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Affin Bank’s automated safety deposit locker has enhanced accessibility for consumers and proven highly profitable for the bank

The rising demand for digitalisation and round-the-clock accessibility is reshaping the interaction between banks and their customers. While the protection of valuables remains a physical aspect, the expectation of continuous availability has become a tangible reality.

A decade or so ago, the safe deposit box sector was no longer seen as an expanding market in the banking industry. This looks to have changed substantially, with the demand for self-service safes in particular witnessing significant expansion in recent years; some banks have even recorded double-digit growth rates.

By addressing the dual challenge of ensuring secure storage for valuables while guaranteeing continuous accessibility, self-service safe deposit boxes have enhanced both customer convenience and the profitability of banks.

Efficient banking

To stay abreast of the dynamic trends in the banking industry and deliver efficient solutions, Malaysia’s Affin Bank has introduced the automated safety deposit locker (ASDL), paving way for better self-service solutions.

The ASDL is designed to provide customers control over their valuables, eliminating the need for traditional safety deposit boxes.

By offering a user-friendly, accessible self-service solution, the bank has expanded its reach to a wider demographic. This innovation ensures even individuals who may have hesitated to use traditional banking services now have a convenient and secure avenue to manage their finances.

Through the automation and streamlining of safe deposit transactions, Affin Bank has optimised resource allocation, minimised manual intervention and established a more efficient operational model.

Within a span of less than six months since its launch, more than 15% of the bank’s ASDLs were occupied, indicating customer acceptance of the service and a positive return on investment.

Elevating security standards

Affin Bank has prioritised security through a commitment to technological innovation within the self-service banking realm.

The bank’s ASDL system is a testament to this commitment through the seamless integration of cutting-edge technologies to fortify security measures. This innovation aligns with consumer preference for self-directed banking experiences, enabling secure and convenient access to their belongings at all times.

Equipped with the latest technology and advanced security measures such as RFID access cards, biometric authentication, PIN codes, locker keys, artificial intelligence-driven security protocols and real-time monitoring, the ASDL ensures optimal security in self-service transactions.

The bank has added an extra layer of vigilance through real-time monitoring, thereby ensuring that customers can partake in self-service transactions with confidence in the system’s security and integrity.

Affin Bank has been recognised as the winner for the Best ATM and Self-Service Innovation award at the Annual Retail Banker International Asia Trailblazer Awards 2024.

Itaú Private Bank is nurturing customer relationships through enhanced transparency and strategic investments.

Itaú Private Bank has combined access to the best consolidated financial services offered in Latin America with an open investment platform that gives clients access to investment products from the best houses in the market, enhanced by expert curation and support.

Customer-centric solutions are essential in banking as they place customers at the core of all operations and decision-making processes. By focusing on enhancing the customer experience, banks can gain the trust and loyalty of their customers, forging relations that can last a lifetime. Furthermore, in an age of rapid technological innovation and increasing competition, banks are making it a priority to adapt and innovate in order to stay relevant and achieve long-term success.

CUSTOMISED BUSINESS MODEL

Brazil-headquartered Itaú Private Bank works alongside clients, helping them define their investment goals, structure a portfolio aimed at producing excellent returns and find solutions for the perpetuation of legacies across generations. Offering a diverse line-up of investment and advisory services in estate planning, taxes, family and corporate governance, the bank’s strategy is based on providing customised, conventional and non-traditional banking solutions, reflecting the overall interests of clients.

Itaú Private Bank is consistently working towards providing a diverse ecosystem of services and products, offering global services to customers, strengthening partnerships, enhancing its technology platform and further expanding operations within and outside Brazil. To do this, the bank has combined access to its consolidated financial services offered in Latin America, including Itaú BBA, Itaú Asset Management and Itaú Banking, with an open investment platform that gives clients access to investment products from the reputable institutions in the market, enhanced by expert curation and support.

STRENGTHENING RELATIONSHIPS

Over the years, Itaú Private Bank has successfully developed a reputation for its strength, flexibility and commitment to transparency, which have been nurtured through extensive customer relationships, investments in cutting-edge technology and comprehensive organisational training.

