India is the market experiencing the region’s fastest growth in high-net-worth population and wealth, followed by China, Indonesia and Thailand, finds a new report.

According to the Asia Pacific Wealth Report 2015, published by Capgemini and RBC Wealth Management yesterday, India saw 26.3% year-on-year growth in its HNWI population (with more than $1 million in investible wealth) to 198,000 in 2014.

As a result it became the third largest market in the region by wealth with $785 billion, an increase of 28.2% on the previous year.

The next fastest growing was mainland China, which saw its HNWI population expand 17.5% to 890,000. That is still far behind Japan’s 2.4 million wealth individuals, but that market saw just 5.4% growth in number year-on-year.

China also saw its wealth expand at 19.3% in 2014, taking its overall level to $4.5 trillion, behind Japan’s $5.9 trillion but importantly making up an increasingly significant portion of the $15.8 trillion in Asia-Pacific wealth.

“India and China have propelled Asia Pacific HNWI growth in recent years and are expected to act as drivers both regionally and globally in the years ahead,” the report stated. “These two markets represent nearly 10% of global HNWI wealth and account for 17% of the global increase in wealth since 2006.”

Indonesia, meanwhile, saw its HNWI population expand 15.4% to 47,000 and its level of wealth grow 16.9% to $157 billion. As for Thailand, it enjoyed 13% growth in HNWI population to 91,000 and 14.9% increase in wealth to $456 billion.

Asia Pacific already has the highest HNWI population globally. According to the World Wealth Report 2015, Asia’s HNWI population grew 8.5% year on year to reach 4.7 million, as reported. Worldwide HNWI growth was 6.6%, to 14.6 million.

Overall Asia-Pacific’s wealth increased 11.4% to $15.8 trillion over the period, versus 9.1% growth for North America to $16.2 trillion. This region is tipped to take top spot for HNWI wealth before the end of this year.

The Asia-Pacific report also found that ultra HNWI (with at least $30 million in investable assets) in the region accounted for less than 1% of millionaires last year, but generated over a quarter of the wealth.

In terms of asset allocation, Asia Pacific HNWIs said they preferred cash over equities and real estate, which set them apart from global peers who preferred equities.

Barend Janssens, head of RBC Wealth Management Asia, noted that rich Asians were also entrepreneurs who used cash for trading or company acquisitions. “Cash emerged as an important category this year,” he said. “It used to be real estate. Cash allows clients to quickly move in and out of investment opportunities.”

Further, credit was shown to be highly important to Asia’s HNWIs, who use it to finance more than a quarter of their assets. “If you want to be successful in Asia, you are not going to get there without providing credit,” argued Janssens.

Asia’s HNWIs placed high importance (58.7%) on a wealth management firm’s ability to provide credit facilities. They also had greater reliance on wealth managers for investment ideas and advice compared with global peers.

Although the prospects for wealth management firms in Asia is great given the region’s population and wealth dynamics, emerging economies’ wealth remains in the domestic market.

“A lot of the high-end wealth management services are provided on a cross-border basis, but most of the wealth that is being generated stayed at home and is domestically serviced,” added Janssens.

Only 15-20% is served on a cross-border basis, and Janssens suggested there were really only tow considerations for wealth management firms: are they going to continue as a cross-border provider, or do they find it interesting to go into the domestic market to build a position there?

He noted that it was not easy to opt for the latter in Asian emerging markets as the local banks had a very good grip of the domestic client base. But as HNWIs with at least $1 million investible assets grew their wealth, “you will see the very large banks in the market make a move to service domestically,” Janssens said.

Compared to 2013 the growth rate was slower as HNWI population and wealth grew 17% to 4.3 million and 18.2% to 14.2 trillion, respectively, during that year, as reported.