singapore, Hong Kong, wider ASEAN and Japan as key markets.

Founded in 2003, FNZ provides a comprehensive end-to-end wealth management platform that integrates modern technology, business and investment operations. All in a regulated financial institution. She reports that FNZ now manages about USD1.5 trillion in assets under administration and partners with over six hundred financial institutions globally, on behalf of 24 million end investors. The company boasts a significant presence in the UK, Europe, North America, Africa and the Asia-Pacific region, including expansion into Greater China. FNZ’s approach combines world-leading innovation and technology with local business knowledge. It is regionally regulated with regional CEOs, data centers and operations across over 30 countries.

As the Managing Director for FNZ Asia (excluding Japan), Joanna oversees all aspects of FNZ's operations in the region and is responsible for the company's profit and loss. Her role involves driving business expansion and market development, ensuring the successful onboarding of financial institutions onto FNZ’s platform, and increasing FNZ's revenue through new client engagement, supporting existing customers, and delivering ongoing enhancements to the platform. She highlights the importance of growing client assets under administration (AUA), which directly contributes to FNZ's revenue through service fees based on assets under administration. This model aligns FNZ’s success with that of its clients, sharing both growth benefits and potential risks.

Expanding footprint in Asia

Joanna details FNZ's strategic approach in Asia, focusing on asset management and direct distribution channels tailored to emerging markets like Malaysia, Thailand, and the Philippines. FNZ's technology supports wealth & asset managers in leveraging digital platforms for product distribution to a young Asian demographic engaging in frequent, low-value transactions. This system is essential where traditional banking investment distribution networks are weak, allowing FNZ to provide scalable solutions for mass affluent segments and help wealth firms enhance direct customer engagement at an individual level.

Digital transformation is essential

She points to the need for comprehensive technology transformation across all operations in wealth and private banking in Asia. As the region's wealth grows, especially among younger, affluent demographics, there is a rising demand for a more diverse array of investment products, including mutual funds, equities, and private and alternative assets, as well as digital assets.

This demand is driving a convergence of private and premium level banking, as more of these banks aim to serve the mass affluent market segment more efficiently.

“FNZ's technology enables faster onboarding and allows customers to manage their investments with minimal reliance on relationship managers, broadening access to a wider range of investment options and enhancing service efficiency for this segment.”

Elevating the proposition

Joanna discusses FNZ's role in streamlining wealth management technology across Asia, including in mature markets like Singapore and Hong Kong. “We consolidate various legacy technologies and data sources into a single platform, reducing the complexity for banks,” she says. “This allows them to rely on FNZ as a unified technology and operational provider, enhancing data integration and reporting. As a result, banks can offer customers a comprehensive view of their financial statements, including investments, deposits, and credit activities, all through FNZ’s platform.” In tandem this gives FNZ’s customers control – eradicating inefficiencies, minimizing risk and enabling them to focus on what they do best - customizing customer experience and innovation at a lower cost to savers. FNZ’s research indicates that, by outsourcing middle-office and operations functions, wealth and asset managers can realize operating cost savings of up to 30% compared with more traditional approaches.

She also identifies securities houses as a key client segment for FNZ, noting their shift from traditional equity trading, where margins are under such pressure, to broader wealth management services. FNZ helps these firms in expanding their offerings to include mutual funds, robo-advisory, and financial advisory services by providing a platform that consolidates these services. “We help them fast track their offerings towards wealth management to better monetize their substantial customer bases and their brand reputation, enhancing their ability to offer holistic wealth solutions more efficiently,” she says.

Three key client segments – all growing apace

Joanna then summarises this as the three key client segments for FNZ in Asia. First, the banks, where there is an evolving overlap between premium and private banking sectors. Second, asset management firms are increasingly reaching out directly to consumers. Third, she highlights securities firms that traditionally focused on equity trading but are now expanding to offer comprehensive wealth management solutions to better monetize their customer bases.

Major commitment to Asia

Joanna elaborates on FNZ’s decade-long presence in Asia, underscoring the region as a dynamic growth landscape compared to the established wealth markets in the West. FNZ has multiple offices across Greater China, India, Malaysia, Singapore and Thailand having built established relationships with major financial institutions including abrdn, UOB, Aviva and Principal Asset Management. She highlights Asia’s two major economies, China and India, as flourishing economic powers with significant GDP growth. She points to the youthful demographics across Asia, particularly outside Japan, noting their high engagement with digital technologies. This younger generation has quickly adopted mobile apps, bypassing older technologies, which deeply influence their consumer behaviour, including how they access financial and investment services.

She notes the digital savviness prevalent in Asian markets, which greatly facilitates FNZ's delivery of digital transformation solutions.

Much work to be done

Despite advanced mobile app development in Asia, Joanna points out that many systems still rely heavily on manual processes in the middle and back end, describing them as "cosmetic approaches" that are not fully scalable. “There's a lot of what I can call ‘lipstick’ applications on the front end, but there is still a lot of manual work in the middle and the back, meaning that this unnecessary reliance on human support opens the doors to errors and their systems struggle to keep up with the demands for high-frequency, high-volume transactions, further underscoring the value of FNZ's robust digital solutions in the region.”