To connect with a larger global Brazilian audience, regardless of where the onshore or offshore investments or non-investment products are made, the bank provides customers with the convenience of a “one-stop shop”. In Brazil, the bank aims to continue working on significant environmental, social and governance (ESG) initiatives across various fronts, including tailored product offerings and exclusive events for affluent clients.

Additionally, to address the growing contribution of the agribusiness sector to Brazil’s GDP, Itaú Private Bank aims to collaborate with other segments of its parent group, such as Banco Itaú BBA, to establish a coverage model in other regions in Brazil. This model will primarily target rural producers, entrepreneurs and investors interested in the sector, offering them a range of global investment and credit products.

Itaú Private Bank has access to the leading consolidated financial services offered in Latin America and an open investment platform that gives clients access to investment products from the best houses in the market, enhanced by expert curation and support.

Itaú Private Bank has been recognised as the winner of the Most Effective Investment Offering award and Outstanding Global Private Bank in Latin America at the PBI Global Wealth Awards 2023.

Bradesco Global Private Bank is curating customised solutions to manage, protect and improve clients’ wealth.

Adhering to its client-centric strategy enabled BGPB to achieve 68 per cent growth compared to the pre-pandemic period.

With a strong national and international presence, Brazil’s Bradesco Global Private Bank (BGPB) works closely with its clients to preserve and manage their family wealth across generations and offer wealth strategies compatible with their personal needs and risk profile.

To cater to the unique requirements of its clients, the bank has established a comprehensive wealth management framework covering a range of assets, both easily accessible and less liquid, and provides clients with ideal investment options and structures for preserving family wealth.

Clients have access to a complete, open and differentiated platform of local and international investments, including exclusive funds. Backed by a skilled team of advisers and economists, BGPB provides access to several business solutions including investment banking, credit, insurance, brokerage and pension funds.

CLIENT-CENTRIC APPROACH

Clients play a vital role in shaping BGPB’s strategy. Tailoring its approach to match the needs, life stages and aspirations of its clients, the bank offers assistance in asset management and financial advice.

Adhering to this strategy enabled the bank to grow its assets under management (AUM) 59 per cent between 2022 and 2019 (pre-pandemic), and 107 per cent between 2018 and 2022. As a result, in 2023, BGBP increased its market share by a total of 3.8 percentage points against 2018. Over the past year, the number of customers increased by 8 per cent, proving the bank’s goal to devise customer-centric strategies.

ROBUST LEADERSHIP

BGPB has been transforming its service model to provide stronger representation in management versus operations. Over the past two years, 17 per cent of the bank’s positions were transformed into management, reaching 81 per cent of personnel dedicated exclusively to the business.

By embracing an inclusive model of approach, BGPB has effectively drawn in and retained talent throughout the years. The global private banking team in particular has experienced a notable growth of 107 per cent in the past five years and continues to invest in strategies and solutions that differentiate itself from its peers.

Bradesco Global Private Bank has been Highly Commended in the Outstanding Global Private Bank in Latin America category at the PBI Global Wealth Awards 2023.

Société Générale supports clients in their banking journey with responsible and innovative financial solutions.

Société Générale Private Banking has developed fluid and transparent experiences for its customers to help them bank easily and independently, using integrated and efficient processes.

Société Générale Private Banking (SGPB) is the wealth management arm of French lender Société Générale and offers wealth management solutions and fiduciary services to entrepreneurs and high-net-worth-individuals (HNWI). Adopting a holistic approach to wealth management, the bank takes into consideration each client’s personal requirements and advises on the most suitable asset allocation.

SGPB has developed fluid and transparent experiences for its customers to help them bank easily and independently, using integrated and efficient processes. Solutions include the launch of Mon Patrimoine (My Wealth), an application developed with and for private banking clients in France. Using a single internet and mobile interface, the product offers customers a holistic view of their entire portfolio, regardless of whether it is housed at Société Générale or not.

DIGITAL INNOVATION

Additionally, the bank has developed Synoe, an in-house solution based on an innovative algorithm and natural language technology that enables investment advice to be digitally and automatically sent to eligible clients depending on their requirements, investor profile and their targeted investment portfolios. Meanwhile, developed in collaboration with clients, the Coach Financier application has been exclusively designed for clients that are looking to make their own investment decisions.

