Steven Lo, region head, Asia Pacific, Citi Private Bank shares his views with Asian Private Banker in the ‘Final Word’, 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 approach is not a numbers game. We are deliberate and selective in our hiring. We want to make sure our hires fit into a unique culture that underscores teamwork and a drive to get the best out of our extensive platform. It’s like curating art and making sure the pieces fit into your collection! We want staff who are serious about a long-term career and are motivated by more than just compensation. In fact, we have had great success in hiring bankers who are attracted by our platform so they can serve clients more effectively. We are also committed to developing our own talent and place a strong emphasis on training and career development.
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 focus for our North Asia business. You cannot say you are a serious player in the region without factoring in the potential and opportunities that China represents which is why we continue to add resources to this market.
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 are looking at broad-based growth across all our markets and product lines. This coupled with a keen eye to managing our costs is crucial for business sustainability. We remain focused on client acquisition as one of the key drivers for continued year-on-year growth. Traditionally, the revenue mix in the industry has been more episodic than annuity-based and that will need to change to ensure business sustainability. We have recognised this and have spent time building our annuity business. Today, half of our investment revenues are from managed investments and the other half from capital markets — a marked change from what used to be an 80:20 split between capital markets and managed investments.
Investment Solutions | Ten years on from the GFC, how has your product shelf evolved and how has clients’ perception of structured products changed since then?
Although Asian clients have been widely known to be more short term and capital markets-oriented, we have seen a shift as our clients are having more of a mediumto-long-term view. They’re taking a portfolio approach and utilising tools like our investment lab analytics to design more constructive portfolios. There’s also more appreciation for the diversification benefits of alternatives such as hedge funds as well as increasing appetite for PE and RE opportunities. Our platform has evolved extensively in these areas as we leverage our extensive network to source these unique products.
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?
The discipline of compliance is very much embedded in our culture. It will continue to be part of the cost of doing business. Oftentimes, the regulatory agencies in the countries that we deal in look to us in leading the rest of the market in higher standards of regulatory adherence. I believe our extensive and long-running experience in the region gives us the capability to understand the complexities and the risks and therefore lead the way in developing the appropriate processes and oversight.
Technology | What emerging technology applications do you expect to reach an inflexion point in their convergence with private banking and wealth management? What impact will they have on the operational models of private banks and wealth managers? Who will be the biggest industry disruptors?
The transactions we deal with are large and unique and the human element is crucial to maintaining a client’s trust and sense of security. Therefore, the ability to connect with a private banker remains paramount. Emerging technology can add value in the way we communicate with clients and analyse portfolios. For example, our investment lab can dissect, study, and analyse our clients’ portfolios in a manner that is precise and that allows them to make informed decisions. Our InView ecosystem provides access to real-time account information and confirmations while applications such as DocuSign make signing forms a seamless and environmentally friendly exercise.
Meet 2018’s industry leaders in the full round up of of Asian Private Banker‘s the Final Word 2018.