"But Arora, now the founder of Singapore-based fintech platform Syfe, quickly realized that following his mother's advice meant his money "did absolutely nothing." "We have quite a heavy culture of saving," Arora says, citing Asia's often unstable economic and policy history. But inflation and low interest rates end up eroding the value of household savings. "Over time, the $100 you put in the bank doesn't become $101, but effectively $98" due to the effects of inflation."
"Strong stock market performance is also driving a new wave of retail investors across the Asia-Pacific. "Asian households are slowly dipping their toes into stock markets," HSBC economists wrote in a Jan. 9 report, though noted that "overall equity investment remains quite low." The bank predicts that a steady shift from low-yield cash to higher-yield investments will mean "more money will continue to rotate into equity markets over the next few years," reducing a reliance on foreign investors."
Many Asian households traditionally keep large shares of net worth in cash, sometimes up to half, due to economic and policy instability and a strong saving culture. Inflation and low interest rates erode the real value of cash savings over time. Rising wealth and strong stock market performance are prompting more retail investors across the Asia-Pacific to explore investment options. A steady rotation from low-yield cash into higher-yield investments and equities is expected, which could reduce reliance on foreign investors. Fintech platforms now offer cash management, managed portfolios and trading tools to help households grow wealth and deploy savings.
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