With customer-centric solutions defining the bank’s overall objectives, SGPB’s management team comes equipped with the resources to provide clients with results that match their strategy, market knowledge and risk profile. Customers can take advantage of personalised and diversified allocation across all asset classes, long-term monitoring of their investments and further benefit from the bank’s environmental and societal convictions. Dedicated wealth engineers assess the requirements of each HNWI and how to best achieve their goals. Société Générale delivers highly targeted solutions by matching a tailored strategy to the needs of every client.

CORPORATE PHILANTHROPHY

One of SGPB’s core missions is to inspire clients and help them build a meaningful and impactful philanthropy strategy for themselves and their family. Financial experts lead clients in every step of their philanthropic journey, identifying and nurturing their willingness to give back, crafting a tailor-made strategy, building the governance, involving all the generations within the family, and setting metrics to measure the impact of their generosity.

To help its clients donate to a good cause before or after their demise, SGPB has created 29 Haussmann, a foundation run under the aegis of Fondation de France. The organisation supports the implementation of solidarity projects devoted to children and young people and allows clients to benefit from dual expertise in wealth engineering and societal expertise.

Société Générale Private Banking has been recognised as the winner of the Outstanding Global Private Bank in Europe award and has been Highly Commended in the Outstanding Philanthropy Offering category at the Private Banker International Global Wealth Awards 2023.

Standard Bank is streamlining its portfolio and enhancing the client experience through digital innovation and global accessibility.

Standard Bank provides banking advisers with real-time, accurate client information, enabling them to proactively deliver insights and recognise challenges and opportunities as they arise.

With a diverse regional presence spanning 88 offices across 17 countries, Standard Bank partners with Africa’s affluent and high-net-worth (HNW) individuals, helping them build, grow, manage and preserve generational wealth of their families.

Anchored on its 160 year legacy of driving Africa’s growth, the bank’s value proposition is designed to identify unique client requirements and offer tailored and integrated solutions that are delivered through a superior client experience. As a purpose-led, client-driven private bank, Standard Bank’s business model is structured to strategically address clients’ onshore and offshore banking requirements.

A team of experts focuses on developing intelligent relationships with clients by creating insight-led experiences that are tailored according to each individual and their family’s ambitions and financial motivations.

DIGITAL STRATEGY

Standard Bank’s international footprint, combined with innovative digital technology that facilitates engagement across multiple platforms, enables clients to leverage the expertise, tools and diversification required to create a globally effective wealth strategy.

A key strategy of their international citizenry is their next generation academic programme that supports African children to study in renowned global universities. Additionally, emigrants and non-residents have also been identified as key growth drivers, with outcomes designed to assist them even when outside the country.

Through the innovation and adoption of a suite of data-led, internal digital tools, Standard Bank has created a multi-channel engagement strategy that provides banking advisers with real-time, accurate client information, enabling them to proactively deliver insights and recognise challenges and opportunities as they arise.

WEALTH MANAGEMENT

Designed to meet the growing need for digital transformation across financial processes, Standard Bank’s wealth management onboarding tool (WMO) enables wealth managers and wealth administrators to efficiently create investment proposals and instructions incorporating client information obtained from various sources. This helps in streamlining the end-to-end processes and in reducing the turnaround time.

The bank’s wealth management app ‘My360’ allows advisers to view client information in real-time with access to their net value assets (NAV), asset allocation and liabilities. The application includes a function that enables a holistic view of clients’ assets including those held in trust and investment holding companies.

Additionally, the bank’s international investment and payments application ‘Shyft’ has been incorporated into the bank’s operations, enhancing client experience through global accessibility. The app has been developed for clients looking for a secure and self-driven offshore investment experience.

Standard Bank’s focus on client-centric solutions has helped it forge lifelong partnerships with clients and enabled positive results across its financial outcomes. Additionally, the bank has witnessed a 7 per cent growth in clients and an 8 per cent increase in assets under management (AUM).

Standard Bank South Africa has been recognised as the winner of the Outstanding Global Private Bank in Africa award at the PBI Global Wealth Awards 2023. It has also been Highly Commended for Best Family Office and Outstanding Wealth Management Technology Initiative-Back Office.

