CEO Edition January 2021 by Asian Private Banker

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CEO EDITION

2020

Year in review for the regionâ&#x20AC;&#x2122;s private banking leaders

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2019

Year in review for the region's private banking leaders

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INSIDE China A recap of China themes in 2020

Operation Three pandemic blessings in disguise for Asian PBs in 2020

Investment How COVID-19 upended investments in 2020

Industry As expat packages shrink, private bankers are going back home

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CEO EDITION

CONTENTS 4 Letter from the Editor 6 China Emerging from COVID-19 with flying colours? – A recap of China themes in 2020 10 Operation Three blessings in disguise that COVID-19 gave the Asian private banking industry in 2020 12 Investment How COVID-19 upended investments in 2020

THE FINAL WORD

16 The Final Word 2020-headshot 18 Business performance 20 Industry 27 Investment 36 Regulation 38 Technology

CEO Andrew Shale

Data Oliver Lam

COO Jason Coles

Design Jacqueline Kwok Jordan Yim

43 Industry As expat packages shrink, private bankers are going back home

Digital Alice Wong Sanya Amin

45 Investments Demand for factor investing increases “materially” in Asian HNWIs

Marketing Patricia Jover Jonathan Szeto

47 Industry Singapore IAMs under pressure to consolidate and retain lean structure for profitability

Editor Sebastian Enberg Editorial Charlene Cong Alice So Kenan Machado Lorretta Chen Roger Decavele Carly Lau Business Development Sonia Lam Sam Chan Yana Zhang Carolyn Law Charis Tse

Finance & Operations Karman Wu Yuki Chan Xenia So Taurus Mok

Published by Key Positioning Limited 13/F Greatmany Centre 111 Queen’s Road East Wanchai, Hong Kong Tel: +852 2529 1777 Fax: +852 3013 9984 Email: info@asianprivatebanker.com ISSN NO. 2076-5320

49 Industry Crisis tests PBs’ commitment to clients and markets: DB WM’s Lynn Hermijanto

LETTER FROM THE EDITOR

or the private banking industry, whose primary mode of client interaction is physical, the inability to engage clients face-to-face throughout much of 2020, on paper, should have led to decline in the intensity (and even quality) of interaction. What we saw was something quite different — and certainly encouraging.

2020 showed us that clients are open and willing to interact digitally and to proactively use digital tools and services. Accordingly, self-directed e-trading boomed, particularly within the first half of 2020, as did client usage of digital advisory channels at those banks that offer such a service. Most banks saw sustained high attendance at their virtual briefings, outlooks, and thought leadership events, especially around key events such as the early market crash and the US elections. Most banks told us that the intensity of engagement actually increased in 2020. The chart below, taken from our COO survey last year, shows how other communication channels picked up the slack when face-to-face meetings became difficult.

Time allocation by client-communication channels (pre-COVID-19 vs since)

The complexities of shifting rapidly to a work-from-home model were immense — tothere was no definitive playbook. To Face face Phone calls one CEO featured in this issue: 7% quote 11% 9% Video conference “Although we do have WFH (work from 10% Emails 32% home) systems set up, we had never 14% Instant messaging tools (WhatsApp, WeChat, etc.) tested them that widely and so we had Bank provided digital 17% applications 37% to catch up fast — and we did.” I am 19% also sure that clients are supportive to 2% a degree, but when their own money is 33% 11% involved, there can be no room for error. Anecdotally, private banking businesses Before Since in Hong Kong, Singapore, mainland Source: Asian Private Banker, “2020 Private Banking COO Survey”, 2020 China and India (where lockdowns ran deep into the year) managed the transition with little-to-no disruption to core services/activities by rapidly rolling out remote access to office essentials.

BEFORE

Remote access to tools/features (pre-COVID-19 vs since) 44%

56%

22%

56% Yes No

AFTER

Clearly, the pandemic has tested businesses unlike any other event of this generation. Account opening, asset gathering, and more complex activities — including in the wealth planning sphere – will remain difficult, if lockdowns and travel restrictions persist into 2021.

89%

56%

100%

Access to CRM

Client communication and record keeping

Pricing and research

Secured document sharing and e-signature

Trade execution capability

Source: Asian Private Banker, “2020 Private Banking COO Survey”, 2020

But the overarching message on these pages — and from the CEOs themselves — is that the pandemic has not so much disrupted as it has catalysed and accelerated business transformation, and that can only be a positive for the industry.

Sebastian Enberg Editor Asian Private Banker

Submissions open 开始接受申请

1 February 2021 2021年2月1日

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7 March 2021 2021年3月7日

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22 March 2021 2021年3月22日

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CHINA

Emerging from COVID-19 with flying colours? – A recap of China themes in 2020

hile being first to be hit with COVID-19, China’s economy has turned out to be an outlier amid the pandemic induced global recession: it experienced a strong rebound after a rather gloomy 1Q20, took a more restrained and orthodox approach to monetary and fiscal policies, and called for a “dual-circulation” strategy to compensate lagging overseas markets with domestic demand. In the meantime, millionaire and billionaire wealth in China has been booming. Such signs bode well for the onshore private banking and wealth management industry which has continued to mature and catch up with international trends — on the back of the gradual opening-up of the country’s financial markets and invigorated by competition from players at home and abroad. 2020 has witnessed milestones for the industry and will set the tone for the next decade — in terms of domestic transformation and global connection.

China is opening up to foreign investment, but tightens rules at home China has long pledged to facilitate access to its financial markets for foreign investors — who remain underinvested in China, compared to the US, Europe or Japan. Over the last year, Chinese regulators implemented the decision to remove quotas for the QFII (qualified foreign institutional investor) /RQFII (RMB qualified foreign institutional investor) investment schemes, and later effectively combined the two programmes and streamlined their application process. Starting from October 2020, foreign institutional investors can easily participate in China’s trillion-dollar domestic bond markets, as the country’s central bank simplified and made rules consistent across the interbank bond market, the exchange bond market, and the Bond 6

Connect programme. The continuous growth in the trading volume for the Northbound Bond Connect scheme has spawned optimism for a corresponding southbound scheme in the near future, according to Eddie Yue of the Hong Kong Monetary Authority. But 2020 also had its fair share of regulatory sternness. The beginning of the year saw record AML fines from the PBoC for two major Chinese banks and a securities broker. To curb systemic risks, the PBoC issued guidelines that target expanding financial groups and tech giants that are wading into finance. The regulators are gearing up for a stricter grip on the country’s shadow banking sector — for which they devised a clearer definition, as shadow credit made a comeback in 1H20 with the number of notorious wealth management products (WMPs) on the rise again. Chinese wealth manager Jupai argued that the government’s deleveraging strategy is far from over, which means the country’s wealth management industry will have to transform and adapt to the new norm. Echoing this view, Noah Holdings believed current regulatory developments will force more Chinese investors away from private markets. Both wealth managers’ earnings reports in 2020 showed higher flows in public securities products.

The rush for Chinese assets goes on — not without caution The thrill around Chinese assets — following a year of remarkable performances for China’s FX, equities and fixed income markets — is certainly to extend into 2021. Credit Suisse’s equity strategist maintained in July that it is still too early to call for the A-share bullrun, and further backing this thesis is China’s “dual circulation” strategy, which is believed to keep the rally going. Coming on the back of warming investor sentiment towards Chinese government bonds (CGBs), FTSE Russell announced it will include

CHINA

CGBs in the FTSE World Government Bond Index (WGBI), starting October 2021. While foreign investors search for yield in a low-rate, weak dollar environment, CGBs will act as the first leg of entry into China’s onshore fixed income market, Fidelity said. Foreign inflows into China’s debt market jumped nearly 40% each year since 2017 to a record US$383 billion as of the end of June 2020, although this is just less than 3% of the US$16 trillion market. However, there are looming fears of regulatory headwinds following the abrupt suspension of Ant Group’s behemoth IPO. Some investment analysts have contended that the fast-changing regulatory environment will be negative to China’s burgeoning e-commerce sector and hurt the private equity sector and IPO excitement. On top of that, foreign investors such as asset managers continue to grapple with their concerns for fundamentals and transparency in China’s capital markets. This has been well reflected by the underused QFII quotas back in 2019. Noah Holdings sees rising ESG adoption by Chinese firms and growing investor awareness key in driving the country’s capital markets to mature — and catch up with trends on Wall Street.

FIs capitalise on their onshore and GBA growth stories Within this year, Chinese regulators have greenlighted the securities joint ventures of Nomura, DBS, and J.P. Morgan Futures to operate onshore, and approved Credit Suisse’s taking a majority stake of its onshore securities JV. Asset managers such as Value Partners and Pictet AM also made major leaps in their onshore strategy. Onshore wealth management witnessed a hiring spree, led by UBS and Credit Suisse, to seize talent for the China domestic market. In

addition, four foreign banks shared with Asian Private Banker how they plan to attract the vast pool of prospective HNW clients in China with differentiating onshore capabilities. Meanwhile, the newly-launched Wealth Management Connect (WMC) scheme through the Greater Bay Area (GBA) — connecting Guangdong, Hong Kong, and Macao — aims to bring in an estimated RMB 200 trillion (US$29.80 trillion) in investable assets of around two million Chinese HNWIs. As a result, the region’s private banks are eyeing a share of the wealth pie and are keen on offering advisory to onshore clients. While many are still awaiting more clarity on the glossy picture painted by the GBA concept, HKMA said that the initial stage of the WMC will come with quotas — aggregate transactions are capped at RMB150 billion for either direction, whereas each individual transaction is limited to RMB1 million. Retail clients are most likely to be the target in the initial phase, bound to start in 2021. For foreign financial institutions, challenges still abound in onshore China, noted Lan Wang at Moody’s Investors Service. “From a regulatory perspective, the market opening will not completely level the playing field for foreign companies,” argued the AVP-analyst, financial institutions group. “They will still face constraints in establishing full business and increasing their geographic footprint.” But Wang added that foreign firms’ competitive advantage lies in experience and expertise in providing investment, asset allocation and operating investment advisory services. “While there is no explicit restriction against granting these licences and business qualifications to foreign companies, the process will take time and is subject to regulatory uncertainties and fast-changing rules.” Wang cautioned that initial regulatory approval is only the start for foreign FIs’ onshore operations, and “the pace of expansion is likely to be limited”.

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Bank of China Private Banking In March 2007, Bank of China launched its private banking services, becoming the first domestic bank to offer bespoke wealth management services to mainland high-net-worth clients. Today, it is one of the biggest state-owned private banks in China and has established an integrated service platform. By the end of June 2020, Bank of China operates 49 private banking centers in mainland China, and offers such services in Hong Kong, Macau, Singapore and London.

Benchmark for global offerings In 2019, Bank of China expanded its network to 61 countries/regions and offers personal financial services in more than 30 of them. This means that besides global investment options, which include a variety of offshore products such as negotiable certificate of deposit, life insurance, REITs, bonds and structured products, Bank of China can also provide crossborder retail, transaction banking and capital market services for its clients. Bank of China’s unparalleled global reach is key in serving the growing needs of China’s wealthy individuals, many of whom run business operations and own assets across continents. As their go-to bank when navigating unchartered waters, Bank of China Private Banking invests heavily in its research capabilities to make sure that they provide the most up-to-date guidance for its clients. For example, it has published “Report on personal global asset allocation strategy” for two consecutive years to analyze macro-economic trends and the performance of various types of asset in major global markets. As China rolled out development plans for the “Guangdong-Hong KongMacau Greater Bay Area” last year, Bank of China Private Banking has also put its emphasis on interlinking its private banking services in the region, knocking down many barriers of financial transactions between the mainland and the two SARs, as encouraged by the new policy. In the meantime, Bank of China’s offshore private banking business has been an important contributor to its outstanding overall performance. In 2019, both the number of clients and AuM in the Asia-Pacific region increased greatly, in which the AuM increased faster, meaning that the average account balance ticked up.

Focus on wealth succession Another feature that makes Bank of China Private Banking stand out from competition is its high-quality offerings to facilitate safe and convenient succession planning. According to a recent survey done by Boston Consulting Group, more than 50% of responding wealthy individuals in China are already (or going to, in three years) making inter-generational wealth transfer plans. This trend will unequivocally lead to a huge demand for financial vehicles such as trusts and insurance, as well as corresponding services. Bank of China Private Banking has long foreseen this trend and started to improve such products and services. It has integrated group-wide resources, together with law firms, accounting firms and other external service providers to build a comprehensive service platform for customers. As a result, the size of its family trust service recorded an average annual growth of more than 50% in the past three years. In 2019, Bank of China introduced family trust service with optimized processes, which greatly simplifies the planning work for those clients with homogenous needs. Compared with the 108-year history of the group, Bank of China Private Banking is still young. However, building on generations of rich legacy of serving generations of clients in drastically different times, the bank is no doubt one of the most highly respected and anticipated wealth manager for Chinese around the world.

Address: No.1, Fuxingmennei Avenue, Xicheng District, Beijing 100818 Call Center: +86 (area code) 95566

Three blessings in disguise that COVID-19 gave the Asian private banking industry in 2020 COVID-19 has brought unprecedented challenges to the global economy and caused many disruptions in our daily lives. But every cloud has a silver lining and quite a few industry participants have shared with Asian Private Banker throughout 2020 that the pandemic has accelerated a number of trends and has removed obstacles to change. Here are three positive changes triggered by the pandemic in 2020.

Reimagining client engagement

he most obvious change must be the acceleration of private banks’ digital agenda, centred on reshaping client interaction now that the pandemic — with its social distancing measures and travel bans — has made it harder to organise face-to-face meetings, which used to be essential to private banking.

“Many so-called cardinal rules of private banking have been broken during COVID-19,” Vincent Chui, chief executive, Morgan Stanley Bank Asia, shared at one of Asian Private Banker’s Leaders Week Webinars. Chui added that the squeeze in execution commission is already happening, with industry participants — especially the newcomers — pooling investments into electronic trading platforms.

O P E R AT I O N

Indeed, private banks with online trading functions in place recorded surges in transaction volume on their digital platforms in March and April, when the market experienced most volatility. Private banks with the capability to provide direct execution but hesitant about “switching on” such function for Asian clients, prioritised its adaptation into the region, after the digital trading capability proved its worth over the course of the pandemic. Besides direct execution capabilities, keeping multiple channels open for client-banker interactions is essential to keeping in touch with clients in volatile times and ensuring that they are kept abreast of relevant investment ideas. “A high net worth individual might have, say, six private banking relationships,” opined Mark Wightman. The EY partner, ASEAN industry leader and APAC advisory leader, wealth & asset management, told Asian Private Banker that this is the time for digital-savvy banks to shine if they are able to offer “timely, relevant and holistic” advice to clients. Will Lawton, head of QUO, a US-based order and execution management systems provider which operates TradingScreen, said the pandemic is the opportunity for Asian private banks to magnify their existing capabilities using technology to better customise and aggregate client advice, while catching up with their retail and virtual banking peers on their digitalisation progress. Core banking platform provider Avaloq strikes a chord with Lawton, in its view that technology is there to enhance instead of replace the role of human advisors in private banking, as human advisors offer trust and personal touch which is sought after by clients, especially in crises such as a pandemic.

More flexible working arrangements WFH is possibly the most used acronym in 2020, with social distancing measures adopted during the pandemic forcing the majority of private banking staff to stay away from their office desks. From the start of the pandemic, banks arranged temperature checks and imposed travel bans in an effort to limit the spread of the virus. As both Hong Kong and Singapore government’s implemented tighter social distancing measures, private banks had to resort to split teams and WFH arrangements and had to confront basic issues — such as finding enough laptops for the majority of the workforce to work remotely, or dealing with cybersecurity and compliance issues regarding client data and record keeping. Positive specifically for private banks with a traditionally more rigid Asian office culture, the pandemic has encouraged a greater use of telecommuting and other digital tools “thereby driving a collective shift towards acceptance of digital channels and flexible working”. This bodes well for the possibility that the change in work culture will be maintained post-pandemic, and will mirror work practices in some Western countries. It is worth mentioning that private banks have enjoyed the support of regulators over the course of the pandemic. The Monetary Authority of Singapore (MAS) in February urged banks to step up business continuity

plans and offered extensions in timelines for submitting regulatory reports and deferring policies implementation to allow financial institutions to focus efforts on emergency arrangements for coping with the pandemic. As the situation stabilised later in the year, MAS came up with plans to prioritise local talents in job recruitments, to incentivise financial institutions to adopt digital solutions and to encourage the creation of new jobs in key industries including private wealth management. In Hong Kong, the Securities and Futures Commission (SFC) urged licensed corporations to report major operational changes made due to COVID-19 disruptions. The Hong Kong Monetary Authority (HKMA) has provided guidance to banks on the provision of investment services through non-face-to-face channels such as video or teleconferences, and worked with the SFC in facilitating the electronic provision of product documents and trade documents for investment services.

An opportunity to get closer to clients For some, the pandemic has been life-changing as it presented an opportunity to rethink their life priorities. For clients who suffered from the economic downturn, private banks could certainly leave a positive impression by offering a helping hand when needed, as Lynn Hermijanto, managing director, Southeast Asia wealth management coverage at Deutsche Bank Wealth Management shared with Asian Private Banker in November. The pandemic has led to changing career plans and financial plans with more bankers deciding to work and live closer to home and wealthy families shifting wealth onshore to guard against the possibility of an urgent need for a transfer of funds at a time of any future global travel ban. Lee Wong, Lombard Odier’s head of family services, Asia told Asian Private Banker in an interview in May that the pandemic ties in well with clients’ hopes and fears. Hopes to secure family wealth and to create a lasting legacy — and fears of wealth erosion and conflicts within the family when unfortunate events happened to the patriarch or matriarch. The pandemic has led to increased inquiries about wealth planning from clients who don’t have an estate plan in place yet and other clients who would like to review their succession plans. Probably linked to the theme of rethinking one’s life priorities, Asian clients have shown greater interest in ESG themed investments throughout the pandemic, as they focus on environmental, social, and governance (ESG) issues, instead of being notoriously and single-mindedly focused on returns. Sustainable investments have gathered a “significant momentum” and sustainable multi-asset portfolios have been some of the fastestgrowing investment solutions at UBS . Last but not least, the distressed times have reminded the more fortunate ones to do good for the needy. Private banks introduced philanthropy schemes aimed at helping the underprivileged in society. Some of the banks made donations to fight the pandemic as a contribution back to the society in times of need.

INVESTMENT

How COVID-19 upended investments in 2020 COVID-19 has brought unprecedented challenges to the global economy and caused many disruptions in our daily lives. But every cloud has a silver lining and quite a few industry participants have shared with Asian Private Banker throughout 2020 that the pandemic has accelerated a number of trends and has removed obstacles to change. Here are three positive changes triggered by the pandemic in 2020.

nvestments were surprisingly resilient to a year like no other. “We can look at the [2008] global financial crisis as a template on how Unprecedented monetary easing measures by central banks this plays out. Banks in most places in Asia will be providing support worldwide ensured the spectre of a recession was staved off, at least to troubled borrowers,” said Dan Fineman, Credit Suisse’s co-head of equity strategy, Asia Pacific and head of Thailand research said. for the time being.

Rocky start

On 31 December 2019, the World Health Organization’s Country Office in China first picked up a statement by the Wuhan Municipal Health Commission on cases of ‘viral pneumonia’ in Wuhan, China. Due to the mass internal migration during the Chinese New Year and Wuhan’s geographic location as an important transportation hub in China, the virus started travelling to other provinces in the country since early January 2020. As the virus spread through China, wealth and relationship managers and investment managers suspended travel to China, a key source of offshore wealth in the region. When the China A-share market reopened on February 3, the Shanghai Securities Composite Index declined by nearly 8%. As the virus started appearing outside China, global equity and bond markets reacted sharply.

