The Growth & Development of Wealth Management in Asia and Indonesia from Bank DBS Indonesia’s Perspective

Bank DBS Indonesia reports that it sees the potential demand-led growth opportunities for wealth management in line with wealth growth in Indonesia.

Indonesia is projected to rank fifth in the world in terms of the number of Ultra-High-Net-Worth Individuals (UHNWI) whose assets are higher by far compared to global and Asian average. The IMF projected in its outlook that Indonesia’s per capita gross domestic product (GDP) will stand at USD5,000 in 2024, Bank DBS Indonesia said in a press release.

This means, says DBS, Indonesia’s wealth management landscape will grow in 4-5 years alongside the growth of the wealth of young investors. The main indicator of the growth of the wealth management market is the fourfold increase in the number of mutual fund investors over the past three years, from 444,945 to 1,774,493 by the end of 2019. Bank DBS Indonesia seized the opportunity to provide financial solutions based on customer needs, and to develop its digital innovation as a reliable and accessible investment platform.

However, Indonesians still tend to keep their money in time deposits rather than investing it. The Covid-19 pandemic that has caused an economic slowdown in the past few months has increased customers’ tendency to keep their money in savings and deposit accounts. That is why it is important to educate people about investment as an option to grow their wealth. To that end, Bank DBS Indonesia plays a role as a financial institution that provides education about and solutions for wealth management to help customers reach their financial goals.

Keng Swee, Executive Director, Wealth Management Talent Rotation, Bank DBS Indonesia, said: “Indonesia is a fast growing market in terms of wealth management. However, the growth has slowed due to limited access to investment and wealth management services. According to a journal released by Hubbis last September, Indonesia’s Asset Under Management (AUM) only accounts for 4% of its GDP. The figure is still low compared to other neighbouring countries such as Malaysia and Thailand, whose AUM accounts for 15-25% of GDP. Currently, Indonesia’s per capita income is USD4,100 and Indonesia needs to have a per capita income of USD5,000 to maximise wealth management potentials.”

“Bank DBS Indonesia continues to strengthen its position as a trusted wealth management partner through the commitment to providing digital innovation as a platform for customers to grow their wealth. A case in point is our recent success in incorporating foreign exchange and bonds into the digibank by DBS application. In addition, Bank DBS Indonesia will also present Unit Trust (UT) online. This innovation plays an important role in expanding and facilitating access to investment with the support of our experienced and reliable Relationship Managers and Investment Consultants,” Keng Swee continued.

Melfrida Gultom, Head of Sales and Distributions, Consumer Banking Group, Bank DBS Indonesia, said: “Through DBS Treasures priority banking service and DBS Treasures Private Client service, Bank DBS Indonesia has adopted two wealth management approaches, namely domestic and foreign investment placements as well as insurance that is adapted to customers’ financial goals. Our product series serves the needs of customers at every stage of life, from wealth development, health protection, preparation for retirement, to inheritance and children's education funds.”

To expand investment reach overseas, Bank DBS Indonesia also offers a variety of foreign investment products, including sharia investment in international markets such as the United States, Hong Kong, and China. For the next few months, Bank DBS Indonesia plans to expand the reach of investment placements to India, as well as funds that focus on specific themes, such as global disruption funds and companies that meet environmental, social, and governance criteria (Environmental, Social, and Governance / ESG).

“Responding to the challenge of facilitating access to wealth management in today's conditions, Bank DBS Indonesia offers various digital innovations so that customers can make transactions and investments anywhere and anytime. Through the digibank by DBS application, customers can do various financial transactions 24/7, such as placing deposits in 12 foreign currencies, purchasing Primary and Secondary Market Bonds, and even transferring funds to domestic and overseas in real-time. The Telephone Instruction Facility is available to facilitate various transactions such as the purchase of Secondary Market Bonds and 12 foreign currencies without having to visit a branch office. Purchasing a variety of insurance products is made simple through a video call without the need for face-to-face encounter,” Gultom concluded.