Online trading of structured products is on the digital upgrade agenda of both HSBC Global Private Banking and UBS Global Wealth Management in 2022. For HSBC GPB, the capability is going live in a few weeks’ time, said John Plester, the bank’s regional head of transformation and innovation, Asia, in a webinar hosted by Asian Private Banker on Wednesday.
Titled Enabling Conversational Banking: Reaching the next level of convenience and personalisation in client experience, the webinar was sponsored by Avaloq. The webinar defined conversational banking as digital solutions that allow PBs and their RMs to communicate with clients and to flexibly conduct different banking services, such as online trading.
Online trading at your fingertips
Pascal Wengi, North Asia managing director at Avaloq, explained that clients are expecting bankers to communicate and have more investment-related conversations with them through digital channels such as WeChat or WhatsApp. A recent Avaloq survey has found that 92% of Greater Bay Area (GBA) investors prefer having WeChat or WhatsApp as a client service channel.
Responding to clients’ increasing demand for digital communication, HSBC GPB launched its first version of online trading tools mid-2021 to enable FX, cash equities and exchange-traded funds (ETFs) trades from clients’ mobile devices. Plester said that “in a few weeks”, HSBC intends to launch a structured product trading function on its online trading app.
“We are about to launch [an online trading function] for structured products, both to give clients the ability to purchase preset products put together by our trading desk, and to give clients the option (through the app) of building their own structured product as well. That is due to be released in the next few weeks,” said Plester. “Further to that, later on in the year, we will have funds, fixed income and discretionary mandates.”
He added that the launch of the online trading app has benefited from taking an agile approach to design. He explained that an “MVP” (minimum viable product) was launched — which meant that the initial version only had an ETF and cash equity trading function. The feedback from clients’ and RMs was then collected and used to improve the next phase in product development.
Distinguishing between high-tech and high-touch
Laurent Rosfelder, operating head WM North Asia, UBS Global Wealth Management, said that UBS GWM too targets to roll out its structured product online trading function this year. Its team is working on a couple of other initiatives to ensure the bank’s digitalised services stick to its client promise of “personalised, relevant, on time and seamless”.
“A few examples here,” Rosfelder said. “Structured products, ‘SP Online’, is on the agenda for this year. Having said this, it will not conduct transactions of very complex products. Myway digital too is on the agenda; this is about giving even more control to how clients want to manage discretionary portfolios by creating blocks of investment based on client’s interests.”
Other developments he shared included: an upgrade to the ‘virtual briefcase’ function in both digital and physical meetings so that RMs will be able to share digital files, audio and video in one place; and a lending management function via digital banking.
While developing different digital capabilities, Rosfelder pointed out that it must be acknowledged that it was essential for PBs to have a “high-tech, high-touch” service model.
In response to a live audience’s question, he said that in instances where complex products like a knock-out forward or equity note trade are traded, the bank is not planning to offer digitalised straight-through processing for all asset classes.
“Obviously, we have a complex product regulation in Hong Kong which probably sets the stage. But beyond that, complex products such as the ones you mentioned, are not types of products we would provide via these types of channels. Also, it would not be the right kind of experience that we wish to provide to clients,” said Rosfelder.
“What’s critical is getting the high-tech and high-touch right. So for plain vanilla [products], it’s high-tech, while for bespoke, complex [products], it’s high touch.”