“You won’t necessarily see pressure in banks’ balance sheets, as central banks will provide support, focusing intensively to keep SMEs alive. If this can be kept into a one to two months issue, it shouldn’t be too much of an impact for banks.” But things were going to get worse before they got better. “COVID-19 had a negative and limited impact on the stock markets of China and other Asian countries in the early stage of the epidemic,” said researchers writing in the Economic and Political Studies (EPS), a peer-reviewed journal hosted by Renmin University of China. Volatility went up in global markets, adding pressure on investments made by borrowing against stocks. In Singapore, DBS evacuated an entire floor in February after one member of staff was confirmed to be infected with COVID-19.

Lockin’ on private banking’s door

The silver lining

Nearly all private banks told Asian Private Banker that they had to resort to meeting clients and disseminating investment and portfolio advice online and via virtual meeting sessions.

Julian Schillinger, co-founder & co-CEO, Privé Technologies, believed t hat t he pa ndemic sped up t he adoption of digita l technologies by three years.

98% of fund managers surveyed by the Investment Management Association of Singapore (IMAS) suspended all employee business travel to China with nearly three-fourths cancelling or deferring their events. At the time, the impact of the virus was not fully assessed as the investment community in the region expected it to be widely limited to China.

“When we spoke to financial institutions (such as insurance companies and banks) a couple of years ago, getting digital was absolutely on their agenda and was already a priority,” he said. But pointing to the change in funding for many financial institutions, he added: “But now, there is much more pressure on that.”

Banks in the region shouldn’t be severely affected if the coronavirus situation can be contained into a “one to two month event”, Credit Suisse said in February.

The adoption of digital tools, actually ended up increasing the intensity and frequency of client interactions as hard-to-pin down UNHWIs were more accessible due to the lockdowns.

Countries started imposing lockdowns, and restricting travel. Meetings were severely curtailed. This hurt the ability of relationship managers to meet private banking clients in a largely relationship-driven industry.

Private banking’s adoption of digital technologies went significantly up as relationship managers struggled to keep in touch with HNW and UHNW clients.

INVESTMENT

“COVID-19 has been fantastically transformational and an accelerant in that space. We have been doing things in the last six months that we didn’t think were possible before,” Philipp Rickenbacher, CEO, Julius Baer told Asian Private Banker. “We might hope to travel again and have face-to-face meetings once things ‘normalise’ in future, but the pandemic has made it imperative that we look at new ways to engage with clients, chiefly through the enlightened use of technology,” Kevin Herbert, managing director and co-head for North Asia at HSBC Private Banking told Asian Private Banker. That addressed an acute need felt by private banking clients. According to an April 2020 global survey of consumers by Kameleoon, 57% of respondents said they were disappointed by wealth management firms’ online response and lack of personalisation. Meanwhile, 67% of respondents said their current online experience will affect future purchases and 37% said they were spending more time online since the COVID-19 crisis. COVID-19 has been accelerating disruptive forces that were already well at work within Asia’s wealth management industry, according to McKinsey & Company.

Managing investments

various remote channels, some of the key objectives of clients haven’t changed,” Santer added. Meanwhile, real assets performed better and are expected to continue to do so as the fallout of COVID-19 becomes more evident. Marie Owens Thomsen, global chief economist and head of intelligence research at Indosuez WM expected real assets to perform better than more liquid assets. In China, the local regulatory push to rein in sales of singlecounterparty credit products sped up. Though that hurt fourth-quarter revenue at Noah Wealth Management, CFO Grant Pan told Asian Private Banker that the company managed to distribute RMB 26.4 billion of standardised products for 2019, an increase of 93.9% YoY. The transaction value of standardised products in the fourth quarter reached RMB 10 billion, representing a significant increase of 580.8% YoY and 30.4% QoQ. The transaction value of mutual funds increased by RMB 16.4 billion, setting a new distribution record for a single year and a single quarter said Pan. The holding up of onshore bonds markets in China in terms of liquidity versus global peers came in handy.

“During corrections in the equity markets, we requested clients to go back to their investment objectives and take a fresh look at their “China’s onshore bond market remained quite liquid through the risk profiles,” Aman Rajoria, head private banking India at Standard period with only a modest widening in bid/ask spreads for on-the-run bonds although trade sizes were smaller,” according to Michele Barlow, Chartered Bank told Asian Private Banker. head of strategy & research for APAC and Senior Investment Strategist In India, from the start of the year where 45% of client assets were in Yichan Shu at State Street Global Advisors. equity, 50% in fixed income, and about 5% in alternatives, allocations to stocks have come down to 30%, fixed income up to 55%, and that of The way ahead alternatives & cash became 15%, Rajoria said. Though China and the rest of the world looks as if it has come out ahead, risks still loom. That was a trend that was witnessed globally, as investors moved into fixed-income and structured products while tapping into alternatives. “We expect the PMI […] to be below the level of 50 in the next few readings, as more export manufacturers in the country face Fidelity’s private banking business flourished with China high yield cancellation in orders and delays in payments,” said Anthony Chan, topped US$1.1billion in AUM due to consistent inflows from Asian chief Asia investment strategist at UBP. China has been ahead of private banking clients. the crisis curve; now it is balancing between stringent infection containment measures and production resumption, he added. A “key product” that Fidelity distributed over the past year through private banks has been the Enhanced Reserve Fund as it focused on With the COVID-19 vaccine rollout experiencing bottlenecks, the “liquidity, stability, and yield”, Johann Santer, Fidelity International’s short-term outlook is “troubled” John Woods, chief investment officer, head of private banking business, Asia ex-Japan told Asian Private Asia Pacific, Credit Suisse told Asian Private Banker. Banker. “Both global GDP and global industrial production will likely begin “It’s fair to say that our strategy hasn’t changed and the Asian Private a “true” post-pandemic recovery from levels far below their respective Banking team aims to be a strong strategic partner to our clients in long-term trends, Woods said. He expects a “forceful” economic the region — regardless of the market environment,” Santer told Asian rebound after February with industrial production growing faster Private Banker. than its long-term average for several years, albeit with ongoing short periods of substantial volatility. “While the impact of the virus outbreak and the volatility in markets certainly keep us busy in our daily contact with clients through 13

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Wang Jingbo: New Decade, Same Mission — Client-Centric & Striver-First

oah Holdings Limited went public on NYSE on November 10, 2010, a date that holds a special meaning: 1 company, of 1 group of like-minded people, builds up their dream from 0 to 1. To celebrate the 10th anniversary of Noah’s listing on NYSE, Wang Jingbo, founder, chairman and CEO of Noah expressed her sincere gratitude to the company’s clients and shared her insights of the company’s past and future. The following is an abridged version of Ms. Wang Jingbo’s speech: Ten years ago, Noah Holdings Limited went public on NYSE. When I first started my business, I said to be there for generations of our clients, and that my whole life will be devoted to wealth management. I still feel the same today as I did 10 years ago, but today means more of a choice than a celebration for me.

I am feel grateful for our clients’ trust and support along the way. At the beginning of the new decade, Noah will continue to respect the market, respect common sense, being Customer-driven and keep striving hard and put strivers first.

Embrace the transformation to “net worth” and “portfolio” products A new decade has begun, and we aim for creating long-term value for our clients by embracing the new era of a volatile market that gears towards net-worth products. This is also a new start point for the wealth and asset management industry in China. Regarding the future, Noah is full of confidence to forge ahead. The wealth management industry in China has been undergoing a revolution accelerated by the COVID-19 pandemic. Evolving around cash pooling and rigid payment, bank financing was in the center of this revolution from 2012 to 2019, while “net worth” and “portfolio” products has quickly become the mainstream in 2020, endorsed by the new asset management rules and promoted by the pandemic, following the “deleveraging” in 2018 and the rectification of the wealth management market in 2019. New demands of our clients have surpassed industry expectations. Following the times, Noah has completed a “paradigm shift” where we got rid of our original path of non-standard fixed-income assets and

our driving forces have transformed from non-standard fixed-income products to standardized funds, from product to integrated services, from product sales to investment consultancy, from sales scale to investment capacity with active management. Noah’s non-standard fixed-income products are being actively paid before their maturity date until we have none left in stock. As of Q2 2020, their proportion in funds raised has been completely replaced by standardized products.

Promote changes in client’s perceptions Investors dislikes volatility by nature, while managers try their best to make investors happy. Madoff once said, “I felt compelled to meet their expectations at any cost, so I began paying old clients' earnings and principal with new clients' money.” Client’s needs are leading business directions, but we need to think about how to satisfy their needs in the right way. The true foundation for industry revolution is more “education for investors”, to change client’s previous perceptions, and to make our clients and peers truly understand the essence of this industry and how it creates value. The robust growth of the industry relies on regulations and selfdiscipline. Only when you are able to create real long-term value for your clients can you bring about continuous positive incentives. The question is: how should wealth and asset management practitioners do this? How can we better inform our clients that different from saving,

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investment comes with risks, and that no rigid payment is not equal to irresponsibility… To stick to client’s needs and goals and help them solve problems requires sincere collaboration between wealth and asset managers, long-term vision of regulators and perception change of investors. All three of them are indispensable and have to be upheld in the long run.

Pursue truth and wisdom as moral responsibility The wealth and asset management industry has three features: firstly, users of products in almost every other industry can tell the product/service quality based on their user experience, while most clients in our industry can’t immediately do so. In fact, not just the clients, even regulators and practitioners in this industry aren’t able to do so. Secondly, client’s interest isn’t fully reflected in the pricing structure of products/services in our industry. Fund managers receive disproportionately high pay that doesn’t necessarily match their contribution to client’s wealth. With very limited service provided for the clients, fund managers still charge management fee regardless of the outcome of the service. Thirdly, the market is chaotic with confusing standards and specious theories, coming from a mixed group of industry practitioners – among them there are many “financial planners”, who don’t really understand products as their job mainly focuses on non-standard fixed-income products. As a result, wealth and asset industry practitioners should receive stringent supervision, take the pursuit of truth and wisdom as our moral responsibility, and consciously avoid any ignorant theory. Moreover, we should truly understand our responsibility to the clients and take care of the asset entrusted to us as if every penny comes from the hard work of our own parents.

The disruptive changes in our industry in the past 20 years originate from the rapid development and the rise of younger clients. Compared with Internet companies, wealth management companies have an incomparable edge of owning sizable and quality teams of professionals. Utilizing digitalization and standardized service process can bring about breakthroughs in capacity ceiling. Therefore, the key to success is to empower our professionals with digitalized practice standards throughout the entire service process. Moving on, any wealth management organization without competitive digital capacity will fail to deliver for clients in a timely manner. It won’t be easy to fully digitalize the way Noah has operated in over the past 15 years, yet we have the courage and more so the responsibility to engage everyone in our organization to play a part. We have already invited some Internet professionals to our team and will continue to discover and promote more aspiring talents to let them shine on bigger stage. “Noah intelligence” is in the making as our business will benefit more from technology.

Turn green train into bullet train We will continue to build deeper trust with our clients. For over eight months, we have been interacting with and listening to our clients and industry peers, learning from best practices both internally and externally, and we are ready to make it happen at the beginning of a new decade, knowing what and how we can achieve with revolutionary visions and solutions. Noah will continue to center around our clients, with our promises to keep up the good throughout this process. I believe that Noah will be the wealth management organization chosen by Chinese people around the world, and draw global attractions.

Ride with the tides of digital transformation At this new beginning, Noah will continue to learn from the best and try to answer the following questions at the core of Noah’s own revolution: how to elevate individual leadership to organizational leadership, how to understand client’s needs appropriately, how to evaluate the service ability of financial professionals, and how to identify financial products accurately by digitalization. The wealth management industry has been around for over 200 years, and the operation pattern of organizations in the industry had remained the same for a very long time. However, in the last 20 years, especially recently, traditional business patterns have started to break down. With the development of the Internet and technology, digitalization has become the new essential for wealth management organizations in an era of more transparent information.

Building 2, Changyang Valley, 1687 Changyang Road, Yangpu District, Shanghai, China 200090 Enquiry no.: 400-820-0025 WeChat ID: NoahGroup Facebook: Noah Holdings Limited Address:

2020

Andreas Zingg chief operating officer Asia Pacific Bank Julius Baer

Anirudha Taparia executive director IIFL Wealth Management Ltd

Anupam Guha head â&#x20AC;&#x201C; private wealth management ICICI Securities Limited

Arnaud Tellier CEO Asia Pacific BNP Paribas Wealth Management

August Hatecke co-head wealth management Asia Pacific country head UBS Singapore UBS Global Wealth Management

Benjamin Cavalli managing director, head of private banking South Asia and Singapore CEO Credit Suisse

Cedric Lizin regional head, private banking, ASEAN, South Asia and global South Asia community Standard Chartered Bank

FranĂ§ois Monnet managing director, head of private banking North Asia, chief executive Hong Kong Branch, Credit Suisse

Joseph Poon group head DBS Private Bank

Lam Leong Yip chief risk officer Asia Pacific Bank Julius Baer

Lok Yim head of international private bank APAC Deutsche Bank

Michael Blake CEO wealth management Asia UBP

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Neo Teng Hwee chief investment officer UOB Private Banking

Nitin Jain MD & CEO Edelweiss Wealth Management

Omar Shokur CEO, Asia Indosuez Wealth Management

Oscar Liu CEO Noah Holdings International Limited

Rishabh Saksena head, investment specialists Asia Bank Julius Baer

Shang Xiao president, Heritvest Family Office co president CreditEase Wealth Management

Simon Godfrey head of products EFG Bank Hong Kong

Sonjoy Phukan global chief operating officer Bank of Singapore

Steven Lo regional head Citi Private Bank Asia Pacific

Tan Siew Meng regional head HSBC Private Banking Asia Pacific

Tee Fong Seng CEO Pictet Wealth Management Asia

Terence Chow CEO, head, RBC Wealth Management Asia RBC Wealth Management Asia

Vincent Chui chief executive Morgan Stanley Bank Asia Limited

Wang Ya general manager Private Banking Centre of Bank of China

Zhao Yue general manager Private Banking Department of China Merchants Bank

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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? Tee Fong Seng, Pictet Wealth Management Asia In a post-pandemic world, we believe technology will be playing a key role, ultimately making bankers and financial experts more effective, precise and targeted in the way they work, hence benefiting clients. But it is key to keep the highly personal nature of wealth and asset management in mind. It takes extensive discussion and interaction person-toperson to develop the relationship and nuanced understanding necessary to tailor solutions to each client’s specific needs. Technology won’t be able to replace that. During the past few months, RMs have had to discover new ways to communicate and interact with clients to remain relevant. Set-up of virtual client calls, and thematic and macro presentations are now part of our RMs’ daily toolkit and help them keep clients informed on a large array of topics. Vincent Chui, Morgan Stanley Bank Asia Limited 2020 has been an excellent trading year, given the volatility and near zero rates, and notwithstanding the economic and human impact of the COVID-19 pandemic. We did not see a slowdown in NNA gathering at all. New account opening was a challenge during the early days of the pandemic, but the regulators have provided guidelines which facilitate remote account opening and for low risk jurisdictions such as China and Taiwan, RMs have resumed travel from Hong Kong or Singapore to meet clients there. I expect new account openings will gradually return to their normal pace. Cedric Lizin, Standard Chartered Bank We have continued to open accounts during the pandemic as we quickly adapted to the unexpected challenges brought about by the pandemic. We have accelerated the implementation of many digital initiatives, including the digitisation of the account opening process. Our quick response has allowed us to continue opening accounts for clients despite lockdowns. Clients have quickly accepted and adopted new ways of engagement — such as via video conferencing instead of face-to-face meetings, and using the mobile app for basic banking services. As an anecdote: we

have an 80-year-old client who was amongst the first to register for our SC Private Bank app when the pandemic hit. The Net New Money performance of our offshore business has been higher in 2020 than in 2019. Anirudha Taparia, IIFL Wealth Management Ltd New asset gathering will remain a challenge while restrictions remain. To adapt, private banks will need to deepen their business intelligence draw on the strength of existing networks to help relationship managers prospect. Businesses need to proactively engage with their clients, intuitively understand their client’s nuanced needs, and then create customised solutions that meet these nuanced needs. Empowering RMs with tools to mine their own client bases or providing actionable intelligence on existing portfolios to deepen wallet share will be key areas to develop. In terms of account opening, the pandemic has ensured that digital account opening is critical – the process will need to be automated to the extent possible while keeping in mind existing regulations and compliance requirements. With clients and RMs used to meeting virtually, it may lead to reduced travels or commutes, improving productivity and efficiency, with resultant cost savings. Also, in an era of restricted or limited interactions, the quality and honesty of communication will become integral. In that regard, technology will act as a great enabler and solutions need to be deployed to ensure that the lines of communication are always open, and the clients are constantly connected to their wealth advisors. Steven Lo, Citi Private Bank Asia Pacific We were fortunate that our capital markets business performed exceptionally well during 2020. We had anticipated strong single digit growth but we ended up with solid double digit performance instead. Despite the inability to travel and meet clients in person, our client acquisition efforts were still quite good. We were able to grow our AUM substantially as clients looked to consolidate their relationships and prospects were impressed by our ability to perform in such an adverse environment. Although nothing beats in-person interaction, I believe our staff were quite focused on engaging prospects and clients virtually on an ongoing basis with advice and curated programming. We will monitor the situation and with some of the easing

of measures happening, albeit slowly in some cases, I believe we will be able to resume some form of in-person interaction — within the guidelines and within the comfort level of both our clients and staff. Terence Chow, RBC Wealth Management Asia A private banker can differentiate his or her value to a client by offering personalised service. During the pandemic, private bankers have had to be more creative in how they do so. This is particularly difficult for new bankers or those who have just moved firms, as they want to meet their clients face-to-face to show respect and build a personal relationship. The industry therefore needs to develop new ways to build trust with clients digitally. A wealth manager’s ability to differentiate and specialise has been critical in order to stand out from the crowd during the pandemic. RBC Wealth Management specialises in helping Asia’s global families, which are families connected to Asia but also Canada, the US and UK for reasons such as education, business, property or lifestyle. As a result of the lockdowns, global families are facing even greater complexity when managing their wealth across borders. By helping them manage their affairs through the pandemic, we have been able to deliver true value beyond commoditised solutions. By taking the time to understand our clients, their goals and drivers, conversations around wealth transfer and mortality have also come to the fore during the pandemic. This is allowing private bankers to offer a broader range of solutions. Oscar Liu, Noah Holdings International Limited “No one is a separated island.” Humanity’s interactions under a lockdown crisis are going through great tests. For private banking services, how to give full play to the advantages of digital transformation and maintain human bonding in front of cold screens at this pivotal moment is one common challenge. To cope with the tough moment, the management team of Noah Holdings has sought to upgrade its current model of RMs serving clients from a single RM model to a teamwork-based “iron triangle” model, so that “talents’ capability gaps” are converted into “capability pools”. Also, the execution of the transformation fulfils to the maximum degree the triple needs of “Know Your Clients“ (KYC), ”Know Your Agents“ (KYA) and