Joanna describes how FNZ seamlessly connects with its customers, enhancing the user interface and user experience while leveraging API integration for comprehensive service delivery. She emphasizes the strategic positioning of FNZ amid stiff competition:

Advice and excellence at scale

She acknowledges the existing competition but highlights FNZ's unique approach. “FNZ comes in as a differentiator, with our technology infrastructure catering for mass affluent markets able to drive scaled-up business quite quickly, offering high performance in terms of API responses, quick processing of transactions and so on."

This strategic approach, she notes, mirrors the evolution of social media in Asia, transforming from a simple communication tool to a comprehensive lifestyle platform. Joanna identifies Hong Kong, Singapore, Malaysia, Thailand, and the Philippines, along with Japan and Indonesia, as FNZ's priority markets in Asia for the next two to three years. These markets represent key focus areas for FNZ's expansion and operational strategies in the region.

Scalable tech

She also stresses the critical role of FNZ's scalable technology platform in handling high-frequency investments from a vast customer base. She notes: “That plays a very important role when you have millions of customers in the front trying to pull money or invest money into mutual funds on a very frequent basis. We also combine technology with operational services, offering flexibility for offshore markets like Hong Kong and Singapore. This is particularly valuable for foreign entities looking to enter these markets without massive setup time cost and effort, allowing them to focus on front-end business while outsourcing technology and operations.”

Joanna notes the fragmentation of information delivery in digital platforms for wealth management in Asia, highlighting the inconvenience for customers who must use multiple portals to log in and view their financial portfolios. This fragmentation of data and reporting affects not only the user experience but also the efficiency of relationship managers (RMs) and advisors who face high operational costs. “We aim to consolidate these services into a single, holistic platform, enhancing productivity for RMs and potentially increasing assets under management by making financial advisory accessible to more customers.

The FNZ X-Factor

Joanna points to FNZ's solution to enhance these digital advisory services at scale through a product called FNZ X-Hub. This uses sophisticated algorithms to provide tailored investment advice to users, even if their assets under management (AUM) fall below typical private banking thresholds. The X-Hub offers automated, goal-oriented portfolio recommendations based on personal financial goals and family situations, with options for rebalancing upon customer confirmation or discretionary management. This technology allows for efficient financial advisory without the need for intensive, one-on-one consultations.

Building robustly

Joanna expands on the firm’s presence and commitment in Asia, noting their continuing strategic investment in digital engineering and additional operational capabilities, with about 300 engineers in their Shanghai Solution Centre, a major commitment demonstrating the core competency and commitment to winning in the Asia market through effective execution and local support. Further strengthening its presence, FNZ is establishing a solution/testing centre in India and an operations centre in Kuala Lumpur, which is set to quickly ramp up to hundreds of personnel.

“These centres of excellence not only support our global business but also enhance our service delivery to Asian clients, ensuring we can deliver the platform and support they need,” she states. “Customers can see our major commitment to the region, with our hub-and-spoke model underscoring FNZ's dedication to providing comprehensive and responsive services across the region.”

Key Priorities

Joanna outlines FNZ's strategic vision for the next two to three years in Asia, highlighting the Group’s ambition to continue to work in partnership with customers across all elements of financial services to simplify, automate, and innovate, removing friction and enabling customers to create personalized and scalable end-investor experiences.

She emphasises targeted growth and innovation across several key areas. She highlights the primary focus as the expansion and digitalization of their transfer agency (TA) services. This involves developing a modular and digital platform to support TA at the retail level, facilitated by a centre of excellence in Kuala Lumpur. This strategic initiative is designed to enhance the platform's capabilities within the region and expand its use among asset management firms, thereby growing FNZ's footprint in the Asian market.

The second strategic priority involves targeting growth in the sectors of premium and priority banking, particularly in emerging markets like Thailand and Malaysia. This recognises the blurred distinctions between these banking segments, as they often offer similar financial products. “The goal is to expand FNZ's platform to effectively serve these segments, enhancing operational services tailored to the needs of private banking,” she explains.

She says FNZ's third strategic priority in Asia involves leveraging a partnership with fund management group Abrdn to develop a digital wealth platform tailored for IFAs and family offices. This collaboration aims to build on the two firms’ long-standing, successful partnership in the UK. The focus is to implement a fully functional digital platform in Hong Kong and Singapore that supports rapid onboarding and scalability for these under-digitized sectors, enhancing their operational efficiency and market reach.

Growing at pace in the region

FNZ’s strategic initiatives are perfectly aligned to help facilitate the rapid evolution of the wealth management industry in Asia. By consolidating digital platforms and enhancing service models, FNZ not only aims to simplify the investment process but also to empower wealth management firms to meet the future with robust, scalable solutions. “Our comprehensive and proactive approach, our range of offerings, our wealth industry knowledge and our advanced technology ensure that FNZ stands as a critical player in shaping the future landscape of wealth management in Asia,” she concludes.