Asia’s structured products market is witnessing two distinct trends. On one hand, there is an evident manufacturing play, typified by the cost-effective and efficient execution of generic flow structures, enhanced by technological innovations. On the other is a high-touch, solutions-oriented play around the creation of non-flow products.
Recognising that the demand for assets and wrappers in Asia will only become more diverse and complex, BNP Paribas was clear at the outset of its reorganisation that it wanted to be a solutions provider to Asia’s private banking industry and not solely a product manufacturer.
“No revolution,” says Stephane Honig, head of sales wealth management & family offices, global markets, APAC at BNP Paribas, describing the new developments in 2017. “The developments and progress are in line with our strategy to be solution providers rather than just a product manufacturer with a price play. In previous years, we had created well-organised, well-thought client presentations to capture trends in the markets and engage them in conversation. This year, we’ve gone one step beyond. We are engaging our clients at multiple levels, from dealers all the way to management.”
For example, the bank has experienced significant traction at the CIO level on its thematic ideas relating to ‘New China’ with a focus on sustainability spanning across green finance, electric vehicles, One Belt One Road and more. BNP Paribas’ efforts have even altered a prominent habit in the Asia FX market of using short-dated notes, often of the 3-6 month variety, shifting exposure to notes of up to 5-year maturity based on more dynamic market views.
This is not to say that the French bank has dropped the ball on its flow products: BNP Paribas continues to provide competitive pricing on broad range of reference assets and payoff structures. This is backed by efficient execution and technological innovation via its continuum of distribution channels, ranging from e-mail pricers to a highly reputable dealer platform.
Admittedly, this high-touch approach will involve hits and misses, but Honig believes that it will be benefit the bank and clients over the long term. Indeed, Honig places an emphasis on being private banks’ “sparring partner” to exchange and debate ideas, rather than just execute.
“If there is an idea, we are delighted to sit down and have meaningful conversations with private banks on implementation, regardless of whether or not that private bank has an internal investment bank to subsequently do business with,” he shares.
In 2017, BNP Paribas is the Structured Products House of the Year.