THE FINAL WORD BUSINESS PERFORMANCE ”Know Your Products“ (KYP), in order to digitally perform due diligence, to identify the ability of RMs, and to label the provided fund products. Michael Blake, UBP Three trends in onboarding have supported strong NNM inflows in 2020. First, a shift in prospecting to focus on the domestic markets of Hong Kong and Singapore, supported by the continued growth in family offices there. Second, a renewed focus on External Asset Management, which is leading to significant new client relationships. Finally, we have made some carefully calibrated adjustments to our onboarding processes, to ensure that we can continue to serve clients during the pandemic. Nitin Jain, Edelweiss Wealth Management The pandemic indeed has presented it s ow n s e t of c h a l l e n g e s , but surprisingly for us, it has not been that bad. Within the first few weeks of the lockdown we were able to adapt to the new normal and enable 100% of our employees to work from home. Clients have been very responsive, and we have engaged with them probably better than ever. Our net new money added in 2020 would be similar or better than in 2019 While the new normal may be different from the earlier way of doing things, we think of it as an opportunity to change. For example, I would not be surprised if, in the future, advisors would be able to engage with more clients, thanks to the time they save from less travel and the efficient use of technology. Anupam Guha, ICICI Securities Limited 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 Shang Xiao, CreditEase Wealth Management Digitalisation is an inevitable trend across all industries. KYC and client onboarding processes can now be conducted online with appropriate technology. Even when there are

travel restrictions, we can still acquire targeted potential leads via online live events and convert clients via localised marketing events. We use online live broadcast to share new investment trends and demonstrate digital capabilities, supplemented by localised small-scale marketing activities. Despite the pandemic, CreditEase Wealth Management achieved a 10% YOY growth in the scale of asset allocation from January to September 2020. The number of new investment clients grew by 90% YoY. The average individual adjusted monthly performance of financial planners increased by 29% YoY. Arnaud Tellier, BNP Paribas Wealth Management The private banking industry has been extremely resilient to the crisis and nimble in adapting to the ‘new normal’. Clients too have been an important factor of this transformation and have seamlessly moved to digital and virtual platforms of engagement. Furthermore, this pandemic has been the booster shot that accelerated digital adoption with end users and service providers. We do not see a slowdown or an adverse impact should we continue to be restricted due to the pandemic in 2021. Joseph Poon, DBS Private Bank Our private banking business saw solid growth in spite of the pandemic, and stands on track to ending 2020 on a strong note. This is testament to the trust our clients have in us through both good times and bad, and the resilience of our Chief Investment Office’s advice – in particular the Barbell investment strategy, which is outperforming its benchmark by 5% with +17% YTD return. While challenges (e.g. travel restrictions) hindered our usual way of working, we quickly responded with innovative work-arounds. Examples include setting up “virtual meeting rooms” that, in combination with “docusign workflow”, enabled critical wealth planning discussions to take place. Our already established multi-year digital transformation journey also gave us a head start in quickly and seamlessly moving our client engagements online. Our clients’ digital consumption of our investment research and insights – which had already been availed to them for some time – ballooned from March. The pandemic also highlighted the importance of agility. We were quick to navigate rapidly-changing market conditions, and enabled clients to take advantage of relevant and timely investments, including structured notes that capture nonmarket-directional opportunities and derivatives to participate in volatile markets. Confident in ESG investments’ risk-mitigation and long-term outperformance potential, we also expanded our ESG offerings and relaunched our trademark ESG Outperformance structured products. Omar Shokur, Indosuez Wealth Management Interestingly, in terms of net new money and new account openings, 2020 was a relatively good year for us. The strong

relationships with our existing clients have played an important role with regards to client referrals. As a result, we have seen a growth of our UHNWI clients, directly and via our EAM business. We have been working on fewer deals but larger ones. These transactions take, on average, longer time and need more adapted and complex solutions (single share financing, tailor-made mandates, etc). Thanks to the strength of the Crédit Agricole Group, we have been able to meet the requirements and achieve some sizeable transactions. We will continue with this approach throughout 2021 — travel restrictions may remain in place for a while — and we expect that a successful vaccine deployment will lead to a normalisation at the end of the year. For us, it has also meant that we are accelerating our work to automate client onboarding processes. August Hatecke, UBS Global Wealth Management We believe there are still many opportunities for the wealth management industry ahead as long as we are ready to act diligently to different situations and challenges. The most important issue right now is that we stay close to our clients, bring them ideas to help them navigate the current volatility. In 3Q20, we achieved US$10.1 billion of NNM, which was the highest quarter for 2020. In our recent client survey, we saw a significant increase in improved satisfaction with the bank and with our client advisors. This is a reflection of our commitment to deliver a best-in-class experience to all clients. The pandemic is transforming the way we do business and how we operate – the industry has to increase automation and digitalisation. Our digital readiness has prepared us for all situations. Digital is innate and automatic in our business, transforming the way we work and how we engage clients. This COVID-19 outbreak has not made our business "become digital" but it has accelerated our plans and facilitated our investment advisory the same way it has done all along. Our hybrid client service model from high-tech to high-touch ensures that there is no compromise to our best-in-class service. Wang Ya, Private Banking Centre of Bank of China Despite the challenging environment, the private banking industr y has remained resilient. COVID-19 and further lockdowns are likely to fundamentally change our operating models, as well as client expectations and investment strategies. At BOC, we are striving to transform our sales and service operation models, adapt our product suites and equip staff with the tools and technologies to effectively serve customers. The shift to digital is accelerating with the establishment of our innovative CIO platform.

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In what ways has the COVID-19 pandemic irrevocably changed the private banking industry and your own bank's approach to operations and service?

Tee Fong Seng, Pictet Wealth Management Asia The financial industry has had to rapidly evolve and adapt under the new circumstances of the COVID-19 pandemic. This posed challenges as well as opportunities for the banking sector. Challenges, as most industries, if not all, have seen a compression of revenues and increase in costs, which is likely to lead to more consolidation. The pandemic has also brought opportunities for the sector, accelerating the pace of digital transformation among private banks â&#x20AC;&#x201D; to mention just one. As far as Pictet is concerned, we have always been focused on organic growth, so we were not affected by this wave of consolidation. We have always believed in acquiring one client at a time, hiring one staff member at a time, a strategy that has been working very well for us. At the same time, we have had to develop new ways of communicating with clients, through webinars or video calls, while most of our staff was working from home. We believe this digital transformation will pave the future for an industry that was, until not too long ago, relying almost entirely on face-to-face interactions. FranĂ§ois Monnet, Credit Suisse Private Banking Asia Pacific COVID-19 has without a doubt accelerated technology adoption and has spurred a survival-of-the-fittest landscape. Companies that are able to adapt, innovate and evolve their business model to capitalise on opportunities in the digital world will thrive. At Credit Suisse, our continuous innovation journey in the last few years has placed us in good stead to be the private bank that is at the forefront of technological innovation. As digitalisation remains a key strategic long-term driver and enabler of sustainable business growth, we have continued investing in and strengthening our digital capabilities. In 2020, we rapidly exploited our innovative and pioneering digital private banking platform and channels since the start of the pandemic to drive digital engagement with clients on a larger and broader scale. There was an almost instantaneous adjustment of our service delivery model where our business traffic on Credit Suisse Chat and our Digital Private Banking platforms surged and an exceptionally high volume of trades was executed. We continue to communicate via innovative channels and approaches, such as webinars, calls, podcasts and videos to update clients on key investment themes. Through these channels, we provided thought leadership and guidance to our clients, and we expect technology and digitalisation to only become more prevalent as we move forward. For us, ensuring that our digital capabilities are at the leading edge is key to making Credit Suisse fit for the future.

Vincent Chui, Morgan Stanley Bank Asia Limited The pandemic has unwittingly acted as a catalyst for investors, banks and regulators to accept and embrace technology as a legitimate communication and governance tool. It has compelled investors and RMs to get comfortable with virtual meetings rather than physical ones. It has also forced individual banks to have a reality check of their remote technology competence and business continuity planning. The pandemic may well prove to be the most significant enabler of fintech and regtech in the financial services industry. Cedric Lizin, Standard Chartered Bank The private banking industry as we know it, characterised by high-touch and personal relationships, has adapted in 2020 with the pandemic. While the industry was gradually embracing digital, the pace greatly accelerated in 2020. We witnessed an uptick in digital adoption rate. New client sign-ups to our SC Private Banking app increased over 30% in 2020 and the average time spent on the app increased too. Many initiatives already in the works have been fast-tracked. These were primarily initiatives that improve our engagement with clients, the productivity of our bankers, and the efficiency of internal processes. For instance, we accelerated the digitalisation of our account opening process and are now using video-calls to verify identity documents, and e-signatures for account opening documents instead of wet signatures on hard copies. We rolled out new features in our mobile app, such as more personalised content or dynamic portfolio performance views. We launched a video-based roleplay training programme for RMs to practise and perfect their virtual client communications skills through a series of scenarios. Next to these client-facing initiatives, we digitalised a series of internal processes, such as moving to e-instructions and removing all paper exchanges between departments. This has greatly improved the turnaround times of many of our internal processes. Finally, we are engaging with our offshore clients through video calls instead of travelling. We see a hybrid model of engagement becoming a norm in private banking where clients increasingly use digital channels to engage with us â&#x20AC;&#x201D; in addition to direct interactions with the RM.

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Anirudha Taparia, IIFL Wealth Management Ltd One of the main things that COVID-19 has precipitated is an active shift towards risk management. The events of the year gone by, whether it was the pandemic itself or measures such as lockdowns and social distancing taken to halt the spread of the pandemic, have put a spotlight on risk management. While most organisations, including ours, had a Business Continuity Plan (BCP) in place, implementing the same effectively was the differentiator and I believe we scored well. Further, the pandemic has highlighted the relevance of technology and the integral role that it is going to play in the organisation of the future. With homegrown expertise, a dedicated team, strong balance sheet and technological edge, we have emerged as one of the leading players in the Indian wealth management industry. Sonjoy Phukan, Bank of Singapore The wealth management industry was already responding to digital disruption before the COVID-19 pandemic. However, the pandemic has presented us with many uncertainties – from economic outlooks and operating models to client behaviours and the pace of digital adoption. For some organisations, near-term survival is the only item on their agenda. It has tested how well we, as leaders, peer through the fog of uncertainty, proactively plan for recovery and effectively lead and thrive in the next normal. At Bank of Singapore, we have significantly accelerated our digital roadmap with a focus on client experience. Time-to-market has been reduced from months to weeks or days. We recognise that competing and winning in the new normal will require a new approach, one where we shift away from traditional organisational structures, behaviours, tools and processes. The pandemic has not only reshaped our clients’ expectations, but also forced us to adapt and pivot quickly. Our view remains that the RM will remain central to the advisory model, but supported by strong digital capabilities. COVID-19 has reinforced our digital narrative in two ways that will be imperative to our transformation in 2021, and beyond. Firstly, the ability to deliver personalised content and alerts to clients through their desired channels, while also keeping our RMs informed. And, secondly, the increase in digital adoption, together with an increasingly demanding client base, will mean that we need to offer more self-serve capabilities to our clients. Steven Lo, Citi Private Bank Asia Pacific To a certain extent, we were taken by surprise by how this pandemic would deeply alter our lives and the way we work. Although we do have WFH (work from home) systems set up, we had never tested them that widely and so we had to catch up fast — and we did. Admittedly it was awkward at first as VPN phones are a bit cumbersome and the availability of other equipment like laptops may have been low. But I am proud to say that our staff did an amazing job at adapting and making sure we were up and running quickly — to the extent that clients really didn’t see any interruptions to our ability to serve them.

I think being a large organisation enables us to be able to draw from built-in backup and resources that a small firm would not have. The most important lesson and observation made during this time is not to underestimate the value of the adaptability and dedication of your staff. Without that mindset, your business will always be at risk. I am grateful and also proud that our staff have that mindset to overcome challenges in their determination to serve our clients. Terence Chow, RBC Wealth Management Asia The private banking industry has proven itself to be very resilient. When the need arose, the pandemic showed how quickly the industry can make decisions and implement technology solutions. It would be great to see this innovation continue. Across the board we have seen higher levels of client engagement, with conversations becoming much more personal. We believe this trend will continue, as restrictions ease and there is a return to ‘normality’. Like all businesses, RBC Wealth Management made a number of changes to the way we operate in response to COVID-19. Solutions were quickly identified and put into place to maintain service levels and operations and to strengthen client relationships. Virtual meetings quickly became the norm and, in particular, we have found connecting with colleagues worldwide to be far easier, with everyone adjusting to technology and time zones to coordinate and serve our clients’ multijurisdictional needs. Michael Blake, UBP We have become more digital in terms of how we work with clients and across teams. This is here to stay. However, in the past, the digitalisation debate was often presented as a zero-sum game between the competing models of robo-advisory and high touch relationship management. COVID-19 has shown that digitalisation isn’t just about building “low-touch” client systems, but is also about ensuring strong IT resilience to support higher-touch relationship management, which UHNW clients rightly expect. Nitin Jain, Edelweiss Wealth Management Though 2020 was a year of crisis, in many ways it was also a catalyst for transformation – be it the way we do business or how we manage our day to day lives. We could have never imagined a world where we are able to engage with our clients so meaningfully over the digital platform. Interestingly enough, we have been able to add net new money, onboard new clients, and were able to execute significantly large transactions without having to meet the client physically — which before COVID-19 was unheard of. Even our NPS score has gone up in the last year, which has added to our delight.

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Anupam Guha, ICICI Securities Limited 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. CICI 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. Lok Yim, Deutsche Bank Digitalisation is a critical part of the private banking industry’s efforts to respond to the impact of COVID-19. As a bank, we are well-equipped to handle day-to-day business remotely. Our systems are fully set up and operational with fantastic IT support to see us through this crisis. Furthermore, our CIO and the investment team are well geared to work through the potential economic impact of COVID-19 and create robust and diversified portfolios to meet the current challenges. Early in 2020, we launched our Strategic Asset Allocation (SAA) fund offering to help our clients focus on the long term and build their core portfolios by harnessing the expertise and robustness of our portfolio construction and capital market assumptions. Empirical evidence shows that long-term portfolio performance comes from asset allocation and the right investment strategy, rather than from market timing. Therefore, it is imperative that investors should focus their attention on constructing a well-diversified asset allocation strategy. Our robust approach to SAA helps our clients mitigate the adverse effects of volatility and build their core portfolio over the long term, with the option of advanced risk controls. We believe it is necessary to factor in the level of uncertainty that can be applied to each parameter of each forecast. SAA can create portfolios that are less sensitive to adverse market conditions, avoid the additional costs required to adjust portfolios that rely on more uncertain forecasts, and have higher potential for growth over the long term within a given level of risk.

Shang Xiao, CreditEase Wealth Management Offline servicing was dominant in the private banking sector. We used to acquire new customers and establish trust via frequent face-to-face interactions. During the pandemic, various restrictions greatly affected traditional financial services, but also made customers more likely to accept digitalisation. In this sense, we have been able to embrace customers through digital channels, which has contributed significantly to our growth. Our long-term accumulated digital capabilities have helped us make breakthroughs in several dimensions, such as providing investor education services via live broadcasts; digital marketing via apps, WeChat, SEO, and SEM [search engine marketing]; allowing end-to-end online transactions; and realising a 1 + N professional team service model via online interaction, where one account manager serves as the contact point for the professional service team and various product/service experts. Arnaud Tellier, BNP Paribas Wealth Management COVID-19 has demonstrated the resilience of the human spirit to surmount challenges and quickly adapt to the 'new normal’. Although the current pandemic is not something that anyone could have anticipated, it provides a perfect opportunity for testing the agility and efficiency of front and back office-focused digital solutions that we have developed. We have redefined workflows, streamlined operations and rewritten the rules of engagement. We adapt to an evolving situation in the various markets in which we operate in order to ensure the safety of staff and continue to provide service and support to clients as much as we can. Many of our client-centric applications are already available on myWealth, our e-banking platform. The launch of myAdvisory, the digital leg of our advisory service, in mid-2020 is a major step for us in blending human and technological capabilities to deliver the full value of BNP Paribas Wealth Management offerings to clients. In addition, we use traditional tools (such as emails and phone calls) and non-traditional tools (including webinars and audio conference calls) to update clients on various investment opportunities. We will continue to make full use of digital tools in client interactions and expect that such formats will become an important and regular feature in our business model. Joseph Poon, DBS Private Bank COVID-19 has been an unprecedented jolt to our industry. However, our established digital platform allowed us to nimbly move client interactions online when COVID-19 emerged. In fact, the ease of using our virtual channels helped to increase, enhance and enrich our client conversations. Our digital platform was an added enabler in giving clients uninterrupted access to our insights, advice and support throughout a period of great market uncertainty in 2Q20. DBS iWealth, our digital banking and wealth management platform where over 80% of our wealth clients are registered users, allowed them to monitor and manage their portfolios from the comfort, convenience and safety of their homes at all times. With the pandemic’s long shadow continuing to loom over us for some time to come, our digital capabilities will continue to play an important role in ensuring our clients have access to our advice, and tools to monitor and manage their investments in what is likely to remain choppy markets in the months ahead.

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Omar Shokur, Indosuez Wealth Management The COVID-19 pandemic has forced the industry to be able to adapt to a fully work-from-home scenario. Doing this whilst still providing a seamless client experience is no small feat. Basically the industry, globally, has readied itself to be operating fully functional according to the most extreme backup plan for prolonged periods of time.

Tan Siew Meng, HSBC Private Banking Asia COVID-19 pandemic has definitely accelerated the adoption of digital technology within the banking industry. In the absence of travel, we have grown accustomed to virtual meetings, which has helped us build our relationships with clients in these unprecedented times. At HSBC, we are committed to investing in our digital banking capabilities to support and enhance personal services to clients. August Hatecke, UBS Global Wealth Management Despite COVID-19, UBS Global Wealth Management in APAC has seen growth in our performance and is the strongest region with record profit before tax (PBT) growth in Q3 2020. This recent quarter marks the best Q3 and best 9M PBT in a decade globally. We are the first in the industry to achieve US$500 billion in invested assets. UBS Global Wealth Management in APAC today contributes 30% to UBS Global Wealth Management overall. We understand our clients beyond their wealth needs and we have stayed close to them during the pandemic. Our most recent client survey can testify to that: about 90% of our clients are happy and satisfied with UBS (87%) and their Client Advisors (92%). We adapt and engage our clients virtually in a seamless manner. Our digitalreadiness has prepared us for all situations. This outbreak has accelerated our plans and our hybrid client service model from high-tech to high-touch. This model ensures that there is no compromise to our service. So even without meeting our clients, we are talking to them every day on the phone and video conferences. The COVID-19 outbreak has created new ways of doing business. Some of these innovations will remain post-COVID-19. However, video calls and virtual events will not replace the basic human need for face-to-face interactions. Will there still be business travel? For sure. Do we need to travel as much as before? That is the question. Our client engagement increased substantially in 2020 with clients having more time to discuss investments and the use of video calls. Our CIO team, client advisors and solutions specialists interacted more with clients, with more meetings, increased productivity and effectiveness. We believe that this is the new normal.

Our client events have gone virtual and a hybrid model of virtual cum physical can be expected after COVID-19. Our flagship event, UBS Year Ahead 2021, themed, The Next Big Thing, will be held virtually in January for the first time ever. The silver lining is the ability to access UBS’s global network of subject matter experts. For our clients, the experience would be akin to attending a global conference with experts speaking from NYC, London, Shanghai. This easier access to our first class network will irrevocably upgrade what we can offer clients in future. Client needs have changed with COVID-19 and we believe that there will be many more conversations on wealth planning and succession planning topics. Hence clients will be looking to work more closely with private banks that have the ability to offer a holistic one bank approach. Our UBS Wealth Way provides advice beyond investments. We continued to adapt and innovate during this time. For example, given travel restrictions, we launched a Digital Onboarding process for Singapore in August. With the UBS Welcome App, prospects can certify ID copies with the ease of a video call, which will help eliminate travel needs for ID verification. In fact, the COVID-19 outbreak does not make our business “become digital”, it simply accelerated our plans and helped to make some decisions faster. At UBS, we always consider employee health and well-being as our top priority. We listen to our staff all the time, we understand everyone has difference challenges during the outbreak and while we enable most of our staff WFH, we support our employees to ensure that they are comfortable, safe and healthy by offering a wide range of health benefits and wellness programmes in order to lead our staff a healthier lifestyle.

