Anupam Guha, head – private wealth management, ICICI Securities Limited 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 | In what ways has the COVID-19 pandemic irrevocably changed the private banking industry and your own bank’s approach to operations and service?
The pandemic has been difficult for firms which are laggards in digital transformation.
We have seen client transactions move to digital channels such as mobile apps and websites. Products that were traditionally offline (PMS, Alternates etc.) are now moving to online channels of execution.
Client meetings and services have also moved from face-to-face to online.
ICICI securities has always been among the front-runners in digital investment in India. We saw new client additions increase during the pandemic as clients from traditional offline brokers and wealth managers flocked to wealth managers such as ourselves.
Client acquisition has become digital – completely online onboarding enables customers to open an account in just 10 minutes.
Client engagement has moved to online channels – while most of our products are available on the digital platform, RMs have started using video calls to engage with clients more effectively.
At the same time, client reporting & RM reporting has been enhanced. We have also put a lot of effort into strengthening our data security and risk management frameworks.
Industry Trends | Few can deny the importance of Asia’s onshore wealth markets — in terms of asset pools and the need for wealth management from increasingly sophisticated domestic investors. What opportunities do these markets bring to your business, and to what extent will ‘onshoring’ shape your strategic agenda?
ICICI Securities is predominantly an onshore player. We see India as a large market with huge opportunities for growth. Our focus, therefore, has been on Global Indians. We have our digital platform at the core of our proposition, well complimented by RMs in a hybrid model of execution.
In advisory business, we are moving towards more value-added services – straddling the financial and non-financial needs of our clients – including estate planning, tax advisory, etc.
Business Performance | NNA gathering and account opening have proven challenging in a pandemic-affected world. If we continue to experience lockdowns and travel restrictions in 2021, how can private banking businesses adapt?
While client acquisition and NNA gathering was traditionally done through face-to-face meetings, the shift towards online meeting and execution has become prominent during the pandemic.
The private banking business of ICICI Securities has responded well by (a) facilitating completely online onboarding enabling customers to open an account in just 10 minutes; (b) moving client meetings to digital channels and ensuring coverage of our clients; (c) upgrading our CRM to enable online sharing of documents with clients
Our investment products are offered digitally through our ICICIdirect platform, which has client investments. We have forged alliances through an open architecture model and thereby enabled the addition of new clients. We have launched a completely online global investment platform to boost acquisitions. And the launch of our online Portfolio Management Services (PMS) enables clients to invest digitally in a DIY mode or over a call with their RM eliminating all offline paperwork
Investments | From a portfolio perspective, how important will (a) Chinese assets and (b) alternative investments be for delivering clients’ objectives over the next five years?
Alternative investments, including private equity, real estate, unlisted, and gold, have seen increased demand among our UHNW clientele.
We are focusing on a mix of long only and long-short portfolios, along with unlisted shares as offerings.
Investments | What key investment themes shape your bank’s 2021 outlook — and why?
Portfolio investing approach: we are a proponent of portfolio investing to achieve better risk-adjusted return for our clients. We have created ready-made portfolio baskets of direct equity/ETF/mutual funds/bonds/gold for our investors to invest. We have created an PMS and alternate basket of products which spans asset classes, portfolio concentration and investment themes. We have made the entire product basket available online through our platform.
Global investment: our clients are looking to diversify their portfolio across geographies. We have created a global investment platform to provide a seamless remittance and investment solution to our clients.
Changing fee structure: in response to the growing trend in commissions in mutual funds, we have been consciously moving towards a flat fee based platform for mutual funds investments.
Passive investing: as passive investing continues to garner interest in the investor community, our in-house asset management business is focusing on factor-based, smart beta, low cost passive portfolios.
Regulations | Both Singapore and Hong Kong are placing a strong emphasis on cultivating a competitive and supportive environment for family offices. What further initiatives should each/either regulator undertake to nurture the development of a family office-supportive ecosystem?
One of the key aspects of the family office business model is an alignment of interests. The regulators in India have taken key steps in this regard. New regulations regarding investment advisory or portfolio management services have resulted in increased transparency and alignment of fee structures.
Technology | Where do you see the best application of data analytics/machine learning in private banking?
The application of data analytics and machine learning going forward will help us in the following areas: hyper-personalisation of the digital platform based on segmentation; customer transaction behaviour and risk profiling; product preference for designing a better product; and (sub)segmentation of clients through analysing client preferences and behaviour, and social media data points.
Meet 2020’s industry leaders in the full round up of of Asian Private Banker‘s The Final Word 2020.