LGT Private Banking supports clients in every step of their philanthropic journey.

If clients are looking to maximise their philanthropic impact, we’re there to support them throughout their entire philanthropic journey.
~ Nina Hoas, LGT Private Banking

Thinking and acting for the long term is in the DNA of the Princely House of Liechtenstein and is one of the reasons the family has been involved in various charitable causes for centuries. These values are closely reflected in the convictions and strategies of LGT Private Banking.

For over 15 years, the private bank has placed a clear focus on philanthropy in order to help ensure a better tomorrow for society and the environment, and to support clients in maximising their positive impact in this area.

AMPLIFYING IMPACT

Over the centuries, philanthropic principles and approaches have continuously evolved. Unlike in the past, there is now a much greater emphasis on making philanthropic commitments sustainable and scalable in order to amplify their positive impact. In other words, the aim today is not just to do good, but to achieve the best possible outcome with the resources available, which can include experience, expertise and partnerships.

This entrepreneurial approach is one of LGT’s guiding principles in its commitments to society and the environment. The bank’s owner, the Princely House of Liechtenstein, places great importance on developing and aligning its philanthropic activities in such a way that they effectively and efficiently contribute to positive and sustainable change.

It was against this backdrop that LGT established the LGT Venture Philanthropy Foundation in 2007. In addition, with its philanthropy advisory offering, LGT supports clients in every step of their philanthropic journey – from defining their underlying values and areas of engagement to developing a strategy and implementing it successfully.

DRIVING CHANGE

“If you have a medical problem, you go to a doctor and if you have legal issues, you talk to a lawyer,” says Nina Hoas, head of LGT’s philanthropy advisory division. “So if clients are looking to maximise their philanthropic impact, we’re there to support them throughout their entire philanthropic journey, which often spans generations.

This process begins, Hoas explains, with developing a vision and a concrete mission. “Using that as a basis, we then build a philanthropic strategy with them and together define a clear process for achieving long-term impact.”

But in addition to being beneficial for individuals who are new to philanthropy, the advice provided by LGT’s philanthropy advisory team can also help philanthropists who have been working in the field for many years. “Experienced philanthropists also want to talk to experts with an in-depth knowledge of relevant topics, and want to learn about new opportunities in philanthropy,” says Hoas. There is no lack of compassion and commitment in today’s world. But the sheer complexity of social and environmental problems can make it difficult to effect positive change. “There are so many people who have the best intentions but who don’t achieve the impact and effect they are striving for,” says Hoas.

“This might be due to hierarchies, or a lack of coordination within the family. Or it could be the result of a lack of strategy, or because they’re simply too far removed from the problem. I’m convinced that strategic philanthropy is the key to lasting change.”

LGT Private Banking has won the Outstanding Philanthropy Offering award at the PBI Global Wealth Awards 2023.

Julius Baer has a differentiating business model focused on wealthy clients, underpinned by an engagement-led sustainability strategy.

To serve its clients better, Julius Baer has upgraded its service model and delivery, and introduced new touchpoints and solutions reshaping the way operations are conducted.

Financial institutions are constantly re-evaluating their strategies to include what works best for their customers and business. Striving to keep empathy and agility at the core of its operations, banks are becoming more transparent with clients, thus driving their retention and ensuring business longevity.

When Swiss wealth management bank Julius Baer presented its updated strategy for 2023-2025, the bank’s CEO Philipp Rickenbacher, commented: “We are initiating a new phase of profitable growth, building on the transformation we pursued successfully since 2020. Our client-centric business model and our dedicated focus on high and ultra-high net worth clients put us in a strong position to shape our future.”

TRANSFORMING OPERATIONS

With a structural efficiency programme in place, Julius Baer was able to reduce costs by CHF200m ($227m) by the end of 2021, demonstrating that the bank’s financial strength is a prerequisite for the successful implementation of its business strategies.

The greatest impact on Julius Baer’s operations has come from the introduction of value-based pricing for its services. Over the past three years, the bank has repriced more than 20,000 accounts, working closely with clients to ensure mutually beneficial outcomes.

This significantly bolstered the bank’s revenue generation capability for future sustainability.