Wang Ya, Private Banking Centre of Bank of China The COVID-19 pandemic has inevitably affected the private banking industry, which has traditionally relied on customised and face-to-face servicing. At the same time, the pandemic has brought opportunities for the further development of customer relationship management and business models. Firstly, we have seen growing demand for inheritance services. The pandemic outbreak enhanced customers’ risk management awareness, leading to a greater demand for services such as family wealth protection and family trust service. Also, the pandemic has accelerated the need for online and digital services across the advisory process. In order to break through the "time and space limitations" to serve our customers, we have actively adapted to the trend of online transformation and increased investment in systems and mobile application development. Despite the fact that the pandemic has inevitably discouraged face-to-face interactions with customers to exchange ideas , it has not prevented us from accurately delivering high-quality services to our customers in need.

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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?

Benjamin Cavalli, Credit Suisse Private Banking Asia Pacific Accessing onshore wealth across Asia can be complex due to varied business and regulatory environments in this vastly heterogeneous region. At Credit Suisse, we believe in having a strong onshore strategy, which will continue to be a top priority for us. We have been expanding our regional footprint into onshore markets and now have the most diversified onshore/offshore footprint in the industry, and are well positioned to capture opportunities in the region. Beyond the Hong Kong and Singapore regional wealth hubs, we have built very successful onshore businesses for over 10 years in the largest wealth markets in the region. Since 2017, we have expanded our onshore wealth management services to cover Australia, India, Japan, and Thailand. We also serve clients based in Indonesia, Malaysia, the Philippines and Taiwan clients through our international hubs. We are the only true global player that is welldiversified in APAC as we are geographically spread across the whole region. We will continue to evaluate opportunities to make the most of our well-established investment banking footprint across the region, where it has a decadeslong history in most markets. Another key focus is to cement our position as the “Bank for Entrepreneurs” in every market. Vincent Chui, Morgan Stanley Bank Asia Limited H i s t o r i c a l l y, “o n s h o r i n g ” f o r i nte r n at i on a l b an k s i n we a lt h management has been a challenging task. For those that have had a long presence in key onshore markets such as Japan, Taiwan, Korea and India, their market share remains dwarfed by the big local onshore banks. Would emerging onshore opportunities in China or Thailand be different? Maybe, and different banks have different regulatory risk appetites and resources to explore onshore opportunities. For the UHNW segment, customers have very distinct onshore and

offshore needs. International banks are in an excellent position to satisfy their offshore needs and, through collaboration with onshore players, can provide global products white-labelled as onshore products. As these economies grow and the number and size of the UHNW segment expands, there are more than enough opportunities for international banks to operate an offshore model profitably in the next five years. Cedric Lizin, Standard Chartered Bank We see the trend of more individuals keeping their wealth onshore in Asia. We are looking at two opportunities in this respect: expanding onshore and offering offshore solutions based on onshore assets. Many HNW individuals have their businesses and assets onshore and need funding and wealth advice. This presents tremendous opportunities for Standard Chartered as we have had an onshore presence in many markets in Asia for a long time — some for more than 160 years. Our onshore Commercial Banking and Corporate Banking businesses for example already cover the businesses of many HNWIs and UHNWIs. Today, we have a wealth management offering in 13 Asian retail markets onshore on top of a global private banking offering. We are considering the needs of our affluent and HNW/UHNW clients holistically in order to provide an integrated offering to service this continuum of clients. We are also exploring onshore JV opportunities with local players in a couple of markets in Asia. Thanks to Standard Chartered’s extensive onshore presence in emerging markets, we are already offering solutions to clients where they can make investments offshore based on their assets onshore. We are working on expanding such solutions. Steven Lo, Citi Private Bank Asia Pacific Citi has an onshore setup in Hong Kong, Singapore, and India where we serve clients from around the region. Setting up operations onshore is a serious endeavour and not to be taken lightly. It cannot be a “hobby”. The challenge in making an onshore operations viable is

to ensure that you have enough product and service differentiation to compete in that local space. For instance, take the Greater Bay area. We could look at a potential local setup there because we can draw on the strength of the insights and experience of our Citi network, which already has a presence there. Terence Chow, RBC Wealth Management Asia In Singapore, the industr y and government have been making it more attractive for family offices to move their operations onshore. The point is not necessarily to bring all assets onshore, but to create a hub for family offices to operate and thrive. The industry and government have been very accommodative and innovative with new structures such as Variable Capital Companies (VCC), which attract capital that may have otherwise been used within an offshore fund. A number of wealthy families from around the world have chosen Singapore and Hong Kong as their new or alternate home bases in the region in order to access local markets and talent and to benefit from preferential tax treatment. Hong Kong is already an onshore market due to both domestic Hong Kong SAR wealth and the accelerated inflow of Chinese wealth from individuals who are coming to live in Hong Kong, and the outlook is extremely positive. Through the A share Stock Connect scheme, and as the GBA Wealth Management Connect scheme evolves, Hong Kong should thrive as a hybrid onshore-offshore market. Michael Blake, UBP International wealth management remains our core proposition: we see increasing flows to international financial centres, particularly Hong Kong and Singapore, supported by the growth of family offices in the region and the continued internationalisation of regional wealth. At the same time, we retain an open mind about domestic partnership opportunities. Local client proximity combined with international investment expertise is a winning combination on paper. The question is how best – and with whom – to bring it to life.

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Nitin Jain, Edelweiss Wealth Management The Indian wealth management industr y is largely an onshore business due to capital account convertibility restrictions. Indians have historically been big investors in traditional asset classes like real estate and gold, and it is only now they are beginning to understand the value of asset allocation and diversification. Alternatives as an asset class are beginning to emerge, and Indian investors – both institutional and individuals who have had very limited exposure to the private markets – are beginning to take interest. Anupam Guha, ICICI Securities Limited 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. Lok Yim, Deutsche Bank We c o m b i n e d o u r We a l t h Ma n a g e m e nt a n d P r i v at e a n d Commercial Business International units into a new International Private Bank in June 2020, serving 3.4 million private, wealth and commercial clients. The International Private Bank brings together Wealth Management’s globally connected clients across Germany, Europe, the Americas, Asia and the Middle East and Africa, along with private clients and small and mediumsized enterprises in Italy, Spain, Belgium and India. The business has around €250 billion of assets under management and a combined revenue of approximately €3 billion. Combining our internationally focused Private Bank businesses is allowing us to make the most of each other’s strengths and develop our market share within and across local markets. We will be able to provide greater access for private banking clients to our wealth management capabilities and to combine forces to offer superior digital services to our private, wealth and commercial clients. Shang Xiao, CreditEase Wealth Management Because of the pandemic and SinoUS trade tensions, customers prefer

investments in defensive assets and believe China is a better choice relative to the US. Customers are more aware of the importance of long-term asset allocation of primary market and alternative investments by value investing. Meanwhile, we found that customers care more about health insurance plans and enterprise sustainability. Are they sufficiently prepared? Can their enterprise be passed on smoothly to the next generation? These uncertainties for the future can be solved through our Family Office inheritance scheme. On the other hand, most wealth management institutions are in the process of transforming and digitalising. In the past few years, CreditEase accumulated its own experience as a financial technology enterprise, which we can share with traditional institutions to empower them to execute a smooth transition. Arnaud Tellier, BNP Paribas Wealth Management Onshoring is definitely a longterm wealth trend and gaining momentum in Asia. Local players have become more sophisticated. BNP Paribas has a long-term presence in most major Asian countries and we will make the most of this presence strategically in key markets across Asia over time. We already have a strong onshore presence in Taiwan and are looking to implement best practices from our successes there, as we implement a model, unique to each onshore market. Joseph Poon, DBS Private Bank Asia remains the outstanding region for wealth creation and management. ASEAN in particular is starting to shine, due to factors such as the reshoring of supply chains to certain markets in the region, and rising affluence driving domestic consumption. Since last September, we have been collaborating with our onshore business in Thailand to provide Thai HNWIs access to our private banking offering in Singapore. Beyond access to global investment opportunities, this allows them a means to diversify their existing investment portfolio. It’s still early days, but response has been positive and we are on track to meet our growth target of doubling our wealth AUM in Thailand from SG$4 billion to SG$8 billion by 2023. The other exciting market for us is the Philippines. We kicked off some discussions in 2019 and are still in the midst of structuring the best way to tap on the growing onshore HNWIs’ increasing investment appetite, and giving them access to our established wealth management platform in Singapore. More clients are looking to Singapore as a lighthouse from which to assess and invest in regional opportunities. DBS, as Singapore’s leading bank with

a strong Asian footprint, network and expertise, stands well placed to advise, support and partner them on this journey. Omar Shokur, Indosuez Wealth Management In terms of wealth management in Asia, we continue to firmly believe in the offshore markets model, predominantly served by the offshore hubs of Hong Kong and Singapore. The laws and regulations in place, the presence of solid regulators, and the depth and breadth of the available talent pool are all important ingredients for clients to choose these markets. Whilst clients may opt to do their day-to-day banking onshore, we believe that for their long-term wealth planning and structuring, they will continue to flock to these well established offshore centres. Tan Siew Meng, HSBC Private Banking Asia We are proactively extending our footprint in Asia, particularly in mainland China and ASEAN. I believe strategically growing our onshore presence can certainly open up material opportunities to serve the fast-growing and increasingly sophisticated private wealth and business needs of new and existing clients. Having this connectivity is central to our growth in Asia which is key to delivering our ambition to become the No. 1 wealth manager in the region. Wang Ya, Private Banking Centre of Bank of China Mainland China remains the most important growth opportunity for the wealth management industry, with the ongoing development of the Greater Bay Area (GBA) cited as a key driver. The announcement of the launch of a Wealth Management Connect Scheme in the GBA is a positive step, although the needs of domestic investors, especially those in mainland China, are still maturing. On 18 December 2020, Bank of China Private Banking released the Report on Family Wealth Management of Chinese Entrepreneurs. The research found that the wealth management needs of (ultra) high-net-worth individuals represented by Chinese entrepreneurs are becoming more comprehensive and diversified. To be specific, their wealth management needs have been gradually expanding from the personal wealth preservation and appreciation to family wealth protection, management, gover nanc e and in her it ance, considering all family members as a whole. Customer demand is constantly evolving, and the industry pattern on the supply side is still being explored. It can be said that this is an immense opportunity for the entire wealth management and private banking industry.

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From a portfolio perspective, how important will (a) Chinese assets and (b) alternative investments be for delivering clients’ objectives over the next five years? Benjamin Cavalli, Credit Suisse Private Banking Asia Pacific Accessing onshore wealth across Asia can be complex due to varied business and regulatory environments in this vastly heterogeneous region. At Credit Suisse, we believe in having a strong onshore strategy, which will continue to be a top priority for us. We have been expanding our regional footprint into onshore markets and now have the most diversified onshore/offshore footprint in the industry, and are well positioned to capture opportunities in the region. Beyond the Hong Kong and Singapore regional wealth hubs, we have built very successful onshore businesses for over 10 years in the largest wealth markets in the region. Since 2017, we have expanded our onshore wealth management services to cover Australia, India, Japan, and Thailand. We also serve clients based in Indonesia, Malaysia, the Philippines and Taiwan clients through our international hubs. We are the only true global player that is welldiversified in APAC as we are geographically spread across the whole region. We will continue to evaluate opportunities to make the most of our well-established investment banking footprint across the region, where it has a decadeslong history in most markets. Another key focus is to cement our position as the “Bank for Entrepreneurs” in every market. Vincent Chui, Morgan Stanley Bank Asia Limited H i s t o r i c a l l y, “o n s h o r i n g ” f o r i nte r n at i on a l b an k s i n we a lt h management has been a challenging task. For those that have had a long presence in key onshore markets such as Japan, Taiwan, Korea and India, their market share remains dwarfed by the big local onshore banks. Would emerging onshore opportunities in China or Thailand be different? Maybe, and different banks have different regulatory risk appetites and resources to explore onshore opportunities. For the UHNW segment, customers have very distinct onshore and offshore needs. International banks are in an excellent position to satisfy their offshore needs and, through collaboration with onshore players, can provide

global products white-labelled as onshore products. As these economies grow and the number and size of the UHNW segment expands, there are more than enough opportunities for international banks to operate an offshore model profitably in the next five years. Cedric Lizin, Standard Chartered Bank We see the trend of more individuals keeping their wealth onshore in Asia. We are looking at two opportunities in this respect: expanding onshore and offering offshore solutions based on onshore assets. Many HNW individuals have their businesses and assets onshore and need funding and wealth advice. This presents tremendous opportunities for Standard Chartered as we have had an onshore presence in many markets in Asia for a long time — some for more than 160 years. Our onshore Commercial Banking and Corporate Banking businesses for example already cover the businesses of many HNWIs and UHNWIs. Today, we have a wealth management offering in 13 Asian retail markets onshore on top of a global private banking offering. We are considering the needs of our affluent and HNW/UHNW clients holistically in order to provide an integrated offering to service this continuum of clients. We are also exploring onshore JV opportunities with local players in a couple of markets in Asia. Thanks to Standard Chartered’s extensive onshore presence in emerging markets, we are already offering solutions to clients where they can make investments offshore based on their assets onshore. We are working on expanding such solutions. Steven Lo, Citi Private Bank Asia Pacific Citi has an onshore setup in Hong Kong, Singapore, and India where we serve clients from around the region. Setting up operations onshore is a serious endeavour and not to be taken lightly. It cannot be a “hobby”. The challenge in making an onshore operations viable is to ensure that you have enough product and service differentiation to compete in that local space. For instance, take the Greater Bay area. We could look at a potential local setup there because we can draw on the strength of the insights and experience of our Citi network, which already has a presence there.

Terence Chow, RBC Wealth Management Asia In Singapore, the industr y and government have been making it more attractive for family offices to move their operations onshore. The point is not necessarily to bring all assets onshore, but to create a hub for family offices to operate and thrive. The industry and government have been very accommodative and innovative with new structures such as Variable Capital Companies (VCC), which attract capital that may have otherwise been used within an offshore fund. A number of wealthy families from around the world have chosen Singapore and Hong Kong as their new or alternate home bases in the region in order to access local markets and talent and to benefit from preferential tax treatment. Hong Kong is already an onshore market due to both domestic Hong Kong SAR wealth and the accelerated inflow of Chinese wealth from individuals who are coming to live in Hong Kong, and the outlook is extremely positive. Through the A share Stock Connect scheme, and as the GBA Wealth Management Connect scheme evolves, Hong Kong should thrive as a hybrid onshore-offshore market. Michael Blake, UBP International wealth management remains our core proposition: we see increasing flows to international financial centres, particularly Hong Kong and Singapore, supported by the growth of family offices in the region and the continued internationalisation of regional wealth. At the same time, we retain an open mind about domestic partnership opportunities. Local client proximity combined with international investment expertise is a winning combination on paper. The question is how best – and with whom – to bring it to life. Nitin Jain, Edelweiss Wealth Management The Indian wealth management indust r y is largely an onshore business due to capital account convertibility restrictions. Indians have historically been big investors in traditional asset classes like real estate and gold, and

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it is only now they are beginning to understand the value of asset allocation and diversification. Alternatives as an asset class are beginning to emerge, and Indian investors – both institutional and individuals who have had very limited exposure to the private markets – are beginning to take interest. Anupam Guha, ICICI Securities Limited 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. Lok Yim, Deutsche Bank We c o m b i n e d o u r We a l t h Ma n a g e m e nt a n d P r i v at e a n d Commercial Business International units into a new International Private Bank in June 2020, serving 3.4 million private, wealth and commercial clients. The International Private Bank brings together Wealth Management’s globally connected clients across Germany, Europe, the Americas, Asia and the Middle East and Africa, along with private clients and small and mediumsized enterprises in Italy, Spain, Belgium and India. The business has around €250 billion of assets under management and a combined revenue of approximately €3 billion. Combining our internationally focused Private Bank businesses is allowing us to make the most of each other’s strengths and develop our market share within and across local markets. We will be able to provide greater access for private banking clients to our wealth management capabilities and to combine forces to offer superior digital services to our private, wealth and commercial clients. Shang Xiao, CreditEase Wealth Management Because of the pandemic and SinoUS trade tensions, customers prefer investments in defensive assets and believe China is a better choice relative to the US. Customers are more aware of the importance of long-term asset allocation of primary market and alternative investments by value investing. Meanwhile, we found that customers care more about health insurance plans and enterprise sustainability. Are they sufficiently prepared? Can their enterprise be passed on

smoothly to the next generation? These uncertainties for the future can be solved through our Family Office inheritance scheme. On the other hand, most wealth management institutions are in the process of transforming and digitalising. In the past few years, CreditEase accumulated its own experience as a financial technology enterprise, which we can share with traditional institutions to empower them to execute a smooth transition. Arnaud Tellier, BNP Paribas Wealth Management Onshoring is definitely a longterm wealth trend and gaining momentum in Asia. Local players have become more sophisticated. BNP Paribas has a long-term presence in most major Asian countries and we will make the most of this presence strategically in key markets across Asia over time. We already have a strong onshore presence in Taiwan and are looking to implement best practices from our successes there, as we implement a model, unique to each onshore market. Joseph Poon, DBS Private Bank Asia remains the outstanding region for wealth creation and management. ASEAN in particular is starting to shine, due to factors such as the reshoring of supply chains to certain markets in the region, and rising affluence driving domestic consumption. Since last September, we have been collaborating with our onshore business in Thailand to provide Thai HNWIs access to our private banking offering in Singapore. Beyond access to global investment opportunities, this allows them a means to diversify their existing investment portfolio. It’s still early days, but response has been positive and we are on track to meet our growth target of doubling our wealth AUM in Thailand from SG$4 billion to SG$8 billion by 2023. The other exciting market for us is the Philippines. We kicked off some discussions in 2019 and are still in the midst of structuring the best way to tap on the growing onshore HNWIs’ increasing investment appetite, and giving them access to our established wealth management platform in Singapore. More clients are looking to Singapore as a lighthouse from which to assess and invest in regional opportunities. DBS, as Singapore’s leading bank with a strong Asian footprint, network and expertise, stands well placed to advise, support and partner them on this journey.

Omar Shokur, Indosuez Wealth Management In terms of wealth management in Asia, we continue to firmly believe in the offshore markets model, predominantly served by the offshore hubs of Hong Kong and Singapore. The laws and regulations in place, the presence of solid regulators, and the depth and breadth of the available talent pool are all important ingredients for clients to choose these markets. Whilst clients may opt to do their day-to-day banking onshore, we believe that for their long-term wealth planning and structuring, they will continue to flock to these well established offshore centres. Tan Siew Meng, HSBC Private Banking Asia We are proactively extending our footprint in Asia, particularly in mainland China and ASEAN. I believe strategically growing our onshore presence can certainly open up material opportunities to serve the fast-growing and increasingly sophisticated private wealth and business needs of new and existing clients. Having this connectivity is central to our growth in Asia which is key to delivering our ambition to become the No. 1 wealth manager in the region. Wang Ya, Private Banking Centre of Bank of China Mainland China remains the most important growth opportunity for the wealth management industry, with the ongoing development of the Greater Bay Area (GBA) cited as a key driver. The announcement of the launch of a Wealth Management Connect Scheme in the GBA is a positive step, although the needs of domestic investors, especially those in mainland China, are still maturing. On 18 December 2020, Bank of China Private Banking released the Report on Family Wealth Management of Chinese Entrepreneurs. The research found that the wealth management needs of (ultra) high-net-worth individuals represented by Chinese entrepreneurs are becoming more comprehensive and diversified. To be specific, their wealth management needs have been gradually expanding from the personal wealth preservation and appreciation to family wealth protection, management, gover nanc e and in her it ance, considering all family members as a whole. Customer demand is constantly evolving, and the industry pattern on the supply side is still being explored. It can be said that this is an immense opportunity for the entire wealth management and private banking industry.

