Pierre Masclet, CEO, Asia and Singapore branch, Indosuez Wealth Management shares with Asian Private Banker his thoughts on the year that has been, and the upcoming year in the ‘Final Word’. This is a ten part series where the industry’s leaders share their thoughts and opinions on key issues around industry trends, business performance, investment solutions, regulations and compliance, and technology.
Industry trends | What is the state of Asia’s talent pool and did your firm pay significantly higher for new talent? What is your view on private banking talent development in Asia?
Our talent pool has grown significantly in 2018, partly through the acquisition of the private banking activities of CIC and partly through organic growth as we have continued to add talent to our bank throughout the year. Our increased (and positive) media exposure, presence, and participation at key industry events and conferences have led to an increased appetite and interest to join Indosuez Wealth Management.
Industry trends | How important is it for your business to make substantial inroads in China to ensure sustainability and growth over the next decade?
China is an important pillar of growth but let’s not forget that Asia as a whole is growing substantially. We view both North Asia and South Asia as growth engines and we are well resourced to be able to serve our clients in this region and capture the growth.
Business performance | In the midst of what has been construed as an increasingly difficult macroeconomic environment, how do you think the private banking and asset management industry will perform in 2019? Will it be a year to separate the wheat from the chaff?
While we are still rather optimistic when it comes to our macroeconomic outlook, 2019 will certainly pose challenges that we haven’t really seen in the past two years. This may indeed be a moment of truth for our industry and as Indosuez always focuses on the long term, we are well positioned to guide our clients through more market volatility or uncertainty.
Business Performance | What is the one revenue line that you must build up significantly in the coming few years to ensure business sustainability? What is your view on the revenue mix of the industry in general?
We advise our clients to have diversified portfolios. Similarly, in our view, revenue has to be a healthy mix of recurring revenue as well as more trading-related income and not be dependent on one specific revenue line.
Regulations & Compliance | What’s the essential tool you have or are planning to create that will help your firm tackle the uptick in regulatory stringency and scrutiny? Do you think that the compliance costs of your business have peaked?
Given the fact that our proprietary core banking system S2i is being used by 30 industry participants globally, we have the advantage of being at the forefront of dealing with and integrating the rules and regulations in our policies and automated processes. We view this being ahead of the regulatory curve as a competitive advantage, both for our private clients as well as our clients from the financial industry who work with our system.
Regulations & Compliance | Are you satisfied with how regulators interact and solicit the industry for feedback?
The way regulators interact with the industry and vice versa has been improving substantially over these past few years. To give an example, the founding of the Private Wealth Management Association (PWMA) in Hong Kong has led to substantially increased and improved interaction with various regulators, both at home as well as overseas.
Another trend is that regulators globally communicate, interact, and align more with each other these days than was the case previously, which in turn has resulted in better outcomes for banks and clients alike because of increased clarity, transparency, and alignment.
Technology | What is your view on robo-advisors and is your firm developing robo-capabilities of its own? Have you observed any robo-advisory developments that could materially disrupt the industry?
We have designed our digital value proposition in such a manner that it is easy to navigate and use. In our business, however, we very much emphasise the human aspect of banking which one should typically expect from a wealth manager. All our clients have a dedicated RM, who they are in frequent contact with, looking after their (often very personal) needs.
As such, almost all of our interaction between our clients and us is on a ‘humanto-human’ basis and whether our clients want to use our digital offering is entirely up to them. We strongly believe our clients value banking ‘the oldfashioned way’ where personal interaction is the main driver in solutions delivery. Pure robo-advisory will probably, at some stage, be available to retail clients specifically. Having said that, we employ technology that helps us in portfolio construction, but ultimately it gets a ‘human review’ before it is delivered and discussed with our clients by a human private banker.
Meet 2018’s industry leaders in the full round up of of Asian Private Banker‘s the Final Word 2018.