The Jakarta Post
Publicly listed Bank Central Asia (BCA), Indonesia’s largest private bank by market capitalization, is expanding its wealth management services as interest in investing continues to rise, eyeing customers with smaller account balances.
Most of the bank’s current wealth management were high net worth individuals (HNWI) from among its priority banking customers, said BCA senior executive vice president for wealth management Christine Setyabudhi. She added that the bank had Rp 55 trillion (US$3.89 billion) in assets under management (AUM) from bonds and mutual funds in September.
“This figure is up 40 percent compared to last year,” Christine said on Oct. 8 during a press conference in Jakarta.
Wealth management services contributes 5 percent to the bank’s revenue.
BCA president director Jahja Setiaatmadja said the bank had around 150,000 customers in the BCA Priority program for customers with a minimum account balance of Rp 500 million, while 3,000 customers were registered with the BCA Solitaire program (minimum account balance of Rp 10 billion).
BCA has 18 million total customers.
The country has been seeing a growth in retail investors, with the latest data from the Central Securities Depository (KSEI) showing 2 million investors with single investor identification (SID) licenses in the first semester of 2019. Of this figure, 1.9 million are mutual funds investors, while the rest are stock investors.
BCA has developed the Welma mobile application to encourage customers with smaller account balances to invest. Similar to fintech apps, Welma enables BCA customers to invest in instruments like mutual funds and government retail bonds using their mobile phones.
Currently, Welma is available on Android smartphones and will be available to iOS phones next year.
“Through the [Welma] app, we hope we can reach out to all our customer segments to manage their wealth by investing their money in these instruments,” said Christine.
She said the initial phase of the app only catered to transactions in retail government bonds, and already offered the ORI016 bond series. Next year, the Welma app would be developed further to enable customers to buy mutual funds and insurance products.
The app would eventually facilitate bond trading in the secondary market, so BCA customers could freely sell and buy bonds.
“As Welma is still very new, we have not set any specific increases for the AUM or the fee-based income from it,” said Jahja.
Christine said that BCA's wealth management services would maintain its current AUM growth rate of 40 percent to the yearend, following Welma's launch.
Although BCA appears committed to developing its wealth management services, the bank has yet to express any interest in partnering with overseas asset management firms, like the partnership state-owned lender Bank Mandiri has formed with Swiss private bank Lombard Odier.
“We’re open to advice in this business, but we’ll develop [our] wealth management [services] on our own,” said Jahja.