Business performance

THE FINAL WORD

BUSINESS PERFORMANCE

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

”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 its own set of challenges, 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 THE FINAL WORD

BUSINESS PERFORMANCE

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 industry 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.