To strengthen its operations, Julius Baer has restructured its legal entity portfolio and made necessary upgrades to the business wherever required. Working towards further enhancing its value proposition, the bank has reviewed the requirements of high- and ultra-high-net-worth clients and designed solutions to match their requirements. Over the course of the past financial year, Julius Baer reassessed its market strategies, ensuring the largest investments were allotted to areas with the highest strategic and profit potential, building on local critical mass. This has set the foundation for Julius Baer’s next growth cycle, where the bank aims to scale at a global and local level, while maintaining a well-diversified international footprint.

To serve its clients better, the bank has upgraded its service model and delivery, and introduced new touchpoints and solutions reshaping the way operations are conducted.

SUSTAINABLE PRACTICES

With sustainability being a key part of its client value proposition, Julius Baer has been taking proactive measures to achieve its net-zero goals by the end of 2030 as part of its climate strategy. Encouraging positive impact and sustainable practices, the bank aims to broaden responsible and sustainable investment offerings, integrate environmental, social and governance (ESG) principles into its risk management framework, and roll out ESG client reporting, including climate metrics, globally.

By accelerating investments in technology and people, Julius Baer has upgraded its digital channels to include new e-banking, content distribution and digital client onboarding solutions. Working towards its strategy of being the most digital bank for relationship managers, the bank has invested in digital tools including an advisory suite and mandate solution designer, crucial in helping scale the business in a flexible, yet regulatory-compliant way.

Julius Baer has been recognised as the winner of the Outstanding Global Private Bank Global trophy at the PBI Global Wealth Awards 2023.

Krungsri is continuing its client-centric strategy across investment processes by providing open architecture wealth solutions to clients.

Krungsri has introduced the ONE Krungsri Investment View, which offers investment insights, research and strategies from Krungsri professionals.

With an aim of providing sustainable business solutions to its clients, Thailand’s Bank of Ayudhya (Krungsri) has introduced a new segment called Krungsri Private Banking. Curated by a team of professional advisers, the segment focuses on delivering comprehensive investment advisory services and offering a balanced perspective of local and global investments. Krungsri Private Banking is designed for the bank’s top-tier customers having an asset-under-management (AUM) of THB50m ($1.5m) or higher.

VALUE PROPOSITIONS

As Thailand’s fifth-largest universal bank, Krungsri continues to adopt a client-centric strategy across its investment processes by providing open architecture wealth solutions that help clients monitor their investments and make informed decisions. Additionally, the Krungsri Investment Intelligence provides professional investment advisory services with a long-term asset allocation approach. This is handled by a team of professional investment strategists and consultants.

Krungsri has also partnered with an investment, advisory and wealth management solutions provider, US-based BlackRock, to give clients access to investment tools.

Constantly working to enhance client support and providing a holistic understanding of investments, the bank has introduced the ONE Krungsri Investment View. This platform offers a wealth of expertise such as investment insights, research and strategies from Krungsri professionals. This platform covers a range of areas such as economics, currencies and global financial markets.

ROBUST OUTCOMES

In order to cater to the private banking segment, Krungsri has launched several new products in the past year. These include foreign currency deposits, direct offshore mutual funds, direct offshore stock trading, US dollar-denominated bonds and US dollar-structured notes.

Additionally, the bank has initiated the launch of three private equity funds, strategically timed to yield positive returns for 2022. These funds outperformed both the global private equity sector (which experienced a decline of -2.7 per cent) and the developed market equity (which saw a decline of -17.7 per cent). Over the last three years, the proportion of private banking clients has increased at a compound annual growth rate (CAGR) of 16 per cent, while the compound value (CV) of deposits, mutual funds and bancassurance has seen a CAGR of +149 per cent during the same period.

Bank of Ayudhya (Krungsri) has won the Launch of the Year award at the PBI Global Wealth Awards 2023.

