Banks and Fintech: Competition for Wealthy Clients Is Intensifying

According to some estimates, in the Asia-Pacific region, individuals with high net worth (HNWI) and ultra-high net worth (UHNWI) (in the latter case, usually over $50 million net) currently own assets worth $21.7 trillion. This is a significant amount, for the management of which competition is unfolding between banks and fintech.

Fintech platforms are increasingly entering the Private Banking sphere, they are pulling clients who were traditionally in the classic investment sector. In Singapore alone, there are about 40 fintech companies working with the HNWI and UHNWI segment.

If you look at the PRC, the valuation of the entire fintech business in 2024 is $4.59 trillion. The compound annual growth rate of the fintech industry in China in the coming years, until 2030, is expected to be at 13.8%, that is, this industry is developing at a rate almost three times faster than China's GDP is growing.

Of course, banks are responding to this trend by introducing fintech. It was obvious to me several years ago that new technologies would play a very big role in finance. Therefore, when I took over as Chairman of the Board of Directors at Otkritie Broker in 2017, I began to actively implement fintech solutions.

This week, for example, we talked about the phygital strategy of one of the large foreign banks, when 9 out of 10 HNWI clients use its mobile investment app. In the Otkritie ecosystem, we came to the active use of our app by investors by the end of 2021.

Yes, if we talk about the phygital strategy, that is, the combination of personal and digital communication channels, this is a really significant point. But it is important to always understand how to ensure the most effective mix. The physical presence of many banks is declining around the world. For example, this week, Lloyds Banking Group, the largest provider of mortgage loans in the country, plans to close 136 branches in the UK by March next year.

At the same time, I have always seen the need for a balanced approach to building a phygital strategy, and this is no less relevant now. The fact is that the global age structure of the population is now shifting towards an increase in the share of people over 60. This is felt both in the overall demographic dynamics and in the HNWI and UHNWI segments. In the next two years, the share of the 55+ category among the clients of global investment banks will be at least half. At the same time, fintech platforms will also have a large and growing share of young people.

In general, it is necessary to ensure the comfort of working with investments for HNWI and UHNWI people in a wide age range. And this means the need to constantly think about increasing investment inclusivity. Not everyone is comfortable visiting physical offices, but at the same time, it is necessary to constantly monitor that digital solutions are understandable and convenient for any client.

The landscape of investor services is currently actively expanding. More and more players are coming, and the range of investment products offered is growing. Thus, on January 29, a company associated with the 47th US President Donald Trump, Trump Media and Technology Group Corp., announced a move towards fintech. The organization is now ready to start providing financial services, and as part of the updated investment strategy, it is starting to work with exchange-traded funds (ETFs) (including ETFs on Bitcoin and Ethereum), bitcoin and other cryptocurrencies.

The arrival of Trump Media and Technology Group Corp. in the world of fintech is a landmark moment. Given all the circumstances, the organization in the United States is one of the key trendsetters in North America. It will not be surprising if we see more moves towards fintech in the near future from the world's largest investment fund BlackRock, investment banks Morgan Stanley and Goldman Sachs. At the recent World Economic Forum (WEF-2025) in Davos, the heads of these structures focused on trends in the development of artificial intelligence (AI). And this is a really important point.

AI will lead to a strong shake-up of the fintech sphere. AI strengthens the trend towards blockchainization of financial services. I foresaw this several years ago, when Otkritie Broker began to implement elements of AI along with the use of blockchain principles - then it was a new phenomenon, and in many ways we became leaders not only in Russia, but also in the global segment of Private Banking and Private Equity. Now this is being done by an increasing number of participants in the fintech sphere - both classic investment institutions and startups.

New technologies, of course, will force everyone to reconsider their strategies for working with investors. This is inevitable, since it is necessary to reformulate your position in the world of investment services, adjust the communication component of the brand. To do this, you need professionals who are ready to do this effectively.