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Capturing the multi-trillion dollar asset management opportunity in Southeast Asia
Against the backdrop of shifting market dynamics, the asset management opportunity in Southeast Asia (SEA) remains significant and is expected to grow to USD 3.5 to 4 trillion in assets under management (AUM) by 2025, with more than half of it being sourced from the institutional segment. Asset managers who want to win in this region need to be prepared for the challenges emerging from market trends while focusing their strategies on unlocking and capturing new opportunities.
Three trends, specific to SEA, have been identified as key for asset managers in the region: emerging demographic trends indicating growth potential (specifically, the rise of digital natives and rapidly aging Asian populations), the opening up of new pools of AUM and the growing investors’ demand for product differentiation. These trends threaten to disrupt the traditional model of growth for asset managers, namely a product-centric strategy, and call for a more holistic and innovation-driven business model.
While several models of innovation exist, it is increasingly critical for asset managers to integrate multiple types of innovation, beyond just product innovation. Specifically, the Ten Types of Innovation® can be leveraged across offerings, experience and configuration in enabling asset managers to effectively capture new opportunities and mitigate challenges posed by emerging trends in SEA.
As growth opportunities globally become progressively narrower, SEA with its mix of mature, emerging and frontier markets could be of interest to asset managers. It will be imperative for asset managers to augment their business models through innovation to take into account the big shifts expected in this region, to achieve sustainable growth and to position for market leadership.