KUALA LUMPUR – After 20 years of continued growth, the pandemic is pushing Southeast Asia’s wealth to an inflection point, and the financial services industry needs to keep pace with the change, according to comments from HSBC on September 8.
Over the past two decades, Asia has almost tripled its share of global wealth, from 9% in 2000 to a quarter today. And within five years, ASEAN will also have 120 million middleincome households, roughly double its number in 2010.
However, significant structural and cyclical shifts in society – accelerated by the COVID-19 pandemic – are changing how wealth is understood, preserved, and passed on to future generations.
HSBC is observing three emerging wealth trends for Malaysia
1) Whilst data suggests that Asia’s wealth has remained fairly resilient, economic downcycles are impacting employment and income security. HSBC is also seeing gaps in customers intergenerational wealth transfer plans with customers dipping into current savings which will inevitably impact what they pass on.
2) Digital banking is expected to grow by more than 20% annually through 2025; however, there remains risks that individuals, who lack the necessary financial or digital literacy, are at risk of falling behind. Malaysian consumers need to be equipped with a higher level of digital literacy to improve access to wealth literacy and wealth creation solutions that will be fundamental to the growth of their personal wealth.
As more processes become automated and financial institutions are using financial technology to deliver financial services to consumers and businesses through digital devices, people need to have a digital-first, growth mind-set to thrive and grow their personal wealth.
3) HSBC is observing the increasing interconnectedness and interplay between financial, physical and mental well-being. A 2021 HSBC survey of over 10,000 participants found that 75% of respondents felt their mental health and financial position are connected.