JAKARTA – OCBC, Singapore’s second-largest bank by assets, said that demand for wealth management services is rising in Indonesia, driven by wealthier folks and increased awareness about financial planning.
OCBC Indonesia director Johannes Husin said a growing middle-class population with increased disposable income and seeking professional guidance for wealth management is driving the demand.
There is also increased awareness among Indonesians about financial planning and investment diversification, while the younger generation’s preference for digital solutions also leads to the emergence of online wealth management platforms, he said.
“In the past few years, we have seen that deposit funding, assets under management, with regard to investments in the Indonesian market, have grown significantly. It is proof that the efforts by the Indonesian regulators to deepen the financial market are working effectively.”
Speaking to The Straits Times at Fairmont Hotel in Senayan business district, Mr Husin said the “new riches” in Indonesia rose sharply in the past few years.
This was accelerated by the Covid-19 pandemic, where a lot of money was saved up, he said.
The funds that were saved up are being put to use for business development, he added, noting that Indonesia presents substantial investment opportunities, particularly due to its abundant natural resources and its large, young and educated population – a key driver of both the workforce and consumer market.
The number of super rich is also growing.
Mr Husin said Indonesia’s ultra-high-net-worth population grew 4.2 per cent from 1,420 in 2022 to 1,479 in 2023. The figure is expected to surge to 1,984 by 2028. These were figures from a Knight Frank wealth report published in 2024.
He said OCBC is poised to target the newly minted wealthy individuals, with its private and premier banking services.
The bank, amid competition from other banks in Indonesia, wants to make its offerings more compelling to clients. Mr Husin said OCBC Indonesia’s private banking unit collaborates with Bank of Singapore, the private banking arm of OCBC Group, in the form of sharing of best practices, market insights, trends and training.
To provide a better private banking experience for high-net-worth Indonesian clients, the bank maintains a relationship-manager-to-client ratio of no more than 1:65, said Mr Husin.
“This is to ensure that our bankers can foster close, personalised relationships with each client. This enables our relationship managers to not only address immediate banking and investment needs but also provide holistic advice for long-term legacy planning,” he said.
He noted that many Indonesians opt to keep their money onshore, amid the government’s push for onshore retention of earnings.
This could create more opportunities for domestic firms to win clients over and grow onshore wealth management.
“Being OCBC Indonesia, we are well positioned to capture this… because a lot of Indonesia clients still prefer to have the money onshore,” he said.
The bank’s wealth planning services involve assisting private banking clients in legacy planning for their onshore assets.
“We expect more support to come from the regulator side. It is important when Indonesia wants to grow… and it’s best to keep the capital onshore, and we are very much in the middle of it.”
OCBC Indonesia taps group synergies to provide a better banking experience. Those under the group’s umbrella include asset management company Lion Global Investors, insurer Great Eastern and stockbroker OCBC Sekuritas, the last of which provides access to Indonesian capital markets products.
The bank also offers premier banking services for affluent individuals such as professionals and business owners who want to accumulate wealth and enjoy the convenience of doing local and overseas transactions.
“For business owners, we want to make sure that our banking capabilities from the business banking side can also be enjoyed by them. We want to make sure that whatever wealth they put with us can be fully monetised in case they need capital,” Mr Husin said.
He added that the consumer banking team works closely with the business banking team to make sure that clients can satisfy their needs without having to go to competitor banks.
Meanwhile, the bank has seen a significant number of personal banking clients moving to premier banking within a few years.
“It is about completing the life cycle of the financial journey and that’s why it is important to create a fairly unique value proposition for each segment so that when they move to the next level, they can feel the difference and develop loyalty.”
OCBCPrivate banking/Wealth managementBanks and financial institutionsIndonesia