NOTHING ARTIFICIAL ABOUT THE BENEFITS GAINED BY USING AI

To enhance and personalize customer journeys Taishin International Bank is using artificial intelligence (AI) Deep Learning, winning it the Outstanding Wealth Management Technology Initiative – Back Office trophy at the virtual PBI Global Wealth Awards 2021. The bank was also Highly Commended in the Outstanding Wealth Management Service for the Affluent category. The customer wealth management (WM) offering at Taishin uses AI algorithms, such a Long Short-Term Memory (LSTM), Light Gradient Boosting Machine (LGBM), and AutoEncoder to personalize optimal asset allocation. The system then moved on to managing the relationship with customers through accurate prediction and analysis of behaviors. The AI solution has two key benefits:

Enhanced customer experience (CX): delighting customers with personalized information and updates helps win and retain clients.

Sales efficiency: better targeting and personalization leads to better results.

Taishin initially used LSTM, supplemented by an attention mechanism, to construct a personalized asset allocation module in the customer WM system. Its next goal was omni-directional customer management and to build a customer relationship management (CRM) module, which it began early this year. Through accurate customer segmentation and forecasting activity, the bank can now truly understand customers’ needs and keep them happy to everyone’s mutual benefit.

A usage example might include analyzing a customer’s past data and then using the AI to quickly calculate their risk preference, saving them having to answer a series of questions. It then feeds that information into managers or digital channels to provide optimal asset allocation recommendations. Frequent, deeper and more productive reviews about the health of asset allocations are also now much easier to perform, deepening the relationship.

Technology

The use of AI powered bidirectional Long Short-Term Memory (LSTM) ensures a two-way time series is reliably learned by the machine at Taishin, but the bank also uses the LGBM framework and AutoEncoder algorithm, which is often used in image recognition, to retain the most prominent features in customer images. This helped construct the CRM module in the second phase of the project.

LGBM: was developed by Microsoft. It is a framework that implements the GBDT algorithm and supports high-efficiency parallel training. Compared with the tech famous XGBoost algorithm, LGBM has some advantages, such as faster calculation speeds and it uses less memory.

AutoEncoder: is a model that automatically learns the features in data through a neural network to achieve specific tech functions, such as Dimension Reduction, Data Denoising, and so on.

The two technologies are used to predict the time point of customer demand and the degree of customer activity in the next month, allocating resources, data and campaigns accordingly. Real-time warnings are given about the threat of customer churn, based on past learnings, so action can be taken to prevent customer loss. A feedback loop continuously improves CX and customer ‘stickiness’. The fact Taishin has the highest number of digital customers in Taiwan and therefore the richest customer behavior data and transaction set of information helps ‘feed’ the AI. The bank also collects a large amount of internal and external data, including external behavior tags, public information, and so on to construct its comprehensive customer database, which is of course plugged into the AI to power its forecasting, accuracy and operation.

It has been rolled out across all corners of the WM unit. An immediate benefit was the system brought in NT$85 million (US$3m) in revenue to Taishin throughout 2020 and, of course, since the CRM module was introduced this year these figures are going up all the time. Efficiency and automation capabilities have also improved.

Future plans include a more formalized and powerful product recommendation engine. It will build on its existing use of Factorization Machine and the Transformer algorithm to examine customers’ click behavior on mobile banking to refine the bank’s offering to align with best-in-practice systems such as YouTube’s video recommendation engine. Development work here should increase accuracy, targeting and results.

An expansion of data sources and new variables, such as text mining on corporate announcement documents, automated examination of financial news reports, community articles on social media and other unstructured data sources, plus stock data from domestic and foreign exchanges will further optimize investment portfolio risk identification and dissemination. Feeding the AI delivers better results.

Outstanding WM service

Taishin was also Highly Commended in the Outstanding Wealth Management Service for the Affluent category at the PBI Awards 2021 for its overall offering, its diverse investment options, and its use of ‘big data’ powered analytics to tailor make products for clients based on their existing behaviors. The AI application is just a further amplification of what was already a pre-existing strength of the company.

The loyalty program of the bank was particularly noteworthy as well. It spans all sections of the bank, including an elite customer program that offers US$2,700 worth of membership privileges via premium card rights, banking and foreign exchange (FX) transaction reductions, and exclusive offerings such as the chance to attend music, fashion or art events and meet performers. The Emerald member service also offers high-net worth (HNW) customers access to private banking services, Michelin starred restaurants, and so on.

