March 27, 2024

Unlocking international investment opportunities – Southeast Asia’s driver for investor growth and retention

The global investment landscape is no longer a domain of the privileged few. Technology innovations have made it possible for businesses everywhere to empower their customers with an unprecedented level of international access to investment opportunities, radically shifting people’s mindset regarding their personal financial goals. This is the case in the vibrant financial scene of Southeast Asia as well, where the thirst for international investment is palpable. Whether it’s expanding retail portfolios across US or EU stocks, or deep-diving into the rich tapestry of global asset classes, the demand is there and it’s on the rise. 

According to McKinsey, The APAC region accounts for more than 40% of global wealth and is steadily growing. The mass affluent segment for example, which holds more than 50% of the liquid assets in the region, is projected to hit US$4.7 trillion in total wealth by 2026, up from US$2.7 trillion in 2021 (Global Data). While still in its early stages, with approximately 45 percent of personal financial assets held in cash and deposits, the region is swiftly emerging as a significant player in the global wealth management sector. 

Behind the upbeat verses of robust growth forecasts and expanding investment landscape in the region, there is an underlining dramatic shift in investment patterns. Investors, from the mass market to the ultra-high-net-worth individuals, are increasingly setting their sights on opportunities abroad. The mantra is clear – the international domain offers richer returns and access to a wider portfolio range that’s simply unparalleled. According to the Global Data Asia-Pacific Wealth Management report, HNW investors in Asia-Pacific hold 43% of their wealth offshore, while the proportion for emerging affluent and mass affluent individuals in the Asia-Pacific region averages at less than 28%. Mass retail investors have only 4% of their wealth invested offshore. 

The discrepancies in the relative weight of international investments open a huge opportunity for banks, brokerages, and disruptive players to cater to affluent and mass retail investors’ increasing demand for global asset diversification. The key lies in unlocking these international opportunities through robust API integrations.

Understanding financial API’s

API, or Application Programming Interface, is a software application that allows two different digital systems to interact with one another. In investing, APIs allow companies to integrate trading and investing services without having to develop in-house brokerage expertise. We can think of them as an intermediary between the end-user applications that investors use and the brokerage servers that execute the operations.

The nature of how APIs work is to turn complex processes, such as investments, into a few lines of code, fundamentally transforming how businesses integrate new services and product lines in their offering. API integrations bring efficiency and speed, providing a window to global opportunities that were once obscured by complexity and high development costs. But what are the rewards for different players?

The Benefits of Investing API Integrations

For financial institutions: For banks and brokerages, APIs are the bridge that connects the dots between local services and global products. They empower these institutions to roll out financial offerings that keep their customers from wandering to the newer, tech-savvy players in the market.

For fintech companies: For the financial upstarts, APIs are the fuel for their innovation engines. They enable these companies to disrupt traditional finance with a plethora of user-friendly services that incorporate global investment opportunities seamlessly.

For disruptive players and non-financial businesses: Even entities traditionally outside the financial sphere stand to gain. Through embedded finance, a concept that transforms businesses into financial service points, new avenues for customer engagement and monetisation emerge. In Southeast Asia, where the rise and adoption of superapps has disrupted the industry, integrating APIs to provide investment opportunities is more relevant than anywhere else in the world right now.

For investors: The real winners are the end-users. APIs deliver the promise of faster, better, and more convenient international investment options. They empower consumers to chart their financial destinies with a level of control that borders on the revolutionary.

Velexa’s Investing API – A Gateway to Global Markets

As a leading investment technology provider, we are committed to serving the needs of our customers. Our Investing API is built for seamless integration and provides a singular point of entry to an expansive universe of investment options. With access to over 700,000 financial products from 50+ markets and an arsenal of data and liquidity providers, businesses can offer their users the ability to invest in a diverse international portfolio.

The provision of fractional shares and bonds available for key instruments in major markets, including the US and EU further empowers companies to democratise investment, making wealth-building more accessible than ever.

Beyond just the numbers, API integrations are the bedrock upon which Southeast Asian businesses can build a global investment roadmap. For companies keen to harness the opportunities, it’s time to talk about how we can help you to enable growth, secure loyalty, and leverage the sheer size of the market to create lasting financial value.