This piece is part of The Final Word series, where top private banking and wealth management heads share their views on industry trends in 2017 and the year to come.
Some say tech or non-traditional players, some say the expansion of Chinese banks; some say regulatory tightening; but what do you believe will be the greatest source of disruption for the Asia offshore industry in the coming years?
Lok Yim, head of Asia Pacific, Deutsche Bank Wealth Management
“Given the proposition of Deutsche Bank Wealth Management, I would say tech, which in fact, is disrupting many other industries.
Technology, on one hand, is disrupting the way we do our banking business, and on the other hand, is redefining clients’ demands and expectation on their banking activities. Take us as an example, we are investing EUR 65 million globally in client-focused digital technology and to enhance our client-related systems. Instead of sharing market information internally via emails and face-to-face briefings, we offer an internal app to our relationship managers who can access market news and asset class updates anytime anywhere. The technology empowers them to engage even more closely with clients. We offer “Deutsche Wealth Online” to our clients who can access their accounts and investment information seamlessly and securely. To be relevant to our clients, we have to be proactive in offering such digital tools.
I would say the tech impact is even more phenomenal in this part of the world given the rapid growth of wealth in Asia, we will emerge as a key centre of tech-driven innovation.
At the same time, we have to get ourselves familiar with and prepared for the impact of cyber-threats with the involvement of more third-party vendors, evolving tech and data exchanges.
As mentioned above, tech is disrupting other industries. Our regulators will turn to tech too. They need to supervise our more-tech-driven industry more effectively by adopting a wide range of data gathering and analytical tools.”
Ron Lee, head of private wealth management, Asia Pacific, Goldman Sachs
“One of the key drivers of change will be the continued growth of China’s tech and other emerging industries, which has created a new generation of entrepreneurs. These business owners are not only adding to the overall wealth pool, they are also more open to seeking professional advice in managing and passing on their wealth.”
Didier von Daeniken, global head, private banking and wealth management, Standard Chartered Bank
“Digitisation is transforming the financial services industry at great speed and private banking is no exception. Our clients lead very “digital” lifestyles and they expect the same levels of online engagement, speed and convenience from their banks as they do from their favourite brands or travel portals.
We see innovative technology solutions such as robo advisory as a complement to the “human“ advisor model: they reduce the time required to deliver advice, automate some basic investment decisions and allow relationship managers to spend more time focusing on meeting a client’s needs.
While there’s no doubt that private banks are evolving, clients will continue to need and value the traditional expertise of their wealth manager. It will still be about helping clients to invest wisely and stay the course during down markets, and building enduring relationships based on a proven track record and trust.”
Claude Haberer, Asia CEO, Pictet Wealth Management
“On one hand, regulatory tightening is something that is now constant and regular and therefore continues to change the way we conduct our business. Chinese banks have been investing a lot in private banking. We may not feel the competition is so intense right now but I think it will become so over the next five years.
But as has happened elsewhere – and Europe is a very good example of this – as and when local markets mature, wealth to a greater extent will remain local. Therefore, onshore private banking [in Asia] will become a more pronounced theme. It may not be huge at this stage but it will develop. On the other hand, for the foreseeable future, we will still have pretty controlled local markets with tight regulations that limit the availability of international investments for local HNWIs. Also, there is the issue of political risk in a number of Asian countries.
Combined, these are two very powerful forces that will continue to support the offshore industry for very legitimate reasons, which are the need to have access to international investments and to safeguard and protect the assets of wealthy entrepreneurs. It must be said, though, that because we are seeing such an increase in wealth in Asia, offshore centres and developing onshore markets have room to grow.”
Tan Su Shan, group head of consumer banking and wealth management, DBS Bank
“For banks looking to create a sustainable wealth management business here in Asia, there are a few other things to consider.
Firstly, it is the bank’s ability to build scale, be sustainable and invest for the future. Secondly, banks must be able to serve the local and global needs of Asian clients. It is not enough to just bring a Western platform to Asia and do a “plug and play”. Clients here demand-specific Asian solutions that may require specific customisation to local currencies, local assets and liquidity solutions. Hence, it behoves banks here to have a deep understanding of the Asian landscape and can value-add to clients in this aspect. Thirdly, it’s the bank’s ability to provide liquidity and credit solutions to these clients, many of whom run family businesses which may have liquidity or structuring needs. In Asia, where the wealth management process is intrinsically tied to the wealth creation process, the banks who can play a role in the business banking side of these clients and to combine this with a highly relevant wealth structuring and wealth management solution, should stand to win long term market share.
We believe the “Big Techs” with large platforms are the ones we should be more concerned with.”