For the mass market, and to feed the WM affluent value chain described above, there was also a revamped Loyalty Program 2.0 for the general bank last year to earn Taishin Points, which could be earned via debit card usage, mobile or online banking activities, bill pay, loan or other such activities. Points could be redeemed, at a rate of 1 point being equal to NT$1, for travel, hotel, coffee or shopping vouchers. Point could also be turned into cash, which was no doubt useful during the Covid-19 pandemic.

Outstanding Private Bank for Growth Strategy

China Merchants Bank (CMB) won Outstanding Private Bank for Growth Strategy at the virtual PBI Global Wealth Awards 2021 because of its 24.36% AuM growth rate last year, helped by strategic advances involving (i) diversified services, advice & products; (ii) online & remote servicing in response to Covid-19; (iii) digital operations and marketing; (iv) events.

CMB Private Bank (PB) was established in August 2007 for high-end clients with assets of over RMB 10 million (US$1.55 million) beyond the lower level wealth management parameters. The PB is growing fast, as indeed China has been during its lifespan, benefitting from its presence in the expanding country, but also its awareness and future strategy to follow clients’ international expansions and their footprints. As Chinese firms operations have gone increasingly global over the past 14 years, so have the bank’s. For example, as initial public offerings (IPOs) by Chinese companies on foreign stock markets grow a whole group of entrepreneurs is being turned into potential PB clients. Targeting and catering for them delivers growth.

The PB is also successfully converting corporate finance clients that wanted loan help from the commercial bank and successful entrepreneurs on its own books into private banking clients latterly as they age, advance and require advisory help turning business success into a legacy. This creates a clear value chain and pathway across its organizational operations.

The bank’s effective strategy is illustrated by the fact that:
High net-worth individual (HNWI) clients rose last year by 22.41% to 99,977, a three-year high that extends its lead over domestic rivals.
The average per capita Assets under Management (AuM) figure for clients was RMB 27.75 million ($4.3m) each.
AUM grew 24.36% in 2020, or RMB 543.6 billion ($84.95 billion) from the year before even amid the Covid-19 pandemic, which paradoxically perhaps lead to a surge in savings and/or wealth planning for the affluent. Despite the challenging environment people wanted to sort out their legacies, release or store capital depending on their needs, and generally rejig their finances.

The key strategic decisions to follow and cater for Chinese wealth as it internationalizes and create a pathway from the commercial into the private bank for entrepreneurs, have been backed up specific growth initiatives, such as:

Diversified services, advice & products: Over its lifetime, CMB PB has established a service system with professional investment consultant teams as its core advantage. It has improved product services and overall assets management capabilities, including market research, investment strategies, block asset allocation, product portfolio selection, and performance tracking and surveillance. Qualified private bankers together with the investment consultant team provide a set of exclusive high-end wealth management plans for clients, including giving advice on funds, shares, bonds, foreign exchange (FX), insurance, and other varieties of portfolio. Moreover, they can also provide professional suggestions in terms of law, tax, corporate finance, investment banking, and advisory services in the fields of private equity, real estate investment, art collection etc. The unit now spans the full gamut of private banking.

Online & remote servicing: As Covid-19 forced businesses and clients to change how they interact, CMB PB accelerated its digitalization. One example is its Private Banking Exclusive Zone (PBEZ), which is based on China Merchants Bank’s app that has 80 billion monthly active use instances (MAU). PB clients with their modified version can now easily reach necessary reporting, advice and other such online PB services on the special platform.

Digital operations and marketing: online campaigns, such as the ‘Exclusive Upgraded’ one attracted over 100,000 participants and 12,000 of them have been converted into qualified PB clients by increasing the financial assets in their CMB accounts. All they needed was some encouragement, and it didn’t have to be face-to-face, which was hard during Covid-19. The online and remote servicing capabilities described above were enough to ensure business operations could continue as ‘normal’ in a digitalized manner. Marketing and growth strategies were no different.

Events: Investment strategy seminars have been held by CMB and other investor education events for well over a decade. The aim is always to help clients grasp trends in the global market and understand how best to invest. Branding, new sign-ups, extra allocations and other such benefits all accrue, even if sometimes the events have had to held online recently due to Covid-19. Digitalization makes this possible.