Q1: Private banks in Asia have faced a number of challenges in 2024, from uncertainty around interest rate cuts in the US to volatile markets and geopolitical tensions. Considering this background, how did you safeguard AUM and revenue streams in 2024, while also attracting net new assets? What will your strategy be in 2025?

In 2024, SCB Private Banking prioritised the protection of assets under management (AUM) and revenue streams while actively pursuing net new assets, even in a challenging economic environment. We’ve implemented a multifaceted strategy that includes diversifying our investment products, strengthening risk management practices, and utilising effective hedging techniques. These steps have been instrumental in safeguarding our clients’ wealth and ensuring stable performance.

Our current range of structured products and diverse private assets has proven effective, with many options offering either a low correlation to market volatility or robust downside protection, including capital preservation. This approach has enabled SCB Private Banking to achieve AUM growth that surpasses the industry average. Moreover, our downside protection products have quickly become the most sought-after among private banking investors, as reflected by their strong sales performance.

Looking ahead to 2025, we remain committed to maintaining this momentum and delivering exceptional value to our clients. Although we anticipate continued investment volatility, we are responding by accelerating our efforts to enhance efficiency through the development of digital tools and data-driven solutions. Additionally, we are expanding our suite of tailored offerings, particularly in new asset classes, to attract net new assets and maintain our leadership in the private banking industry.

Q2: How are you advising clients in terms of investment opportunities in 2025? Which markets and asset classes will provide the best opportunities? And how can clients balance leveraging these opportunities while managing risks to their portfolios?

For 2025, we anticipate that investment opportunities will be shaped by several key factors. Firstly, the Federal Reserve’s potential rate reductions amid a soft landing in the US economy could create favourable conditions for growth. Secondly, while President Trump’s policies have generally been beneficial for the stock market, especially in the US, they have also introduced periods of uncertainty and volatility, particularly related to trade and international relations. Lastly, ongoing geopolitical risks, such as the conflicts between Ukraine and Russia and in the Middle East, continue to pose challenges.

To navigate these complexities, we advise our clients to divide their portfolios into two parts. The first part is the long-term core portfolio which is diversified across various asset classes. For fixed income, we recommend US Treasuries and investment-grade bonds with short-term durations of around 2-4 years, anticipating higher US bond yields. In developed market equities, we favour US equities, particularly those with quality growth and defensive characteristics. In emerging market equities, we see opportunities in India, Indonesia, China A-shares, and Thailand.

Additionally, we include gold in the core portfolio to hedge against geopolitical and inflation risks. We also incorporate alternative assets such as REITs and private assets to enhance diversification. For clients who can tolerate more risk, we suggest including an opportunistic portfolio for short-term investments, comprising 15%-25% of their total portfolio. Here, we recommend investing in US mid-small cap stocks, which offer the potential for higher returns.

By following this strategy, our clients can leverage investment opportunities through the opportunistic portfolio while maintaining a diversified and balanced core portfolio to manage risks effectively.

Q3: Much hype has been made about the transformative potential of artificial intelligence. What opportunities does AI present to your financial institution, and how does it fit into a broader strategy of technological upgrade and digitisation?

At SCB, our mission is to become a “Digital Bank with Human Touch.” AI represents a significant opportunity for our bank to drive operational efficiency, enhance customer experiences, and innovate product offerings. By leveraging AI, we can provide personalised services to clients at scale. Our SCB Connect AI-driven chatbots provide customers with real-time 24-hour Q&A on services provided by SCB, account opening guidelines, purchase/evaluation, as well as solving customer enquiries on investment products, i.e., product details and customised recommendations.

Furthermore, AI enhances our approach to fund selection and personalised recommendations. This integration is evident through personalised content based on each customer’s investment behaviour and risk appetite. AI plays a crucial role in delivering timely, tailored content for each individual, with customised insights and investment opportunities being directly communicated to each customer.

In addition, our strategists use AI to track factors affecting investments from various sources. AI then helps summarise the information in a concise and easy-to-understand manner. Our strategists also evaluate the information gathered to ensure the highest accuracy before using it for analysis and investment strategy planning.

At the same time, we use AI to assist in writing and refining content, such as suggesting interesting graph presentations. Analysts provide the data for AI to process and filter, aiming to communicate more effectively with clients while reducing unnecessary work time. This allows our analysts to focus more on the analysis and investment planning part.

We believe that in an increasingly digitised world, AI is a crucial technology that helps us seamlessly shift from traditional work methods to digital operations.

Q4: With wealth clients being increasingly sophisticated, tech-savvy, and time-conscious, they are demanding more expertise and capabilities when it comes to discretionary portfolio management offerings. How is this reflected in your long-term approach to DPM in Asia and efforts to deepen client penetration of these solutions?

Our approach to discretionary portfolio management (DPM) in Asia is centred on personalisation, advanced technology, client education, transparency, and sustainable investing. By leveraging data analytics, we tailor portfolio strategies to meet individual client needs and preferences. Digital platforms and AI-driven tools offer real-time insights and efficient communication, ensuring clients stay informed with minimal effort.

We prioritise educational initiatives to increase client understanding and comfort with DPM, and we emphasise transparency to build trust through clear communication on fees and investment decisions.

Q5: Trillions of dollars of wealth are expected to be passed down to the next generation of clients in Asia over the coming years, bringing into the spotlight services targeted at next-generation clients. What is your bank doing to ensure it captures the full potential of this opportunity, whether via content, outreach, or solutions like family office and wealth planning?

In family office and wealth planning, we place the utmost priority on the client’s journey from the very beginning. Our team works closely with all family members across generations to provide a comprehensive service. Our main goal is to build strong relationships and foster long-term wealth through holistic services.

At SCB, we perceive wealth as more than just financial assets: it’s about preserving family values, securing a legacy, and ensuring continuity for future generations. Our holistic services are designed to integrate investment strategies with personalised financial planning, tax optimisation, and risk management, all while considering the unique dynamics of each family.

By providing a comprehensive service, we aim to empower families to make informed financial decisions, navigate complex challenges, and achieve both short-term objectives and long-term aspirations. Our commitment is to be a trusted partner throughout every phase of the family’s financial journey.