Terence Chow, head, RBC Wealth Management – Asia 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, investments, regulations, and technology in 2021, as well as providing their predictions for 2022.
The previous 12 months have proved that private banks can draw in significant amounts of net new assets and client accounts as the industry has adapted to widespread travel restriction due to COVID-19. With the potential easing of these restrictions in 2022, new variants aside, to what extent will private banks return to their pre-pandemic methods of sourcing clients and gathering assets?
Regardless of whether we are speaking to clients in person or remotely, RBC Wealth Management’s focus remains the same – it’s about really taking the time to understand a client’s unique values, needs and goals, sharing our insights and creating strategic wealth plans that reflect what’s important to each individual and family.
We’re certainly looking forward to meeting clients in person much more frequently, but there have also been some unexpected benefits to engaging with them virtually. During more normal times, our clients and their families are travelling all over the world and don’t necessarily have time for in-depth, lengthy conversations, especially if it means scheduling in-person meetings. So the ability to take advantage of digital channels and virtual meeting rooms to connect with our clients all over the world is something we’ll definitely retain – especially since our focus and specialty is around Asia’s global families.
Given the majority of Asian wealth is located onshore, how should international private banks best target and differentiate themselves in these markets? For domestic regional private banks, what is the most effective strategy for competing with international players?
RBC Wealth Management is differentiating itself in Asia with a strategy that highlights our specialty around serving Asia-based clients with global lives – particularly those with strong connections to Canada, US and British Isles.
Many wealthy families are choosing to split their time and business interests between countries, with others in retirement or enjoying the lifestyles that they worked so hard to create. While the concept of a global footprint may seem glamorous, it is also complex. Each jurisdiction has its own rules, regulations and customs that may cause frustration or challenges, particularly when clients are considering education, tax residency, real estate, wealth transfer, estate planning and business needs across international borders.
RBC is one of the largest banks in the world by market cap and a leading global wealth and asset manager. With our global footprint and full suite of capabilities, services and products, we are in a unique position to meet the needs of clients who fit this mould.
This is where we will continue to win, rather than trying to compete with the local private banks in Asia alone.
The past two years or so have accelerated the rate of technological and digital adoption at private banks across the region, given the restrictions imposed by the COVID-19 pandemic. From hyper-personalisation to digital onboarding and KYC, what will be the biggest focus in terms of tech deployment for the industry in 2022 and where do the gaps lie?
This year, private banks will continue to digitise their capabilities to offer integrated access to their products and services at attractive fees, including banking, brokerage and portfolio management.
Firms will prioritise equipping relationship managers with portfolio and advisory tools — such as dashboards, data, client and market insights — that enable them to deliver high quality, personal and impactful advice to clients. To achieve this, private banks will need to deploy AI and data-driven technologies at scale across the value-chain, as well as partnering with fintechs to take advantage of their utility and advanced solutions, and meet the evolving needs and expectations of clients.
While COVID-19 has accelerated digital investment and adoption over the past two years, in some cases this may actually increase the barriers to working with third parties. For example, private banks that rely heavily on global platforms or are carrying larger legacy systems may be less nimble to integrate with fintechs. Architecture agility is key to facilitating this.
Sourcing talent in the region’s private bank industry is becoming tougher than ever, pushing up hiring costs across the region. How can private banks ensure they have adequate access to the talented relationship managers and other front-line staff over the coming years? What is the key to attracting the right candidates?
In terms of sourcing talent, we firmly believe that culture and leadership are the key ingredients to attracting the best. However, private banks are not just competing with each other for talented professionals, we’re actually competing with many other industries as well – notably the technology sector.
As the saying goes: “Culture eats strategy for breakfast”. This is why at RBC, we spend a lot of time talking about our purpose – helping clients thrive and communities prosper. This is central to everything we do, how we conduct ourselves, how we treat each other and our clients and how we work together. Diversity of thought, of skills, and backgrounds – these are all integral components to building and sustaining a culture that attracts the best talent.
And it’s not just about external hires. I would point out the importance of growing and developing talent internally by offering fulfilling careers through challenging roles, formal and informal learning opportunities, and an inclusive culture in which all colleagues can thrive.
Our leadership team lives and breathes these core tenets every day and everyone at RBC is passionate, not just about what we deliver for our clients, colleagues and communities, but also how we deliver it.
How important is governments’ support to ensuring family office industry prospers in the region? What is at the top of your wish list for how governments in Hong Kong and Singapore can support the private wealth management industry’s development (e.g. less travel restrictions, more tax incentives, review/relax on a particular regulation)?
As a gateway to mainland China, Hong Kong is already a great base for wealth managers to serve multiple generations of wealthy families across Asia. Schemes such as Wealth Management Connect will enable Hong Kong-based banks to support clients in the region by creating more fluidity across the Greater Bay Area (GBA), and further afield.
Top of my wish list would be the gradual and measured expansion of the scheme in terms of size of investment and the products available, to make it an appealing investment opportunity for high-net-worth clients. This would accelerate growth for private banks in the region.
In the course of 2021, many private banks have grown their business presence in Singapore as the industry saw more business opportunities among Greater China clients in the city state. What is your private bank’s business split across Hong Kong and Singapore now compared to 12 months ago? Do you think the shift of gravity in business across Hong Kong and Singapore has reached an equilibrium?
With our strategy anchored around our specialty of servicing Asia’s global families, we really don’t spend too much time thinking about our split of business between Hong Kong and Singapore. We have a great team of relationship managers in Hong Kong and Singapore, and booking centres in both locations, all working in concert to service eight core markets across Asia. Our clients’ global needs often bring other parts of RBC’s international capabilities into the broader solution, and this is where we spend most of our time – providing global solutions for these global families.
Meet 2021’s industry leaders in the full round up of of Asian Private Banker‘s The Final Word 2021.