Private bankers in Hong Kong and Singapore had their wings clipped by the pandemic, thwarting their pursuit of millionaires scattered across a region where wealth is growing faster than anywhere else.

For most of the year, relationship managers in two of the world’s largest centres for cross-border money management haven’t been able to freely travel to China and around Southeast Asia to meet new prospects and verify ownership of private yachts, property and more. They’ve focused instead on a trading boom among existing clients.

But the shrinking pipeline is an increasing worry as Covid-19 flareups in the region keep them largely grounded, say executives and relationship managers. Already, the likes of UBS Group AG and JPMorgan Chase & Co. have seen the growth of new money in Asia take a hit. And while regulators are easing rules that typically require in-person meetings and on-site visits, banks are still catching up with digitization and some bankers are reluctant to step away from the traditional checks.

“The challenge is the majority of private bankers’ business in Asia is coming from offshore,” said Benjamin Quinlan, chief executive officer of Quinlan & Associates, a strategy consultant in Hong Kong. “To service clients from another country, you need some physical travel.”

More than half of the assets managed in Hong Kong and Singapore are drawn from outside the two hubs. New relationships for private bankers are often nurtured over months of meetings. On top of that come the regulatory requirements to prove client identities and verify sources of their wealth.

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Within the wealth business of UBS, Asia contributed just US$200 million ($273.2 million) to its US$9.2 billion net new money in the second quarter, down from US$1.1 billion a year earlier. But the region was still its second biggest in terms of profits, buoyed by trading. JPMorgan’s number of new private banking clients in Asia dropped more than 10% in the first half from a year earlier, even as brokerage activity increased more than 50%.

A Shanghai-based executive at a Chinese wealth manager, who asked not to be named discussing a private matter, said new offshore clients fell more than 30% in the first half from a year earlier. A Singapore-based regional head for a European private bank said he hasn’t been able to bring in any new customers since February.

Private banks require anything from US$1 million to more than US$10 million to be parked with them, and Asia is fertile ground for that kind of cash. Financial wealth in the region, excluding Japan, has grown 10.8% annually since 2009, almost double the global rate, according to a report by Boston Consulting Group. It’s seen growing 5.1% to 7.4% annually until 2024, clocking the fastest pace in the world, the report said.

“The second half is going to be critical,” said Kam Shing Kwang, chief executive officer of JPMorgan’s Asia private bank. “We’re learning to adapt to this new world because not everything has to come to a halt.”

Some banks are faring better, in particular those with extensive local networks -- often via their retail presence or through partnerships. Bank of Singapore, which oversees US$113 billion in wealth assets, reported a rise in assets of US$9 billion in the second quarter, both from new assets and market gains.

Getting existing clients to add more cash amid resurgent markets has also provided a cushion to the difficulties in wooing new clients. Credit Suisse Group AG saw net new assets in its Asian private banking business swell by 80% in the second quarter after the trading boom.

Another boon has been an easing regulatory environment. Authorities in Hong Kong and Singapore have temporarily pulled back verification rules, allowing for video conferencing and digital submissions of paperwork such as deeds, licenses and signatures.

Julius Baer Group Ltd., based in Zurich, started digital onboarding pilot in Switzerland this year and is planning to roll that out in Asia, according to Asia-Pacific Chief Operating Officer Andreas Zingg.

“As a bank we’re convinced that many of the changes on how we engage with clients are here to stay in the long run and this includes further digitalization of onboarding new clients,” he said.

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Starting at the end of next month, Bank of Singapore is going to extend digital onboarding of prospective clients anywhere as long as they want to have their assets managed in Singapore, said Sonjoy Phukan, the chief operating officer at the bank. Pending approval, this will later be offered to prospective clients looking to open accounts in Hong Kong.

“It’s a given that movement restrictions as a result of global Covid-19 pandemic have affected the ability of our relationship managers to conduct in-person meetings with both existing clients and prospective clients,” said Phukan.

The bank has still been able to open new accounts by moving checks to video conferencing and other digital means, he said. But it’s also anticipating a slowdown in the growth of new assets in the second half of the year.