The wealth of affluent and mass-affluent segments in Asian economies has reached a turning point. A McKinsey analysis has revealed that the wealth pool of this group is projected to hit $4.7 trillion by 2026, up from $2.7 trillion in 2021, thanks to the rise in their incomes. This development has created a new market opportunity for banks and asset managers, The Financial Express (FE) reported.
It is important to note that "mass affluent" is a term used to describe a prosperous household earning an annual income of more than $75,000 and holding between $100,000 and $1 million in investable assets. The mass affluent are usually employed in white-collar jobs and have substantial savings.
For banks and wealth managers, the potential incremental revenue from serving these clients will be somewhere between $20 billion and $25 billion, contributing more than half of the industry’s revenue growth in Asia over the next three years, FE reported.
McKinsey’s latest report about digital and AI-enabled wealth management for mass affluent customers in Asia reported that over a third of affluent customers in India have said that they prefer a self-service digital platform for managing their wealth, coupled with the need-based facility of human advice.
Additionally, more than half of those who said they prefer a self-service digital platform already have relationships with at least one advisor, the report said, according to the survey of 2,400 respondents.
Given the size of the affluent and mass affluent segments in India, the results presented in the survey are significant. This is particularly true for large developing economies like that of India. This brings a new market opportunity for those involved in the business of money management.