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What key investment themes shape your bank’s 2021 outlook — and why? Tee Fong Seng, Pictet Wealth Management Asia Our key investment themes for 2021 are premised on the idea of a synchronised economic and corporate earnings growth. A big rebound in earnings for cyclicals and energy stocks, leading to a market rotation away from the winners of the pandemic. We think smaller caps will do well in this broadening recovery and that M&A will pick up. At the same time, we continue to like big internet stocks, whose growth momentum we believe will remain strong. The shape of recovery plans means that infrastructure and environmentally themed investments will be in vogue. We believe that hedge fund strategies like Macro and Event-driven will shine again, as volatility and dispersion between and within markets rise again. Developed-market government bonds stand to deliver negative returns, but we still see select areas of interest in credit and emerging-market bonds. We believe China’s robust recovery will continue in 2021, when we expect fullyear growth to be 9.3% compared with 2.1% in 2020. But within a broad EM recovery, we believe country selection will be especially important, because not all economies are equal. We expect emerging-market currencies, including the RMB, to make headway against the US dollar, which is set to weaken. Benjamin Cavalli, Credit Suisse Private Banking Asia Pacific The pandemic situation has generated more client interest in a professional and dedicated portfolio. On the investment front, we will continue to stay close to our clients and provide de-risking investment strategies as well as selective positioning in blue-chip equity, gold and investment-grade bond. We often advise our clients not to time the market but to focus on value. This underpins the importance of having managed solutions as a core part of portfolio construction for sustainable returns, downside risk mitigation and efficient participation in specific markets, sectors or themes. We are looking into a diverse set of investment opportunities, including an ecosystem enabled with the explosive growth trends — global 5G connectivity, China healthcare that is supported by demographic change, as well as education technology that has a strong investment case, as evidenced by its growth during the pandemic. We continue to build on our annual Credit Suisse flagship private equity programme, which offers a multi-strategy private equity solution that serves as a building block for our client’s alternatives allocation. Vincent Chui, Morgan Stanley Bank Asia Limited It's a V shaped recovery – keep the faith. Rising COVID-19 cases are a risk but we think this global recovery is sustainable, synchronous and supported by policy, following much of the 'normal' post-recession playbook. Overweight equities and credit against cash and government bonds, and sell USD. Be patient in commodities; we think that index-level returns will be back-loaded. Simon Godfrey, EFG Bank Looking forward, there are prospects for a global economic recovery in 2021, which should support corporate earnings, notably in cyclical areas which suffered in 2020. Other equity

themes will see a continuation of trends, such as healthcare, the climate challenge and changing consumer habits. Active management will be able to differentiate between the winners and losers. Within fixed income, we see little potential from investment grade rates and spreads, except in emerging markets and tactically within high yield. Risks are increasing however, with robust valuations in major markets and the positive economic outlook still being contingent on success in combatting COVID-19. Cedric Lizin, Standard Chartered Bank There are five factors that will define the financial markets in 2021: vaccine distribution, fiscal and monetary policy support, bond yields, the US dollar, and the value versus growth debate. From these, we have drawn several key cyclical and structural themes: Cyclical themes Vaccinating against valuations: Rapid vaccine development suggests 2021 is likely to be a better year than 2020. We expect equities, credit and multi-asset income strategies to perform well. Race for income: Investors are likely to become increasingly innovative when it comes to searching for yield. Therefore, we believe diversified multi-asset income allocation is likely to perform well. Ready, steady, rotate: We expect Value equities to start to outperform Growth and Quality equities. Accelerating economic growth is a key positive driver, though any rise in bond yields is likely to be contained. USD to slump in 2021: We expect USD weakness to extend into 2021. A weak USD is generally good for investment returns as a whole, especially for Emerging Market assets. Structural themes Golden equity themes for 2020s: The next wave of innovation is expected to be driven by permanent changes brought about by COVID-19 in medical tech, Internet-of-Things (IoT) and e-vehicle technology breakthroughs. The time for climate investing: Many factors support the current momentum behind climate investing, including the change in US political leadership. We see four top themes in this space: circular economy, sustainable food, water and a focus on energy transition. In a world of yield-free risk: Generating returns and ensuring downside protection is becoming more challenging. We believe investors will need to take additional risks and/or become more innovative. Anirudha Taparia, IIFL Wealth Management Ltd Risk mitigation will take precedence in 2021 and beyond. This will make controlling volatility a top priority for all portfolios. Investors can follow a core and satellite approach to portfolio construction. This approach entails designing a portfolio with a core investment, which represents the largest portion of the portfolio and various satellite investments which are smaller in size. The premise is that the core portion of the portfolio is invested in relatively safer investments while the satellites can be invested in investments that can

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potentially generate higher returns. This ensures that the portfolio is designed in such a way that it increases the chances of generating the best risk-adjusted returns, keeping in mind the risk-appetite of the investor. Another theme that is expected to emerge in 2021 is renewed focus on alternative investments. With low interest rates and yields dropping further, investors will increasingly gravitate towards alternatives including Real Estate Investment Trusts (REITS) and structured products like Market-Linked Debentures (MLDs). We are looking at providing clients an opportunity to invest in select breakout companies in health tech, EdTech, fintech and other promising sectors through a fund of funds, which will invest in AIFs that provide follow on capital to such tech companies. Rishabh Saksena, Bank Julius Baer Against the macro backdrop of an on-track global economic recovery, backed by unprecedented fiscal and monetary policy support, our preference is for cyclicals and select value stocks, along with a continued focus on IT stocks. On the thematic side, we favour cybersecurity, digital health & life sciences segments. The focus on China will be across asset classes (equities, bonds and currency), with the continuing economic recovery and the new Five -Year Plan as performance catalysts. In the fixed income space, emerging markets hard currency bonds as well cross– over USD bonds offer selective opportunities. Smart energy and smart mobility themes provide opportunities within the sustainable investments spectrum, and alternative investment strategies do so from a diversification perspective. Steven Lo, Citi Private Bank Asia Pacific Our core positioning for 2021 is to ensure clients are fully invested, with a strong overweight to equities at the expense of fixed income. From a thematic standpoint, we are focusing on mean reversion for assets that have underperformed during the pandemic as the world normalises. We also focus on the evolution of the G2 world – China and the US – and its implications for investment opportunities elsewhere. From a thematic build, we retain our focus on “disruptive forces” in technology, healthcare, financial services and transportation. Terence Chow, RBC Wealth Management Asia Equity investment attitudes in 2020 were mostly shaped by the pandemic and by scepticism that life and the economy would ever be the same. In our view, the economic damage of COVID-19 will diminish greatly through 2021, while confidence in a return to a recognisable social and business landscape grows in parallel. Earnings, already in recovery, could surprise to the upside in 2021 and 2022 as some sectors and groups, crippled by the pandemic, return to life. The strong rebound off the deep March market lows suggests to us that investors have already paid in advance for some of that expected return to “normal.” For 12–18 months following the end of a recession, there is usually rapid catch-up growth in both GDP and corporate profits. Thereafter, GDP expansion settles into a trajectory more closely aligned to the economy’s longer-term potential growth rate. The biggest themes that we see playing out in 2021 are, without a doubt, sustainability and the Greater Bay Area. Zhao Yue, Private Banking Department of China Merchants Bank We anticipate that the global economy will enter a phase of resonant recovery in 2021, with further growth in consumption and production. Major overseas economies will probably maintain accommodative monetary and fiscal policies in order to boost economic growth and increase the employment rate.

As for major categories of assets, we are optimistic about commodities benefiting from economic recovery and inflation, followed by stocks as the result of improved earnings. However, the bond market may be constrained to a certain extent. Nitin Jain, Edelweiss Wealth Management i) Increasing allocation to alternatives: with the low interest rate regime and the focus on diversification, India alternatives are taking off in a major way – whether private equity funds, private debt funds, or hedge funds. This will be an important theme for the next decade as clients are looking at opportunities in this space. ii) Diversification into dollar assets: slowly and steadily, Indian clients are becoming more aware of the need to move away from single currency assets, and have started to evaluate opportunities across the globe. iii) Focus on risk & volatility management: the events of last six to nine months have highlighted once again the importance of risk management in portfolios. Increasingly clients have started to value advice and solutions focused not only on returns but also on risk. Anupam Guha, ICICI Securities Limited 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 factorbased, smart beta, low cost passive portfolios. Shang Xiao, CreditEase Wealth Management A vaccination rollout will release suppressed supply and demand and endogenous growth momentum. The US, Europe, and China are basically at the bottom of the inventory cycle and may take the initiative to replenish their inventories in 2021, boosting the global economic recovery. With the new normal of the pandemic and the administering of vaccines in developed countries, global demand in 2021 will increase significantly, so that China's economy will develop from export substitution to demand-driven. We will comply with official policy regarding the technical innovation in China's structural reform. We will focus on the development of strategic emerging industries, modern service industries, infrastructure construction, digitalisation, new energy, and other fields under technical innovation in China's structural reforms. We will optimise the indirect financing structure in the financial capital market, increase the share of direct financing, open up related asset categories, and expand domestic demand for various types of consumer investment. We will seize the asset rotation opportunities in the global economic recovery cycle in 2021: stocks → commodities → bonds → gold → cash.

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We recommend a focus on strong profitability stocks of star companies. The banking and non-banking financial sectors, especially those with lower valuations, may outperform the market significantly in 2021. The opportunity of excess returns in the Chinese stock market lies in those that are less dependent on external factors in terms of maintaining their profitability, and we will recommend our clients to focus on star companies. In 2021, China will enter the stage of "broad currency and tight credit" and its bond market will be in a bull market phase. We prefer RMB assets. In the long run, the proportion of RMB assets in global asset allocation will continue to increase. It is expected that RMB may continue to appreciate in 2021, but the market is not sustainable and relies more on the fluctuation of USD. Vaccines are expected to become widely used in emerging markets in the 3Q21, which may stimulate the rapid growth of their economies. We should pay attention to the good control of the pandemic situation and rely on the recovery of larger emerging market economies for services, tourism and commodity exports. Arnaud Tellier, BNP Paribas Wealth Management Our key investment themes in 2021 focus on economic recovery, on the back of COVID-19 vaccine developments, a strong expected earnings rebound for corporates, as well as continued support for financial markets from a combination of monetary and fiscal stimulus.

We remain positive on secular growth, but are progressively rebalancing portfolios towards a barbell approach with a greater exposure on cyclical and value stocks. We are increasing our conviction on high beta regions such as Europe and global emerging markets and China. With regards to fixed income, we anticipate a moderate steepening of US yield curves, notably as we progress towards a vaccination. However, the absence of a blue wave, and less fiscal stimulus needed if a vaccine is distributed should limit the magnitude of steepening. EUR curves should remain close to current levels with low inflation and strong action by the ECB. We remain constructive on carry strategies on investment grade and high yield. We remain constructive on emerging debt — we keep a preference for Asia, but highlight that flows could positively affect Latin America and Eastern Europe, as well as local currency bonds in 2021. On currencies, we expect moderate dollar weakening against EUR, a constructive long-term view on RMB, more momentum on EM currencies, but more visibility and probably a better risk adjusted trade on Asian currencies. Gold weakness should remain strategically supported by our expectation of a weakening US dollar. Acceleration above US$1,950 seems unlikely in this constructive environment, but any movement towards the 200-day moving average US$1,800 could be exploited. Lastly, we expect a moderate rebound of commodities in general. Tan Siew Meng, HSBC Private Banking Asia

There is the short-term tactical theme “Vaccine, Recovery & Reflation” which plays the cyclical recovery of the global economy. Then, we have three mediumterm portfolio balanced themes, offering diversified solutions for this record low yield environment, such as low volatility absolute return, investing in “fallen angel” credit and Asia/EM local/USD bonds, as well as the importance of a new balanced diversification by adding alternative investments.

Looking ahead to 2021, our investment strategy positions for a synchronised and broadening economic recovery and rebuilding after the COVID-19 pandemic. We expect that the global vaccine rollout, continued ultra-loose monetary policy, new fiscal stimulus, abundant liquidity, and strong earnings recovery will enhance the return outlook for risk assets.

For the longer term, we include four structural megatrend themes all benefiting from China’s opening up of capital markets and economic reform, new consumption habits in a post lockdown world, improving quality of life, and smart technologies. Lastly, there are two long-term ESG themes about energy transition and investing in companies with strong governance and profitability.

Our top four trends for 2021 focus on the most important macro and market developments that will impact asset prices, which are: recharging Asia’s Growth; Recovering in a Low Yield World; Digital Transformation; and Investing for a Sustainable Future.

Joseph Poon, DBS Private Bank 2021 is going to be a year of recovery. Positive developments on the vaccine front have triggered a rotation to “value” plays in global equities; geared towards beneficiaries, including travel related industries, banks, and energy corporations. Importantly, the recent switch to “value” signals a broadening of the market rally, underlining its sustainability. We continue to advocate staying invested with a Barbell Strategy, holding overweight exposures in growth equities on one end, and income assets on the other. On the growth side of the portfolio, we advocate investing into I.D.E.A. companies – the Innovators, Disruptors, Enablers, and Adapters. These companies will thrive in a world that is fast transforming into a digital economy. Additionally, we recommend exposure to “Vaccine Winners”, referring to companies that had been hit hard by the pandemic, but are now poised for rebound as vaccination for COVID-19 may soon become a reality. On the income side of the barbell, we suggest clients stay with BB/BBB-rated bonds and dividend-yielding stocks, including Singapore REITs. Omar Shokur, Indosuez Wealth Management For equities, we have adopted an overweight view around the US elections and reinforced that view with the perspective of a vaccine being distributed in 1H21.

August Hatecke, UBS Global Wealth Management We are bullish about 2021 and are overweight equities. We believe the vaccine rollout and supportive central banks will drive equity markets higher. Catch-up or laggard plays represent near term opportunities as economies slowly return to normal. These include US mid-caps, European small-mid caps, select financials, energy, industrials and consumer discretionary. Asia ex-Japan is a key catchup trade with earnings growth forecast to rebound to 23% in 2021 and growth broadening out from North Asia to ASEAN. We are excited about what we call The Next Big Thing, which is about identifying major trends and participating early in their exponential growth. We believe that 5G, healthtech, greentech, fintech themes are must-haves for our clients’ portfolios. Diversifying away from current industry leaders into the next growth areas is important for our clients’ portfolios. Sustainable Investing is another must-have. We have been early advocates for SI investing and in 2020 we declared our SI mandate as our preferred solution for our clients. We believe that green innovation will bring great opportunities and ESG investing will help screen for better governed companies to invest in. We believe that the Hunt for Yield will continue with low interest rates here to stay for the foreseeable future. Investors can consider enhancing returns via equities, structured solutions and alternative credit in private markets.

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UBS My Way: My Way is an innovative, first-of-its-kind creation in the industry. My Way is more than a product, it offers a whole new client experience by bridging the advisory and discretionary worlds. It is digital and powered by an all new iPad app. It allows our clients, together with your help, to build their own fully personalised portfolios from more than 40 different building blocks and hand over the responsibility of every day investment decisions to some of our best portfolio managers. With My Way, clients can express their individual investment views, while still ensuring the UBS House View is reflected and their individual risk/return tolerances are retained. Not only our clients, our client advisors benefit too because we help them work more effectively. Our CAs will now need less time now to prepare documentation on any portfolio changes, the app does it for them. Wang Ya, Private Banking Centre of Bank of China In the context of the global economy entering the post-pandemic era in 2021, our analysis is based on a review of valuation, economic growth, and macroeconomic policies. We suggest that investors focus on commodities, equity, gold, and bonds in 2021. In terms of global stock market, more attention should be paid to the convergence and regression to fundamentals. The demand for crude oil is likely to pick up due to the global recovery environment. Neo Teng Hwee, UOB Private Banking 2020 has been exceptional in more ways than one. From the COVID-19 pandemic to a global recession and extended market uncertainty, the year has been unlike any other in recent memory. As we embark on a new year, UOB Private Bank expects a definitive, albeit uneven, recovery. The pickup will be anchored by the COVID-19 vaccine developments and better control of the healthcare crisis, an improved geopolitical environment in view of a new US administration, as well as stronger investment sentiments. In fact, the latest IMF forecast for global GDP growth in 2021 is 5.2% — a strong upward revision from an earlier forecast of a 4.4% decline in 2020. That said, the sharp acceleration in COVID-19 cases in recent months and tighter movement restrictions in several major economies will continue to weigh on the global growth recovery. This is why we believe ongoing aggressive monetary policy accommodation and fiscal support are necessary to limit the deterioration of the global economy. We expect central banks in the developed economies to err on the side of reflation, with a proactive lag on improvement in growth conditions, as explained by the US Fed’s adoption of the “average inflation target”. Any premature material rise in bond yields will likely prompt aggressive counteractions by the Fed and other central banks, in the form of bond purchases, to ensure sustained economic expansion. The uplift in sentiments, coupled with continued fiscal support, will point to a certain, albeit slow recovery of the global economy in 2021. In view of these expectations, UOB Private Bank has upgraded our call on the broad asset class of global equities from neutral to overweight since November 2020. In particular,

we have moved US equities from underweight to a neutral position, as we expect the relative performance of US stocks to shift towards sectors which have been most negatively impacted by the pandemic. Growth stocks in sectors such as technology, which are defensive against the economic fallout, are trading at relatively high valuations and could underperform their value counterparts in sectors such as financials, industrials, materials and renewable energy. Nonetheless, interest in technology will continue and the sector remains an attractive long-term investment opportunity given its cyclical nature. Technology hardware will likely see better performance when they price in the anticipated strong gains arising from a global economic recovery. As digitalisation will continue to change the way we live, work and play, we recommend that investors seek opportunities in technology companies with robust fundamentals while trading at sustainable valuations. While we have upgraded US equities from underweight to neutral, we continue to maintain our overweight calls on emerging Asia and Japan equities. Investors should also consider shifting some assets from North Asia to Southeast Asia equities which have been the laggards due to the impact of the pandemic. UOB Private Bank views China’s economic recovery and medium- to longterm growth story as a convincing thematic investment trend. In particular, we see opportunities in China’s technology sector. In its recent formulation of the 14th Five -Year Plan for National Economic and Social Development and the Long-Range Objectives Through 2035, China highlighted that innovation will be instrumental in building a modernised economy. The rapid adoption of 5G technology will present numerous investment ideas and opportunities as China reshapes the global technology landscape. Amid the continued uncertainties, we continue to advise our clients to remain invested for the long term and to maintain portfolio diversification to manage market and concentration risks.

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What important steps did your bank take to drive the sustainable investing agenda and to increase access to sustainable investing opportunities in 2020? Tee Fong Seng, Pictet Wealth Management Asia At Pictet, we have adopted the term Responsible Investing, as it represents the breadth of the investment opportunity, while at the same time capturing its primary objective: to invest responsibly, regardless of what one’s personal definition of that may be. Responsible Investing presents a broad spectrum of investment options, from Environmental, Social and Governance (ESG) integration (where ESG factors are included in traditional financial analysis) to impact investing (where meeting a goal with social benefits is prioritised ahead of financial returns). Responsible Investing inherently includes the preservation and improvement of the world that our future generations will inherit. A rich life is one with not only financial means, but also family, health, security and stability, and we must ensure that future generations can enjoy life’s richness tomorrow as we do today. We are seeing a trend amongst UHNWI to embed responsibility or ESG more holistically throughout the management of their wealth. We have responded to this need by launching a dedicated offering, which combines different approaches available on the market today spanning ESG integration & active ownership, sustainability themes and impact investing. Benjamin Cavalli, Credit Suisse Private Banking Asia Pacific

drivers for the next year. Our affiliated asset manager, EFG Asset Management is already integrating ESG criteria into its stock selection and our global mutual fund research unit categorises funds according to their ESG credentials — which is essential when advising clients who are sensitive to these factors. We will be more visible in this space, adapting our offer to regional investment tastes and sensibilities. Cedric Lizin, Standard Chartered Bank Sustainable investing has been a key agenda for Standard Chartered Private Bank for several years now. This aligns with the broader bank’s sustainability aspirations. In 2020, we anticipated the need for additional due diligence to mitigate ESG washing given the proliferation of ESG solutions in the market. We therefore launched ESG Select, which is our framework to help us more systematically and rigorously review ESG products. We expanded our product shelf, including additional climate-themed and SDGthemed investment opportunities and making them available to both private and retail banking investors. Investors can access a range of sustainable investing strategies on our platform, from best-in-class ESG investing to key sustainable thematic.

