December 8, 2004
Older generations generally hold a disproportionate share of a nation's wealth. However, as Taiwan's population ages rapidly, the vast majority of the public's monetary assets remain stored away in relatively low-yield time deposit savings accounts. This being the case, banks in Taiwan see great potential in providing professional wealth management services.
Overseas banks consider
USD 100,000, approximately
NTD 3 million, the minimum for initiating wealth management services. Citibank in Taiwan estimates there are 400,000-500,000 people in Taiwan with net assets of
USD 100,000.
Banking sector statistics indicate that 75-80% of the assets of the Taiwanese public is held in time deposit accounts while only 20-25% has been put into other financial tools. Conversely, in the world's leading economies, savings account for just 30% of the public's assets. Based on these figures, bankers estimate a potential of
NTD 20 trillion in this market in Taiwan.
Council of Economic Planning and Development statistics show that Taiwan became an aging population in 1993. Taiwan is the second most rapidly aging society in the world behind Japan. By 2010, Taiwan's elderly are projected to make up 14% of the total population. This figure is expected to reach 25% by 2026.
Banks say that, as Taiwanese society ages, the need for quality wealth management services will become more urgent. Banks, looking for a part of the action, highlight concerns that older people need quality wealth management because they do not have the opportunities to make money back if they lose it through poor management or bad investments.
In the past, most financial services were provided by foreign banks in Taiwan or private banks overseas. However, the vast potential of this yet-to-be developed market has spurred domestic banks to make inroads into this lucrative market.
Taipei Bank has gained a special angle on the wealth management market through its national lottery business, which it conducts on behalf of the Ministry of Finance. Since its inception, the lottery has already created 104 new multimillionaires, whose lottery winnings add up to more than
NTD 18 billion. While the bank remains silent on just how many of these Lotto winners have become its clients, it is reported to have assigned a team of its finest financial managers to provide special services for the Lotto's nouveau-riche.
In an interesting side note, Taipei Bank has reported that a total of 174 major prize-winners have so far donated
NTD 257 million to 98 social welfare organizations or charities.
Not all of Taiwan's wealth is put into savings accounts.
(United Daily News)
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