Terence Chow, CEO, Asia, RBC Wealth Management shares his views with Asian Private Banker in ‘The Final Word’, a year in review by the region’s private banking leaders as they share their thoughts and opinions on key issues around industry trends, business performance, investments, regulations, and technology.
Industry Trends | What is the single biggest challenge and the single biggest growth opportunity for your business today?
The single biggest challenge facing our business is the cloud of global uncertainty that is hanging over clients’ heads as they make financial decisions amid Brexit, the trade war, and other issues. However, this is also the main opportunity for RBC Wealth Management because we work primarily with Asia’s global families — a high net worth client segment which is best characterised as globally-mobile families that tend to have complex financial structures that span Canada, the UK, or the US.
RBC’s global footprint matches these markets well, whether it be our Asia operations, our Canadian private bank and advisory business, or our US and UK wealth management operations. Here in Asia, we draw on this global footprint by bolstering our local capabilities, services, and talent while bringing in advisors from Canada, the UK, or the US to help Asia’s global families navigate the numerous financial, political, and social uncertainties that affect their wealth planning across borders and legal jurisdictions.
Business Performance | Productivity and efficiency matter more than ever in this environment. Over the past year, what key steps have you taken to improve both the productivity and efficiency of the business and, to date, what has been the impact?
I couldn’t agree more. Most of the clients that we talk to in Asia are actively looking for productivity and efficiency. They don’t want to talk to separate advisors and relationship managers in each country that they have exposure to. Rather, they want a partner who provides scalable service that can grow alongside their wealth.
For example, in Hong Kong and Singapore we work with many families in which parents or grandparents are in Asia while their kids have gone to school, put down roots, and started careers in Canada, the UK, or the US. We want to ensure that these families are able to mobilise their assets in each of these markets, from paying school fees to preparing for generational wealth transfer.
We’ve spent 20 years evolving our business structure to meet the needs of these clients. As a result, our technology, products, and services are all leveraged across markets, allowing us to mobilise our global scale to meet investor needs in a holistic manner. We essentially “passport” clients’ financial management needs in these areas, across national borders and divisions of RBC.
Investments | What are the key investment themes that your private banking will focus on in 2020?
At RBC Wealth Management’s Outlook 2020 events — held in early November in Hong Kong, Jakarta, Singapore, and Taipei — standing-room-only crowds enthusiastically discussed the growing importance of economic moats and ESG investing amid uncertainty.
The idea of investing in companies with strong moats isn’t new but is particularly relevant amid high levels of uncertainty in markets. It’s about looking for companies with strong brands, clearly superior products, or networks that are hard to replicate. These three factors combine to make a company’s margins and market share less vulnerable to external threats. The global uncertainty affecting markets today is unlikely to disappear in the near term, so we expect deep moats to remain a strong theme in 2020.
Proactive management of ESG risk is another theme that we expect to grow in importance in 2020. However, this does not suggest a proliferation of ESG product offerings in the coming year; rather, it points to incorporating ESG as a fundamental component of risk management and insulation from downside risk.
Regulations | How has your private bank responded to regulators’ increased emphasis on building proper banking culture?
There is no doubt that we operate in a market that is subject to increasing regulation, and that all private banks need to pay attention to regulatory requirements. RBC WM is no different. Doing what’s right for our client is at the centre of everything we do, and guides how we operate.
Technology | If we can agree that effective private banking relies on banks having a deep understanding of client needs and behaviours, how are you leveraging tech and data to deepen this understanding?
While technology is a given when delivering financial services — any bank can install state-of-the-art technology or outsource to a cloud-based utility provider — we find that we have the most success when we pair technology and analytics with deep understanding of client needs.
Globally, RBC has market-leading and award-winning data analytics, but our ultimate goal is to be a digitally enabled relationship bank. This means pairing digital insights with intimate knowledge of clients’ needs garnered through deep research and one-on-one consultation. This is what enables our relationship managers to know that a client’s children are in school in Canada or that they are buying a home or setting up a business in the UK or the US.
Meet 2019’s industry leaders in the full round up of of Asian Private Banker‘s The Final Word 2019.