We believe that the next drivers of solutions growth at Credit Suisse will sit with our newly formed Sustainability, Research, & Investment Solutions (SRI) global corporate function, which will allow for a more systematic rollout of — and a larger focus on — impact investment opportunities.

An innovative but simple solution we launched for private banking clients was Sustainable Deposits, which was first launched to our corporate and institutional clients. Sustainable Deposits are term deposits which allow clients to have their capital referenced against sustainable assets of Standard Chartered (e.g. green financing, sustainable infrastructure projects, microfinance, etc.).

Within SRI, our Sustainability Strategy, Advisory and Finance (SSAF) unit combines all of Credit Suisse's investment activities in sustainable investing around the globe within one organisation, while defining the firm's sustainability strategy relating to these efforts. They will facilitate investable projects and initiatives that have a positive economic and social impact, focusing primarily on generating solid financial returns for clients.

Most recently, the bank launched the first Singapore dollars sustainable time deposit to private and retail clients in Singapore.

We aim to include environmental and social considerations in the development of our product and service offerings in order to meet the interests and needs of our clients and to capitalise on business opportunities. Dedicated specialist units in various parts of our business are developing products and services that generate environmental and/or social benefits. These include investment opportunities relating to renewable energy, climate change and financial inclusion, among others. In Asia Pacific, our key focus will be on solutions that support Asian SMEs in becoming market leaders in agriculture, healthcare, affordable housing and education. We will continue investing in companies that work towards making a positive impact on the environment, and in particular, the ocean. Simon Godfrey, EFG Bank Sustainable investing has been on our agenda well before this year, though the explosion in investor consciousness has been more recent, notably in this region and we are well positioned to meet this demand. Changes in the international political landscape are also important

Colleague training remains key to enabling quality conversations with clients. We mainstreamed our sustainable investing training programmes and most colleagues are now trained in the basic concepts of ESG. Rishabh Saksena, Bank Julius Baer Sustainable investing has been centre stage of our Responsible Investments focus. ESG factors have been incorporated in our product selection processes, and we made available to our clients both in-house mandate solutions as well as third party offerings. As an example, one of the recent solutions offered in this space targets three UN Sustainable Development Goals: sustainable food production, climate transition and life below water (the “Blue Economy”). Steven Lo, Citi Private Bank Asia Pacific We continue to develop new capabilities on our platform, ranging from innovative capital markets trading solutions, third party manager capabilities, and within our own in-house discretionary portfolio management business. Investor education has been at the heart of many of our clients initiatives within the last two years, and will continue to be a key activity for us.

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Terence Chow, RBC Wealth Management Asia Technology has dominated the last ten years and we have seen a true transformation that has been accelerated by COVID-19. The arrival of 5G is supercharging the sector and it will set off a whole series of disruptions. The marriage of sustainability and technology, which we call SUSTECH, is where we see the most attractive opportunities, including in smart cities, electric vehicles, wind and solar power, waste management and water technology. Michael Blake, UBP In 2020, we have continued to broaden our sustainability agenda, both by strengthening our impact investing proposition and by launching several internal CSR initiatives. In Asia, we have launched a new emerging equity impact strategy to complement the existing global impact equity strategy and have a full agenda of initiatives for 2021 to ensure that we continue to build on this momentum. Zhao Yue, Private Banking Department of China Merchants Bank In compliance with regulatory requirements and market trends, we have vigorously promoted the NAV transformation of products and laid out a multi-layered product system, so as to ensure the diversity of products. At the same time, we have upheld the philosophy of asset allocation and we are working hard to continuously improve asset allocation methods and provide multiple service models, such as tripartite decision-making and carte blanche, to achieve maintenance and appreciation of client assets. Nitin Jain, Edelweiss Wealth Management Over the last few years, we are starting to see more ESG awareness amongst our clients. We feel that this shift is structural, we have been very committed to this, and hence would like to be at the forefront of this agenda. We launched an infrastructure fund which is completely ESG compliant and invests in roads, transmission, and the renewable energy space. This was the first of its kind in India and was very well accepted by our clients. We have provided our clients with access to ESG funds from our other partners who excel in ESG. In addition, Edelweiss runs a foundation which continues to support philanthropic activities across India. We have been advising and partnering with our clients to participate in this philanthropic agenda. Lok Yim, Deutsche Bank

We use four types of investing in which we integrate ESG factors into investment decisions and work continuously to develop and enhance our ESG capabilities. It includes 1) exclusionary screening — avoiding investing in companies or sectors that do not align with investor values or meet other norms or standards; 2) positive screening — actively seeking out companies deemed well-performing on certain ESG measures; 3) thematic — focusing on investments according to interest in specific ESG themes, such as clean energy, water, education or healthcare; 4) impact investing — investing in companies or funds with the intention of generating positive, measurable social and/or environmental impact, alongside a financial return. In July, Deutsche Bank announced that it would conduct its sustainable finance and sustainable financial product activities in accordance with its Sustainable Finance Framework, which is aligned on a best effort basis to the EU Taxonomy. The Framework creates the basis for the bank to achieve its ambitious sustainability targets in accordance with credible criteria. We plan to increase its volume of sustainable financing and portfolio of ESG investments under management to over €200 billion in total by the end of 2025. Shang Xiao, CreditEase Wealth Management CreditEase Wealth Management advocates the notion that every high-net-worth client should invest 1% of his or her assets in charity, either through direct donations, low interest loans or sustainable investments, so that the wealth may contribute to the greater good. CreditEase Wealth Management offers tailor-made charitable projects to clients, based on their preferences, and helps clients realise their charitable aspirations with its professional resource coordination and project execution and management. In 2020, CreditEase established the CreditEase Foundation, which has created an assortment of charity projects and established a variety of special charity funds. CreditEase Wealth Management has established impact investment funds, helping farmers to boost sales via live commerce. CreditEase Wealth Management Private Equity Fund of Funds incorporates ESG into the evaluation system, covering key areas with great social impact, such as medical care and health, new infrastructure, low-carbon environmental protection, education and new consumption. CreditEase Impact Funds, in the planning, will invest in social enterprises so that investors can obtain long-term and stable returns, and at the same time, support underprivileged groups. Arnaud Tellier, BNP Paribas Wealth Management We have accelerated the ESG integration into our products and services in 2020. We improved our proprietary ESG rating methodology by focusing more on metrics that drive investment performance and expanding the coverage universe from 3,000 issuers to 12,000 issuers.

We screen publicly traded securities by a combination of financial criteria and ESG factors, based on independent research and ratings, to make investments in line with our clients’ priorities and risk-return profile. Investments can be screened based on the strength of different factors relative to their industry peers. This enables us to work with our clients to identify opportunities that can have a positive impact on ESG issues while supporting the overall investment strategy.

We have incorporated ESG in all Discretionary Portfolio Management mandates and introduced new ESG funds, on themes such as energy transition or sustainable food. These have outperformed non-ESG funds, therefore we are seeing increased client interest to shift their wealth into sustainable investing.

In ESG investing, we hope to add purpose to performance. Making a positive impact does not have to mean compromising on performance. We hope to help our customers to build a portfolio that ensures their wealth is invested in line with both their financial objectives and particular ESG goals.

We continue to provide structured sustainability training and educate our clientfacing staff (RMs & ICs). Building a sustainability culture in our organisation is paramount and we intend to make sustainable investing a Business as Usual.

Overall, ESG integration in our AUM has increased to 70%, in line with our target of 90%+ and our funds ESG penetration rate has increased by +20%.

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Joseph Poon, DBS Private Bank We continue to focus on client education and empowerment. Clients are regularly engaged through events such as our quarterly Windows of Philanthropy sessions, which cover topics such as venture philanthropy and ESG. We are ramping up ESG in our ongoing conversations with clients to boost their understanding of how they can play a positive part via their investments. We work closely with DBS Foundation, which is dedicated to championing social entrepreneurship in Asia, to identify opportunities for clients to give back to society and support social enterprises in scaling their impact. We have integrated MSCI ESG Ratings into our wealth product suite. This provides clients with an “ESG” view of their investments, and empowers them to make more informed decisions. We have relaunched our ESG Outperformance structured product following the success from the first tranche, which was launched in 2018 and boasts a ROI of over 70% YTD. Staff training has been a key enabler for us as well. We stepped up the training of our RMs, and provide them with enhanced resources and tools to support clients in their sustainable investment journeys. We launched a series of ESG masterclass webinars for all front office staff in 2020, complemented with virtual classroomstyle trainings to entrench their knowledge on how sustainable investments play a part in our clients’ wealth building journeys. Omar Shokur, Indosuez Wealth Management This is at the forefront of our investment philosophy and has been the case well before this became a global trend. We believe it is for that exact reason we were the proud recipients of Asian Private Banker's ‘Best Private Bank - Sustainable Investments' award in 2019! 2020 saw the creation of a new division for our UHNW clients and family offices, cooperation between Indosuez Wealth Management and our Crédit Agricole Corporate and Investment Bank (CACIB). This division will focus heavily on socially responsible investment solutions, green finance and philanthropy. Moreover, we have set ourselves the goal of working towards a 100% ESG product range in our managed mandates by 2022. We are launching a specific 'People & Planet' mandate and we have significantly expanded our clients' access to green structured products. Moreover, we are actively working on the integration of ESG criteria in our credit processes. Lastly, we have significantly expanded our fund offering in this area, covering the themes of ecological & energy transition, sustainable development, preservation of natural resources, etc. Tan Siew Meng, HSBC Private Banking Asia HSBC’s latest climate ambition is to become a net zero bank, supporting customers to thrive through transition, and unlocking next-generation climate solutions. ESG is well integrated into the portfolio management process of our discretionary solutions. We are increasing our investments to upgrade our ESG market database, client reporting platform and frontline education to enhance our sustainable investment capability. Under the 2021 Top Trend of Investing for a Sustainable Future, we recommend robust ESG solutions to capture opportunities from climate change mitigation and adaptation, and China’s green revolution.

August Hatecke, UBS Global Wealth Management We have seen strong continuous inflows in sustainable investing strategies globally amid COVID-19. We believe the trend will continue as investors think about how to position their portfolios after COVID-19 and ahead of green-focused recovery spending and regulatory initiatives. In September 2020, we announced that we have made sustainable investments the preferred solution for our wealth management clients globally. We manage half a trillion (US$488 billion) in core sustainable assets across the Group. In WM APAC, the number of clients investing in our fully diversified sustainable portfolio and fund increased by 50% in 2020. The 100% sustainable cross-asset portfolio continues to be our star offering as UBS is the first wealth manager to offer such kind of portfolio for private clients. It has grown from zero interest to having a share of close to 20% of all mandates in APAC, with APAC AuM sitting above US$1.6 billion today. UBS Advice Premium: It is the first personaled SI advisory offering in the industry that provides personal sustainability scores and advice based on what is important to each and every client. It covers >11,000 issuers, covering stocks, bonds and funds and it provides full transparency with sustainability reporting. Research and insights: This year’s Future of… program will publish regular white papers on challenges that resonate strongly with clients and provide associated investment solutions across public and private markets. The first offering in the series, Future of Waste was launched on Feb 2020. The white paper and investment offering present opportunities to mitigate costs and issues associated with waste and target a compelling financial return. UBS oncology Impact Fund. We raised US$470m for our UBS Oncology Impact Fund, an early stage private equity fund focusing on investments in the development of cancer therapeutics in order to achieve attractive financial returns, while making a positive global impact helping to extend and improve the lives cancer patients, focusing on curing certain forms of cancer. US$275m was committed by our investors here in APAC. In February 2020, a record US$4 million donation split between the UBS Optimus Foundation and the American Association for Cancer Research was announced in support of innovative research that will accelerate breakthroughs against cancer and to support emerging market access to cancer care. This follows on the back of an earlier donation in April 2018, when the American Association for Cancer Research (AACR) and the UBS Optimus Foundations received US$1.2 million each. KKR Global Impact Fund launched In September 2019 raised US$225 million from the private clients for the KKR Global Impact Fund as part of a five-year plan to mobilise private wealth for public good. Today, it has so far raised over US$1 billion – very few impact funds have surpassed the US$1 billion mark. Wang Ya, Private Banking Centre of Bank of China In order to provide a better asset allocation service, Bank of China has built a comprehensive and systematic investment strategy system, in which the annual asset allocation report sets the tone for SAA investment for the subsequent year, while the quarterly/weekly/daily reports focus on mid-term tactical asset allocation, and short-term trading suggestions.

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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?

Tee Fong Seng, Pictet Wealth Management Asia Both Singapore and Hong Kong have developed attractive offerings for the set-up of family offices in the Greater Bay Area and Southeast Asia areas. Singapore can rely on its stable political environment and efficiency in the asset management industry, while an active stock market, rule of law and free flow of capital and information have made Hong Kong a natural choice for mainland wealthy families to set up offices there. Both financial hubs have carried measures to attract family offices to come to the region, from attractive tax exemptions on specific types of income in Singapore, to new ways for investment funds to be set up in the form of Variable Capital companies in Singapore and limited partnership structure in Hong Kong. We believe that streamlining regulations on family offices will be key for both Hong Kong and Singapore to continue attracting UHNWI. Less bureaucracy will also be a strong argument for both financial hubs. Lam Leong Yip, Bank Julius Baer T h e re l e v ant aut h or it i e s h ave prov ide d a robust plat for m in both Singapore and Hong Kong to promote the establishment of family offices. The growth of the capital markets and the newly created wealth for many families in the region, do necessitate facilitating the development of family offices. The robust legal and regulatory framework and stable financial infrastructure, will enable the industry to build trust and confidence to the wealthy families and family office advisers in the region. The key is to protect the long term interests of clients, and having a sustainable family office industry. The governments should continue to build the confidence in the industry by promoting the highest qualified and talented participants in the industry, while issuing guidelines for the long term needs of family offices by having appropriate guidance regarding disclosures on potential conflicts, transparent fees structures and ethical conduct, with the primary focus on clients’ interests.

Steven Lo, Citi Private Bank Asia Pacific We have to recognise that not every family office is the same. In the past, the focus was on a good product platform with an open architecture. Now we have to recognise that family offices are increasingly sophisticated and their needs extend beyond the investments product capabilities. We have seen that the interest from family offices is not just in personal investments but in corporate activities as well. They are often quite sizeable and global in their outlook and requirements. We understand this trend and our extensive platform across the Citi franchise and our globality has allowed us to accommodate and work with these institutional-size family offices. This trend is something the regulators should recognise — and also acknowledge that not all institutions will be equipped to handle the wider needs of this segment. Michael Blake, UBP The attributes that make Singapore a n d Ho n g Ko n g a t t r a c t i v e a s international financial centres also make them attractive as family office jurisdictions. The priority now is to build on this strong foundation by developing the legal, tax and wealth structuring sectors, encouraging centres of expertise on family governance and family offices and supporting the emergence of family office networks across the region. Anupam Guha, ICICI Securities Limited 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.

Lok Yim, Deutsche Bank We b elie ve it is imp or t ant for both Hong Kong and Singapore to maintain their competitiveness. We support education to nurture more talented people to join the industry. Shang Xiao, CreditEase Wealth Management We noticed that a lot of family offices have global asset allocation needs. Instead of focusing on a single local market, they seek services to help allocate family assets around the globe and across asset classes. We believe it is critical to have a cooperative and healthy relationship between regulators from different jurisdictions in order to nurture the development of a family office-supportive ecosystem. Therefore, we think one thing that regulators can do is to improve dialogue between each other across jurisdictions to harmonise rules and regulations around cross-border investment. We believe support for investment advisor y licensing and registration is key to nurturing a family office-friendly ecosystem. We have seen that in the US there are many registered investment advisors (“RIAs”), and in Hong Kong investment advisory services are licensed and regulated by the SFC under type 4 regulated activities. We hope a similar licence category can be granted in mainland China to allow more qualified professional investment advisors to support family offices. Arnaud Tellier, BNP Paribas Wealth Management Asian financial hubs are eager to promote themselves as a place of business, but would be well-advised to delineate more clearly their unique selling propositions in terms of their location for both Asian families and non-Asian families seeking to build an Asian presence. For both categories, a leaner, more actionable framework to sophisticated private investment offices would be desirable. This could take the form of a dedicated regulation enabling families to be

THE FINAL WORD R E G U L AT I O N treated like institutional investors and be allowed access to relevant content. Regional and global family offices would gain from a moderated platform to network and share best practices and deal flows, notably for Asian ESG and SRI [socially responsible investing] related investments, including articulating best practices and opportunities for philanthropy — which is a common ‘ask’ by most family offices. Most of the Asian entrepreneurial wealth remains firmly held in the hands of family patriarchs and the transfer of both wealth and business is still very much unfolding. In this context, regional financial hubs would benefit from educating UHNW families about the advantages of timely planning and structuring the transition to the next generation of wealth holders (family governance, wealth planning). Particularly, a strong focus on NextGen education and enablement would be desirable (e.g. a family office chair at a leading university). Omar Shokur, Indosuez Wealth Management In Hong Kong, the Hong Kong Monetary Authority (HKMA) has actively been promoting the city as a family office hub and is working with the industry through a three-pronged approach: talent development,

platform building and outreach. With regards to outreach, the regulator is working with the Private Wealth Management Association (PWMA) and other industry stakeholders and government agencies to increase efforts showcasing Hong Kong's attractiveness as a family office hub.

underestimated. These measures do drive towards a professionalisation of the family office landscape — for instance, by formalising the investment structures, promoting the hiring of professionals, and overall moving towards a clearer definition of what a family office is.

Meanwhile, the Monetary Authority of Singapore (MAS), together with the Singapore Economic D e velopment B o ard (EDB), have for me d a family office development team. As such, the development of a professional and family office friendly environment has the attention of the highest authorities in both cities with a strong focus on long-term development of their countries' development and competitiveness as a family office hub. In other words, there's not much more in this area we can ask for from the regulators as they are making all the right moves. (This is in line with the continued development of Singapore and Hong Kong as leading offshore wealth centres, as alluded to earlier.)

Where they differ is that each jurisdiction offers unique advantages for families and family offices that cannot be replicated. Therefore it bears careful consideration as to which — if not both — jurisdiction could serve a family’s best interests and fit its longer term strategy.

Tan Siew Meng, HSBC Private Banking Asia In Hong Kong an d Si ng ap ore, the regulators are putting in place and refining a slew of measures to attract f am i ly of f i c e s , an d t h e e c on om i c v a lu e of family offices to both jurisdictions cannot be

In the turmoil of 2020, the family office became much more than an investment management operation. Increasingly, we saw families seeking to further formalise their ownership structures, putt i n g i n p l a c e f a m i l y g ov e r n a n c e r u l e s , diversifying locations, diversifying from core businesses, seeking new growth opportunities, both for their businesses and their wealth. In this light, the role of the family office has taken on a new maturity, and regulators would do well to continue to listen to the families, seek feedback from industry practitioners, so as to expand their focus over and above the legal, taxation, human resource and education fronts currently.

Private Banking Department of China Merchants Bank – special comments on Family Office & Trusts Q: What are your observations and advice regarding the rise of Family Offices in China? We see this positive development as an awakening of the demands of China's extremely high-net-worth population. Different institutions have their own understanding of the family office business and therefore apply different business models. In our view, the family office space is a dynamic sector that not only offers clients abundant choice, but also represents a process of client education. For institutions, it also brings an opportunity to restart and reshuffle. Looking back at the development of the Chinese private banking market, we expect that the family office business will soon enter an era where the strong will remain strong forever.

