Amanda Ong, country head of Arta Finance Singapore, says traditional private banks often lack the capacity and infrastructure to meet the evolving needs of next-generation wealth holders. This has led to increasing frustration over how their wealth is managed.
This follows the growing demand for next-generation wealth platforms powered by AI and advanced technology. These platforms can deliver smarter, more personalised financial strategies, ushering in a new era of wealth management.
“The feedback we have gotten so far is that there have not been many changes,” says Ong, noting that the way private banks have been serving family offices and ultra-high-net-worth individuals (UHNWIs) has remained largely unchanged for the past 10 to 20 years.
Traditionally, family offices depend on private banks for execution and custody services, yet many processes remain manual. Account opening still involves extensive paperwork, and trade executions often require manual steps like phone confirmations.
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“In an increasingly digital age, people might not want to speak to a banker the same way their parents have”, says Ong, adding that some clients prefer to do things entirely digitally and without the need to speak to any individual. To be sure, other private banks, such as DBS and UOB have already leveraged the use of digital initiatives including AI.
When building a portfolio around a specific theme, the family office investment team consults their advisor or private bank. A CIO leads the process, analysts gather data, and the portfolio is manually constructed in Excel, resulting in a report that can take days or weeks.
Modifying the portfolio is challenging. Any changes require repeating the manual process, making it slow and inefficient, adds Ong.
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Despite this, many private banks have shown little incentive to modernise, automate or improve these processes. Ong also notes that private banks often have high, opaque fees, with unclear conflicts of interest and hidden commissions. Typically, they charge an upfront subscription fee for private market funds or structured products, while financial advisors take commissions of 2% to 4%. In contrast, Arta Finance charges only an annual management fee with no upfront costs.
Modern solutions
Some family offices and UHNWIs are leaving private banks and seeking modern solutions as providers fail to adapt to their evolving needs.
Arta Finance is one platform seeking to fill the gap for UNHWIs and family offices. Backed by Peak XV (formerly SequoiaCapital India and Southeast Asia) and the Economic Development Board Investment (EDBI), Arta Finance uses AI to streamline investment decision-making, engage with clients and monitor portfolio performance through its patent-pending technology, Arta CoPilot, which the company claims is the first of its kind.
A key component of Arta CoPilot is the investment CoPilot, which lets members create themed portfolios in minutes instead of the week it used to take.
The investment CoPilot presents a personalised list of stocks that align with the particular theme, along with an explanation of why each stock was chosen. This is supported by a full breakdown of the research, including sector and industry factors, as well as a strengths, weaknesses, opportunities and threats (SWOT) analysis of the theme.
Ong says Arta Finance’s streamlined process enables quick portfolio creation and client presentations. To do this, Arta Finance has trained its large language model using data from the US Securities and Exchange Commission (SEC) filings, financial journals, media, and other trusted sources to create its investment CoPilot. Ong emphasises that these are reliable sources, with data the company cannot manipulate or falsify. “It is almost like you have your own CIO team of analysts to do this research for you,” she adds.
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Another key feature of Arta Finance’s AI is its portfolio recap, which offers a detailed summary of an investor’s performance over the past day, week or month. This feature helps investors understand the drivers of their portfolio’s performance. Arta Finance examines not just ETF-level performance but also delves into individual stocks within those ETFs, pinpointing which have had the greatest impact on the portfolio.
Additionally, this data can be tailored to suit an investor’s preference, with formats customised for Gen Z or the older generation. Arta Finance’s use of AI and technology sets it apart from traditional banks, especially in its fee structure. By using technology, Arta Finance reduces the cost of delivering products and services to clients.
This is especially relevant for single-family offices with lean operations, typically led by a principal and one or two individuals managing their investments. From an investment perspective, Arta Finance supports these family offices with execution and custody, consolidates their investments and provides a platform for complete portfolio monitoring.
“It is a more cost-effective option than what they have been getting with traditional private banks. And also, we allow them to do so in a very digital way because they do not have massive operations,” says Ong.