Q: How should clients choose the right family office institution in the face of so many choices? Choosing the right institution is an act — and art — of balance. It is about balance between function and cost, and between supply and demand. Clients can come to a decision from the following two perspectives: First, they choose an institution that can provide family governance services. The decay of a family business will not be turned around if the institution only cares about allocation and material wealth management. Second, they should also choose an institution with a powerful platform and deep resources. That said, no one institution will be able to provide all the services that a client needs, which means that it is necessary to work with a number of institutions.

Q. What should the social mission and responsibility of family offices in China be? Family businesses have become an important part of the Chinese economy. If the elites among them withdraw from the stage due to a failure in inheritance, it would be a major loss for entrepreneurial families, corporate employees, and Chinese economy as a whole. Therefore, private banks should help Chinese entrepreneurs plan for inheritance and not just offer purely financial management services. Family offices also carry a responsibility to give back to society and promote social development.

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Where do you see the best application of data analytics/machine learning in private banking? Tee Fong Seng, Pictet Wealth Management Asia AI and machine learning are the technologies leading to an accelerating digital advance, which will dislocate the financial industry and our relationship with clients. As data becomes ever more valuable, data science that uses these technologies will transform the way investment information is gathered, analysed, employed and presented. However, technology is dual-use: for financial institutions, cyber is the new systemic risk. Resistance to cyber-attacks that seek to undermine the most basic banking services will become a cardinal test of resilience, as will the security afforded by a robust balance sheet. Client concerns about data privacy will only intensify. In the future, financial institutions, already trusted as data collectors, may find a new role as data custodians. Technology will ultimately make bankers and financial experts more effective, precise and targeted in the way they work. But it is key to keep the highly personal nature of wealth and asset management in mind. It takes extensive discussion and interaction person-to-person to develop the relationship and nuanced understanding necessary to tailor solutions to each client’s specific needs. Technology won’t be able to replace that. François Monnet, Credit Suisse Private Banking Asia Pacific We knew from very early on that technology is critical to our relevance in the future. As such, Credit Suisse was one of the early movers in embracing digital innovation and we remain committed to being at the forefront of digitalisation in the private banking sector. With the support of technology and data analytics, we augment what our relationship managers can offer to our clients to deliver personalised and timely content suited to the investment appetite of each client. Consumers in Asia tend to react very positively to digital innovations. Our clients here are also younger, more tech-savvy, and more demanding of digital innovations in banking services. We are simplifying access to the knowledge and resources of the bank, so our clients can communicate efficiently with their relationship managers, identify, and act on the information that is most important to them. This reinforces our strategy of having a technologysupported relationship manager that is able to provide tailored and relevant advice to our clients. Credit Suisse’s digital strategy will continue to focus

on providing tailored advice and self-servicing, seamless onboarding of clients and greater usage of analytics.

programme with the goal to establish data & analytics as a core capability of Bank Julius Baer, enabled by a global data platform and a data science workbench.

Technology at Credit Suisse is of paramount importance; we have a firm belief that technology will shape the future by defining the way clients consume financial services. Therefore, we will continue to harness technology to deliver a higher level of client service.

This will enable data-driven insights for decision making on client service, product offering, content sharing and operational processing — thereby providing a more personalised client experience, while creating efficiencies and reducing risks.

Cedric Lizin, Standard Chartered Bank Investment advisory is one area where data analytics and machine learning can greatly improve the quality of our advice and client service. For instance, data analytics and machine learning can provide personalised content, in the form of investment ideas or product ideas, based on clients’ risk profile, portfolio holdings, recent transactions, client investment personas and preferences, and on what other clients with similarities are interested in. AI can also be used to identify the “next best action” for clients. Anirudha Taparia, IIFL Wealth Management Ltd One of the big gest b enef its of dat a analyt ics is the abi lity to better understand client requirements and create customised solutions. In the private banking space, data analytics can be used in multiple ways. Some examples would be to identify different client personas and use (segmentation), actionable alerts on portfolios to clients and RMs (advice), product structuring-innovation, improved reporting & analytics for clients, risk control and firm governance measures. In addition to client requirements, this will lead to better risk assessment. Further, artificial intelligence and machine learning (AI/ML) tools can be leveraged by wealth management companies to improve client engagements. For example, chat bots can be used to actively engage with clients and resolve basic clients queries in an efficient and seamless manner. Andreas Zingg, Bank Julius Baer We view data analytics and machine learning as one of the primary drivers of digital transformation in private banking. Therefore, we have launched a global

The initial focus areas for our Bank are on creating more personalised insights & recommendations for clients, on mitigating risks during client onboarding and lifecycle management, and on analysing clients’ digital user journey and trading behaviour. Sonjoy Phukan, Bank of Singapore Data analytics and machine learning are already widely used for private banking processes such as client risk analyses, chatbots and client onboarding, which have helped to reap savings in both time and costs. As private banks cater to the bespoke needs of high net worth individuals and families, it is important to look beyond the immediate transactions and focus on a customer’s surrounding journey, needs and aspirations. While data analytics can be optimised for investments, it can also be applied to improve client experiences through personalisation. Using data and insights to design products and services which specifically meet a client’s individual requirements based on their lifestyles and preferences can be a game-changer. Steven Lo, Citi Private Bank Asia Pacific For us we believe the value will come from being more data-driven, especially in how we look at our client base. The data will help us understand how we can improve the client experience journey by spotting trends and/ or situations more quickly and being able to react proactively and/or appropriately. In fact, we are undertaking a massive global project in a relationship management application. That is how important we feel data analytics will be to our business. Terence Chow, RBC Wealth Management Asia We s e e t h e m o s t p r o m i s i n g applications of data analytics/machine learning in the following areas of private banking: Understanding client behaviours in order to improve client servicing, customised investment product

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offerings and investment product marketing Making the most of the wealth of social media data available to deepen brand value Improving investment risk management by utilising machine learning to predict market movements (e.g. asset pricing, volatility) and offer actionable insights that can enhance house views Optimising portfolio management capabilities by using robo-advisory in asset allocation and portfolio monitoring / rebalancing, minimising the need for portfolio manager interventions. For example, in 2019, RBC Wealth Management incorporated sentiment analysis in portfolio management for our equity selection and ESG implementation. Following the inclusion of sentiment analysis from investors, portfolio allocators, brokers and economic influencers, we were able to position our tactical asset allocation through 2020 volatility. Nitin Jain, Edelweiss Wealth Management We think this is a critical capability which all banks will have to build as they try and differentiate themselves in the marketplace. There are two places where we use data analytics/machine learning in our business. 1) Investment management: our investment decisions are powered by a combinations of human intellect and judgement in addition to automated trading and algorithms led by AI/ML 2) Client analytics: for understanding the preferences of our customers based on their digital footprint and presenting them with the most appropriate and timely advice/solutions Anupam Guha, ICICI Securities Limited 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. Lok Yim, Deutsche Bank We are using Salesforce to create a one-stop data shop for RMs. This is the first step in the bank’s plan to use smarter data analytics to add value to services to our clients in Asia. Achieving this traditionally required RMs and Investment Managers (IMs) to juggle a number of legacy applications and pull datasets from a range of sources. We believe that efficient access to data is not enough. Therefore, we also have downstream systems hosting financial data, but not all data can be easily translated into sales enablement functions for RMs. So, it is important for the right data to be fed into the system and there is a need to

understand what key data are most relevant to the RMs’ daily lives.

and relevant content and product offerings to our clients.

We are interviewing front-office employees and important stakeholders across APAC to build a data roadmap to enhance our data analytics. We think that value comes when we start integrating data and driving coherence across groups. We must provide more than static data. It is about the relationship between data elements. We need to understand what is doing well versus what’s not. Data can tell us that a certain stock has gone through the roof, for example, but the much more important question is ‘what should we do next?’. That is something our clients need to know.

The possibilities are endless, only our minds can draw the boundaries of what we can achieve.

Shang Xiao, CreditEase Wealth Management CreditEase has been working in the fintech industry for a long time and continues to utilise technology to promote financial innovation and wealth management. It has innovatively transferred its experience on big data application in the domain of risk management to the domain of wealth management. CreditEase independently developed the Big Data Client Scorecard, which utilises big data to identify target clients and to categorise client profiles. The results have been applied in precision marketing, empowering CreditEase to better meet client needs, improve business efficiency and to provide asset allocation recommendations and consulting services tailored to specific wealth management stages of different clients Benefiting from the digitalisation in the early stage, by labelling the interests and preferences of clients based on their browsing history and behaviour analysis, CreditEase can recommend the most relevant services and activities to each individual client. Even more, CreditEase can assign the most fitting client manager to each client based on the analysis of objective characteristics and behaviour patterns of clients and client managers, which improves the order placement rate as well as the client satisfaction rate. Arnaud Tellier, BNP Paribas Wealth Management The beauty of digitalisation is the ability to take both structured and unstructured data sets, and leverage technology to convert them into a form that can be easily analysed. Transaction data is an example of a data set that can be examined. But call reports and logs are unstructured and we can leverage artificial intelligence for speech-to-text conversion, and layer machine learning tools to analyse our clients’ investment behaviour and propensity towards certain investment decisions. All these elements serve to produce findings that can help us improve the client experience. With this data, we can do a multitude of things, from fraud monitoring and prevention for risk mitigation, to hyper-personalisation, where we present curated

Omar Shokur, Indosuez Wealth Management In terms of client onboarding it can be helpful in name screening and the general KYC process and on the advisory side it can help identifying investment proposals. Having said that, one of the main reasons for clients to make use of products and services offered to them by private banks is actually the human and relationship elements. We strongly believe that by combining these new applications and tools together with the human capabilities of our teams, we can build the best service and offer to our clients. In no other area of banking is the human-to-human relationship as important as it is in private banking, and this is exactly what sets up apart as an industry. We firmly believe that this will remain the single most important element that sets us apart from other areas of banking. Tan Siew Meng, HSBC Private Banking Asia More than ever before, our clients are looking to us to help them manage their wealth and navigate markets. Having a digital platform that supports this goal is critical to this mission. We are looking at developing a hybrid engagement model where technology will handle all of the administrative client touchpoints, opportunity assessments, portfolio risk alerts and other important information touchpoints for our clients. We see artificial intelligence as critical to our strategy, with a wide range of potential applications in flux across our private banking business. As we continue to digitise client journeys, we see benefits in the use of AI across these experiences — from the delivery of relevant and insight-driven content, to conversational interfaces, to portfolio and risk management. In all instances, using AI to track, detect and predict patterns across enormous amounts of complex data, in combination with our human experience and expertise – our human intelligence – is a key differentiator. Wang Ya, Private Banking Centre of Bank of China Big data analysis and machine learning have a great significance both internally (internal management) and externally (customer service) for us. On the one hand, big data analysis is helpful in terms of refining customer profiling and accurately understanding customer investment behaviours. On the other hand, big data analysis is widely used in the field of investment and trading. It can help formulate trading strategies, generate investment recommendations and optimise investment performance.

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How is your bank optimising the utility of the relevant digital tools to prepare frontline staff for client engagement in a post-pandemic environment? Tee Fong Seng, Pictet Wealth Management Asia The pandemic has already proven it: digital contact with clients is a reality. Even when the crisis passes, digital interaction (through video calls or digital banking tools) is here to stay. Private banks that cannot handle or upgrade those new communication channels will have a tough time in the future. Most important for Pictet is to have the capacity to deliver the banks’ knowledge and expertise to clients in an efficient, tailored and easy to understand manner through technology, as we believe digital tools will not replace the face-to-face interactions that are key in private banking, but rather complement it. François Monnet, Credit Suisse Private Banking Asia Pacific Credit Suisse did not wait for 2020 to tell us that technology is critical. We have been leading in this field and we believe that the strategy we have deployed to market has three key benefits. First, it is the empowerment of the client and of the relationship manager. Second, it is about connectivity – anytime, anywhere, the way clients want it. Third, it is about that notion of protecting — making Credit Suisse the ‘guardian angel’ of portfolio performance as well as of the risk parameters of the clients. We are augmenting the service ability of the relationship manager with the support of technology. In terms of connectivity, client and relationship manager engagement on our various digital tools and platforms is high and it continues to grow exponentially. Since February 2020, we have seen a significant increase in the use of our digital solutions by our clients and relationship managers. We have also seen an increase in client engagement on Credit Suisse Chat, which allows our clients to conveniently engage with our relationship managers via chat messaging, through which we recorded a threefold increase in the number of orders received in the first half of 2020, as compared to the second half of 2019. Amid the height of the pandemic, we continued to provide thought leadership and guidance to our clients via about 200 digital engagements across Asia Pacific, enjoying a very positive response as the cumulative attendance for this new type of market engagement exceeded 45,000 participants.

Cedric Lizin, Standard Chartered Bank We digitalised many of our processes in 2020, including the use of e-signatures and video conferencing. We launched a video-based role-playing training programme for our relationship managers to help them practise and perfect their virtual client engagement skills. We will continue to invest into digital in 2021 to modernise our platforms, enhance our digital offering and improve client experience and resiliency. For instance, today, clients get a 12-month historical portfolio performance view and net positions via the online banking platform or SC Private Banking app. In 2021, clients will have access to investment income and expenses reporting, asset allocation and portfolio risk analytics. We are working on automatically sending tailored investment and product ideas to clients based on their profile and preferences and on what others like them are doing. We are experimenting with AI-based applications in the fields of identifying new HNW prospects or predicting client attrition, for example. These however remain in early stages. In addition, as more engagement goes online, we are stepping up on cyber, fraud and operational risk management capabilities in order to continue providing a trusted and safe banking environment for our clients. Anirudha Taparia, IIFL Wealth Management Ltd Wealth management companies are now thinking like technology firms. In our case, what we had envisaged in the digital space for the coming few years is all happening within months. Post-COVID-19, IIFL Wealth has optimised tools for digital engagement with clients. With face to face interactions limited, our frontline teams have been using digital medium like MS Teams and Zoom effectively. With strong tech support and specific trainings, RMs have adapted to seamless digital engagements. Along with this, the firm has ensured adequate support in terms of materials/reports that can used effectively during virtual meetings (new client meetings and client portfolio reviews among others). Alongside this, to keep interactions ongoing, there is a calendar of

curated digital events organised across different themes to ensure that clients remain connected. We have subsequently enhanced the use of technology by creating workflows and dashboards for our front office teams, which helps improve their productivity and remain connected virtually. Andreas Zingg, Bank Julius Baer In light of COVID-19, Bank Julius Baer globally has accelerated its investments in digital capabilities, such as remote working infrastructure, video call capabilities, enhanced eBanking features, digital signature, going paperless where possible, chat applications for our clients, and more. Many of these capabilities have been launched in Asia, with others to follow in the coming months. Adoption of such enhanced digital capabilities by our front office and clients has been rather seamless, with certain capabilities achieving the same adoption levels within weeks which in the past would have taken months. COVID-19 has proven the last sceptic that digital tools are of strategic importance, also in private banking, as they are an integral part of providing personalised client service by our relationship managers, while at the same time creating efficiencies for the front and back office teams. Sonjoy Phukan, Bank of Singapore Since the start of 2020, we have seen an increase in digital engagement with our clients. Currently, more than 75% of our client accounts have signed up for our digital services up from about 50% at the end of January 2020. This uptick in adoption is likely to outlast the pandemic as we expect to see a more digitally demanding client base globally in the new normal. As they adapt to the new normal, our clients continue to look for seamless access to our products and services. Our digital services provide clients with the benefit of accessing what they need, anytime and anywhere, with minimal physical contact or the need to travel. They can securely communicate and share documents with their relationship managers, view our research reports and provide online instructions for remittances and payments. Our services are equipped with audio and chat functions which can be accessed via desktop, mobile and tablets and eliminate the need for physical signatures, paper-based processes and multiple call backs. Clients in Singapore, Malaysia and Greater China markets have embraced our digital services faster than other markets.

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We have converted physical client engagements to virtual ones and extended digital onboarding to prospective clients. The aim is to ensure that our products and services remain accessible with minimal physical contact. In terms of preparing our employees for evolving work demands, we have enhanced our online learning and development initiatives to include professional development, leadership and product training. Our employees have full access to our suite of personal and professional development online courses on platforms such as Coursera, LinkedIn Learning and Learn@IBF programmes, where they are able to attain certifications in areas such as Python programming, agile methodology and design thinking. Steven Lo, Citi Private Bank Asia Pacific Our plan has always been to invest heavily in technology as our client base transitions to a younger generation who prefer a high level of digital engagement. We view our approach to technology as a means of enhancing the client experience in this regard. We have the advantage of looking across our extensive franchise and being able to take advantage of what has been developed in other parts of the bank. In fact our Consumer Bank has been recognised by the industry for their winning apps and our close collaboration with them will allow us to tap on what could also work for our client base. Also, having had almost a year long experience in utilising digital tools, we now have the insight into the gaps — or what you might call "the less-thanperfect situations" — and what we need to improve upon with our future tech dollars. Terence Chow, RBC Wealth Management Asia RBC Wealth Management Asia’s digital strategy is centred around delivering an unrivalled client experience, optimising our core technology and delivering world class business development. Instead of viewing client touch points as discrete interactions with the bank, we believe that all frontto-back touch points combine to create an unrivalled client experience. We have been modernising our technology over the past few years. Unlike some of our competitors — with complex legacy platforms which get in the way of a sustainable digital transformation — we have a simplified

and nimble core system. This system sets the foundation for the next stage of our digital transformation, which is to embrace software-as-a-service to create an integrated financial services ecosystem.

through online video chats rather than going to a particular office offline. This also means that our experts can serve more HNW clients and are not limited to a specific geographical location.

Wealthtech and fintech are innovating at a rate that was previously unimaginable, and we want to capitalise on the innovation and speed-to-market they enable. For example, we are establishing social messaging channels to serve our clients and to market our offerings. We are developing strategic partnerships with select vendors who will support us to accelerate our front-to-back digitisation ambition.

Arnaud Tellier, BNP Paribas Wealth Management

Nitin Jain, Edelweiss Wealth Management The world has evolved to a situation where our RMs now have their entire “office in their laptop”. Everything they need, starting from portfolio advisory capability, to understanding details of a product, to interacting with the team members sitting across the country, to dealing with customers, to tracking performance of their portfolios, and getting new ideas, is now digitally enabled for our advisors. Ths is core to our business and the idea is to empower them in such a way that it allows them to add more value for the customer and be more productive, without having to spend as much time in the office. Shang Xiao, CreditEase Wealth Management CreditEase Wealth Management has developed the Financial Planner App for financial planners, which enables financial planners to share articles, opinions, and WeChat posts of strategy managers to target clients smartly and easily. Our intelligent robot client service offers automatic Q&As, resulting in a drastic improvement of the efficiency of feedback, and a reduction in the workload of supporting staff. The Mobile Dashboard to Managers on our Financial Planner App allows managers to easily track on one page key financial indicators, such as team activity, staff daily performance, pipeline of the month etc. All of the above can make management more efficient and standardised. Our online 1+N professional team service model means that one account manager serves as the contact point for the professional service team and various product/service experts. As our customers became more and more used to online service models, we have found some of them are more willing to interact

There are two huge opportunities for us to move forward on this. One being the increasing use of myWealth, our onestop digital banking platform for clients to have immediate access to their portfolios and trade online. Our frontline staff are able to co-browse with our clients, so that we can see exactly what they see – this helps us to advise our clients better, and put the power back into their hands. The second avenue is integrating into our clients’ existing ecosystems. In this post-pandemic environment, we see communication evolve so rapidly. Our RMs and clients have moved from a world where meeting face-to-face is the norm, seamlessly into online and social platforms where clients are already on. This has cemented the bank’s belief in earlier digital investments and accelerated our digital roadmap. BNP Paribas Wealth Management’s strong digital offering has put it at the forefront of the private banking community. Technology and advice has never been this easy and together with their private bankers, investors would be better positioned to maximise long-term returns. Omar Shokur, Indosuez Wealth Management We have a clear digital strategy in place supported by sufficient resources to improve digitalisation of our client onboarding processes and to continuously improve the selling process of the front line. The pandemic has underlined the importance of a high degree of digitalisation when staff are working remotely and when face-to-face contact with clients is not an option. In addition, we are strengthening our efforts to introduce transactional capabilities in our e-banking environment and we will enhance our mobile banking capabilities as part of the 'MyIndosuez' suite of products. Although most contact with clients takes place by phone, we are reviewing the addition of video capabilities as a means of communication. In a post-pandemic environment, we will be working more with external fintech technology providers in specialised functional areas through the completion of our API infrastructure around the core banking system.

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Finally, it is important to note that in 2020, we increased the number of virtual events with our clients. The purpose of these events was to share our views on the markets, as well as on other topics such as private equity markets, the post-COVID world, etc. These initiatives were very well received by our clients and we will therefore continue to propose this in the future. August Hatecke, UBS Global Wealth Management Ever since our digitalisation journey in APAC began, the way we work and interact with our clients has transformed. This season has put our platforms such as UBS e-banking, e-trading, UBS Advisor Messaging to the test. We are proud of how they have been arming our client advisors with stability and sustained growth during 2020. Some examples of our accelerations include: We bring the scale of our digital platforms into play to ensure our business continues as per usual under the “new normal”. Currently, about 90% of our employees across APAC can work from home with remote access. In light of the pandemic and the need for a more comprehensive remote access platform, we accelerated our plans and launched UBS Workspace, a new platform that enhances our productivity and mobility, months before its original launch date. So far, we have enabled majority of all staff across APAC region to UBS Workspace (including Wealth Management and Investment Bank), to enhance both employee and client experience while meeting all regulatory needs. UBS Workspace is the new end user platform which allows our staff to access their desktop from any devices, wherever they are. It allows flexible working and improves performance and stability. Our employees are equipped to meet all regulatory needs through provisioning of UBS Workspace capabilities as part of our Bring Your Own Device (BYOD) strategy. In the matter of a few weeks, UBS Group Technology worked round the clock to migrate an additional 10,000 employees onto UBS Workspace, an enhanced platform that changes the way we work together equipped with new tools for communication, productivity and mobility.

In addition to these technical capabilities, these tools address mobility needs and enable social distancing across our divisions. We rolled out digital signatures to evidence internal review and approvals, strengthening efficiency to over 20 processes. This digital signature is a first for UBS GWM globally. We launched Direct Investment Insights (DII), a new capability in our Digital Banking which offer one of the best client experiences with the latest insights, curated from our CIO House views and latest overnight developments, linked to actionable ideas. We have more upcoming digital accelerations planned and in the works that will enhance our employee experience as we work around the postpandemic environment. Wang Ya, Private Banking Centre of Bank of China In the post-pandemic era, we will fully embrace the employment of emerging channels and the use of digital tools to reduce operational risks, increase efficiency and optimise service experience. The first step would be improving of our CRM system with an optimised integration of trading systems, marketing systems, and “portfolio performance diagnosis functions”. At the same time, we are committed to establishing an online platform to disseminate efficiently our investment strategies to empower our RMs and ICs with timely solutions and digital tools so as to provide customers with professional and customised services.

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As expat packages shrink, private bankers are going back home

s immigration departments are getting tougher in approving work visas and many private banks are “doing away” with expat packages, private bankers are thinking of returning to their home regions. Restructuring at a number of banks and a pandemic-induced urge to rethink life priorities have led expat private bankers — both Westerners working in Asia and foreign-educated Asians working in Europe or the US — to consider moving back to their native countries. Andrew Zee, team lead, principal consultant, private banking and wealth management at Selby Jennings Singapore, told Asian Private Banker that his team has helped to redeploy to Singapore a number of Singaporean bankers who used to work at banks in Europe. “For both groups mentioned above, there was either a restructuring of their roles, or they decided that because of the pandemic, it made more sense to return home and be with their family or loved ones. In some instances, the candidates preferred to return home and have a career change,” explained Zee. “This has all happened in the past year. Our global offices too have been seeing and referring citizens returning to their home countries for a fresh opportunity.” A preference for home-grown staff An experienced private banking headhunter — who preferred not to be named — added that Singapore banks over the last few years have been

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cutting expat bankers’ benefits, to the point that most banks are now “doing away” with expat packages. Asian Private Banker has received feedback from various sources over the past few months that working visa applications in both Hong Kong and Singapore have been delayed, and the authorities have become stricter inapproving foreign hires. Due to the need to preserve local job opportunities in an economy weakened by the pandemic, the Ministry of Manpower (MoM) in Singapore recently lengthened the mandatory job posting on the Singapore government career website from 14 days to 28 days, before an employer can apply to fill the vacancy with an employee with either an Employment Pass (applicable to job roles offering a monthly salaries of S$4,500 or above) or an S Pass (monthly salaries of S$2,500 or above). Zee said there is a preference for Singaporeans or Singapore permanent residents to fill mid-level roles demanding a monthly salary of S$15k or below, and the MoM may ask the bank to reconsider, if the recruitment required an Employment Pass for a role paying a monthly salary below S$20k. “If the company, at a minimum, has a staff of more than ten, usually there shouldn’t be any issues to take on one EP, provided the company follows the MoM guidelines regarding the number of Employment Pass holders in the company,” Zee said. “There isn’t an exact limit right now, but what we have always looked at is a ratio of 7:3 or 8:2 for local to non-local employees.”

Longer visa application process Besides officially lengthening the time required to post a job advertisement, the visa application process has become longer on account of remote working situations and the reflux of applications as the pandemic situation stabilises in Singapore. “Due to the pandemic, the time needed to obtain an Employment Pass has been extended to probably a month or two — compared to around two weeks previously. But this is just a delay due to the lockdown; there aren’t a lot of pushbacks,” he said. “Firms have begun hiring replacements and filling new positions (…) and this has led to an increase in the volume [of visa applications] and explains why it is taking slightly longer to have the Employment Pass approved.” The trend of Western private bankers leaving Asia’s financial hubs has been observed in Hong Kong as well. An increasing focus on mainland China business has made the private banking industry less appealing to expats. A headhunter told Asian Private Banker that a decade ago, only 45-50% of employers had a slight preference for bankers able to speak Mandarin. Now, 80-90% of employers consider the ability to communicate in Mandarin a must. And in addition to the language requirement, what is most coveted by private bank employers in Hong Kong is a mainland Chinese clients network that the new hire can bring along.

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Demand for factor investing increases “materially” in Asian HNWIs The appetite for systematic factor investing has kept growing over the past few years, especially within the DPM business in Asia’s private banking industry. “We have seen interest in factor investing increase materially in Asia in recent years, as market providers have demonstrated the virtue of smart beta strategies for cost-conscious investors,” Jean Chia, head of portfolio management and research office, Bank of Singapore told Asian Private Banker. “The multi-year outperformance of the momentum factor versus the value factor — and the overall media coverage that has come with this trend — has had investors warming to the concept.” She highlighted that although Asian factor investing strategies are coming off lower bases, growth rates in the regions are typically outpacing other regions. That has been true in particular within the DPM portfolios of PB clients, because most factor investment tends to be quantitative in nature, technical and difficult to understand.

“As such, partnering with an informed investor (such as through DPM teams in PBs) has been a natural route for clients,” she said. “We expect the ongoing trend toward DPM will be a key growth driver of factor investing.”

Diversified and balanced portfolios Stephen Quance, global director, factor investing at asset manager Invesco, agreed that there will be a growing demand for factor investing within wealth management in the long run. Commenting on client appetite, he highlighted that it’s “much more” common for an institutional investor to develop in-house factor capability than for wholesale investors. “Most institutions utilise a multi-factor approach with strategic objectives. This is common with wholesalers as well, but single-factor strategies and tactical positioning are rather more common,” he added. William Ma, CIO for Noah Holdings, added that quantitative strategies are complementary to active fundamental ones for investors who construct a diversified and balanced portfolio, especially as in

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recent years, active hedge fund managers have been using a more concentrated approach. Currently, the top 10 holdings of a typical hedge fund accounts for 75% of its total AUM compared to less than 50% five years ago, he pointed out. By contrast, quantitative strategies’ allocation tends to be more diversified as a typical one has over 200 stocks in holdings. “From our analysis, domestic Chinese HNWI’s demand for low volatility stable return products has increased in past few years, in particular after the recent higher market volatility,” Ma said. “This demand driven trend has benefited the emergence of factor investing quantitative hedge funds in the domestic China A-share market, in particular the high frequency market neutral China A-share strategy.”

ESG as a factor gaining traction As ESG is a rising trend for the industry, factor adoption and ESG adoption often occur in parallel, Quance said. “We believe this makes sense since both utilise data and characteristics to build diversified portfolios,” he added. Adrian Zuercher, head global asset allocation, UBS Global Wealth Management CIO office, shares this sentiment, saying that ESG is a major topic, even lthough the bank does not specify ESG as a classical style factor. “Our key focus is on ESG and sustainable investing (SI), where we launched 100% SI-compliant mandate solutions for our WM clients three years ago,” he said. “We continue to grow our SI shelf in the field of private markets as well.”

Bank of Singapore has seen factor rotation among clients throughout the past 18 months. Chia said that 2019 and 1Q20 saw strong demand for ‘momentum’ and ‘emerging market’ factors. In March 2020, once the impact was being felt of the global pandemic, investors began seeking investment opportunities in factors such as value, ESG, quality, and minimum volatility. “This allowed for exposure to affected markets and asset classes while limiting volatility and keeping risk manageable,” she added. However, she said that the momentum factor has resonated well among clients during the pandemic as investorscontinue to allocate capital to the “stay-at-home” and digitalisation themes. On the ESG factor, Chia echoed Zuercher and Quance’s views, saying that the bank has seen record inflows into ESG strategies year to date. “We expect this trend to continue as investors will keep on emphasising ESG factors alongside traditional financial metrics,” she said.

Concerns remain While a number of PBs have started to onboard quantitative funds on their product platform, either through third party partnership or inhouse development, some players are adopting a wait and see attitude. Wealth manager Noah is one of them. Steve Zeng, Steve Zeng. CEO of Noah International (Hong Kong), told Asian Private Banker that single factors can be cyclical, and thus investors are advised to combine these into multi-factor portfolios. “However, even a well diversified long/short multi-factor portfolio can have significant drawdowns or muted returns over time, which can be unnerving for our investors who are not as familiar as PB investors with quantitative investment methods,” he said. In addition, for some HNWIs, it can be difficult to separate compensated and uncompensated risks in a real-world implementation. “As it stands now, you can’t just buy value factor or quality or momentum without other risks in the same package,” he said. From the client demand’s perspective, clients rather invest in quality companies with clear risk disclosure than those which have targetspecific risks that cannot be separated from other risks. “That’s why our product development has been tilted towards alpha strategies,” he said. “But as our clients become more sophisticated, with our educational efforts, regarding these products, we believe these kinds of products will be made available on our product shelve in the future.”

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Singapore IAMs under pressure to consolidate and retain lean structure for profitability The IAM scene in Singapore has entered a new growth stage of late, boosted by supportive regulatory developments and the rising need of HNWIs — especially those from Asia — for diversification across geographies. But IAMs are constantly battling with two opposing forces: on the one hand, they have to achieve the “economy of scale” with sufficient AUM and fewer private banking relationships. On the other hand, they are compelled to keep their organisational structure lean and expenses low. “The key test is AUM — an IAM starting with AUM short of S$200 million will find it difficult to maintain, unless its AUM quickly rises to about S$300 million or more,” said David Toh, CEO of Sinopartners, an IAM services provider based in Singapore. Toh asserted that S$300 million is the minimal threshold for a potentially successful IAM business. Most IAMs started their business with

cornerstone clients that are able to provide the IAMs with a significant amount of AUM,” he told Asian Private Banker.

The raison d’être of IAMs With sufficient AUM in the first place, running an IAM business can bring advantages not seen at private banks, argued Toh. For instance, IAMs that are larger in size can directly deal with investment banks and are effectively cutting out a lot of services traditionally offered by private banks. The IAM model enables a better alignment of interest between the business and the clients. “IAMs no longer have to stick to one bank and can invest in funds marketed by various banks with the better product offering and better prices,” Toh pointed out. “Whereas a bank has its own KPIs and agenda that may not necessarily align with [the IAM] client interests.” 47

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This may have accounted for the recent influx of private bankers joining IAMs in Singapore. But private banks still have a role to play, Toh quickly added — they need to act as custodians to the funds and make the execution. “Private banks and IAMs work very closely together. When AUM increases in the IAMs, it will reflect in the increased activities at the private banks.”

Outsourcing and digitalisation are new priorities “COVID-19 has brought substantial change to the industry. As a result, most IAMs have put a heavy emphasis on prudent risk management due to the unusual volatility in the financial markets,” Lee Su Lynn, chief operating officer at Sinopartners, shared with Asian Private Banker. She observed that the clients are shifting their investment styles: they have become more frequent in trading, and are preferring shorterduration investments. “This actually translates well for the IAMs as a larger transaction volume means more revenue.” While initially struggling with the “work-from-home” regime for lack of infrastructure, many Singapore IAMs have been quick to adopt changes with the help of government grants, noted Lee. “Digitalisation has been one of the most considered topics by the IAM industry as the need for data security while working off-site is heightened, especially considering the continuous need to meet compliance requirements,” Lee observed. She addded that the firm has seen more IAMs investing in software and automated systems — cloud based solutions, for instance.

Lee believed that the digitalisation drive is part of the IAMs’ cost-cutting exercise, so as to free up the manpower from manual reconciliation work and towards more revenue-generating activities. In addition, IAMs increasingly tend to outsource operation functions from HR to accounting and compliance roles to keep costs low. “From a cost perspective, the cardinal model for IAMs is to aim to have between three to four key private banks — instead of splitting the AUM across ten banks — so as to maintain relationship and price competitiveness with these key relationships,” added Lee.

Consolidation inevitable for IAMs As more players join the field to divide up the IAM profit pie, revenue certainly has appeared more stretched forsome. Against this background, Toh highlighted the necessity for Singapore’s IAMs to consolidate, either through mergers or takeovers. “Consolidation means economies of scale, and by merging, IAMs may find themselves with greater bargaining power with private banks and investment banks and thus able to achieve a more efficient fee structure. For the IAM industry in Singapore to mature, IAMs should consolidate,” Toh asserted. Consolidation has been taking place and the industry is anticipating more to come on the heels of the COVID-19 pandemic. More established IAMs with bigger AUMs, instead of numerous IAMs of varying sizes, would make monitoring the segment a less onerous task for Singapore’s regulators.

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Crisis tests PBs’ commitment to clients and markets: DB WM’s Lynn Hermijanto

The pandemic may have wrought unprecedented challenges to the world economy, but Lynn Hermijanto believes that this is the time for a truly committed private bank to shine by ‘handing the umbrella to clients in rainy days’. “There’s a saying that goes: ‘Never waste a crisis’,” explained Lynn Hermijanto, managing director, Southeast Asia wealth management coverage at Deutsche Bank Wealth Management in an interfview with Asian Private Banker. “One of the things of which we are really proud, in terms of helping clients this year, is the fact that when things were in total flux — with fear stricken people working from home, and credit markets dislocated — we were able to put together a US$600 million financing package in six weeks for a Singapore client who was looking to refinance a large commercial real estate asset in the US.” Lynn Hermijanto, Deutsche Bank “It required us to be extremely client-centric, working with the real estate team in the US and the credit team in London — in addition to connecting to colleagues in investment banking, as well as coordinating

work with external legal and tax counsels.” Hermijanto vividly remembers the circumstances in which the transaction was done: “It was at the height of the COVID-19 pandemic in New York City in March. The market was at the pinnacle of distress, and yet our team was relentlessly trying to bring together a solution for the client.” She continued: “Another notable win was a complex US$700 million structured bridge loan facility we packaged and syndicated for an Indonesian name. At the heart of all we do, we aim to work together, across divisional lines, coming together as a team to deliver real impact and tailored solutions to key clients. We are absolutely focused on onebank delivery at Deutsche Bank.” What shines through during the hour-long conversation, is Hermijanto’s passion for her work — the meticulous details of how to nurture longterm relationships in the exquisite circle of UHNW families in Southeast Asia; her intricate web of connections with teams across the entire 49

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bank and at management level; and the minute understanding of how institutional-like transactions can be exclusively offered to this tier of sophisticated clients whom she serves in times of great volatility.

market, I’m focused on pulling resources for this market, and I have a long-term view when cultivating the right relationships in the market in which I want to establish a foothold.”

“Earlier this year, we actively identified and sought to capture positive basis trades by recommending suitable clients to switch out of bonds and move into CLNs [credit-linked notes],” she confided. “I think these are ideas that are more institutional-like — versus your typical ‘let’s buy this bond, let’s do these ELN [equity-linked notes], let’s sell the stock’”. “We take on a very different approach in generating alpha for our clients. We try to hunt and show opportunistic ideas that we believe no one else in the market is showing yet.”

“It requires the commitment of senior managers, the support of the firm’s balance sheet, and a corporate culture that is focused on the longevity of relationships and winning the hearts, minds and wallet shares of clients. I am fortunate to be able to do so at Deutsche Bank.”

A corporate commitment to excel Following Indonesia’s tax amnesty programme in 2017, there have been shifts in the country’s offshore market. IDR 4,881 trillion worth of assets has been disclosed and some IDR 147 trillion of assets repatriated onshore, posing challenges to the offshore business of some private banks. While there has been an increase in investing money onshore over the last four years, Hermijanto has also seen an unprecedented surge in family office creation and multi-family office structures in Singapore, symbolising the upward trajectory of continued offshore wealth generation by Indonesian UHNWs. “UHNW clients increasingly see the value of having more defined investment processes and being more methodical in portfolio risk management. Additionally, they now understand the need for proper structures and clear processes to cope with global regulatory demands.” In order to serve the most prestigious class of clients in the country, Hermijanto said her mandate is to “go after the most influential families and do everything we can for them as a firm, and let’s work to invest, nurture and build the right relationships that will last for a really long time”. “You need people who are focused on relationships,” she stressed. “And they need to be in a bank with a culture that says: I want to be with this

A friend in need is a friend indeed According to Hermijanto, the key to sustainable and prosperous business in Indonesia (and that might just as well apply to other Southeast Asian frontier markets) is to be willing to offer the necessary help when clients reach out to the bank with funding needs; to show long-term commitment to the particular geographical market, even in times of economic turbulence. “My largest relationship summarised it very well: You know Lynn, when the skies are blue and the sun is out, everyone wants to lend me an umbrella and be my friend. But when it rains, who will extend an umbrella to me?. His point is that, in any relationship, the strength of the partnership is only tested during hard times. It is during the most difficult and challenging times that the truth is revealed,” explained Hermijanto. In deciding wallet allocations to banks, my clients do look beyond mere pricing advantages. To them, there are more important strategic considerations: Will this bank stick around? Are they committed to this relationship? Can they be counted upon when help is needed?,” she said. “I would say that sometimes, establishing market presence is easy. But being able to stay in that market successfully and be in tight partnership with the client over periods of time, that is the challenging bit. That requires real commitment and endurance, as well as an authentic focus on building long-term relationships. This isn’t something I personally struggle with because Deutsche Bank is committed to Southeast Asia. Indonesia is a strategic market for us in wealth, and a key market for investment banking.”

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