Archives: Articles & Interviews

RBC Wealth Management (WM) won Outstanding Global Private Bank: North America at the virtual PBI Global Wealth Awards 2021 for its strong Canadian presence and the on-going expansion of its City National Bank (CNB) unit in the US and s private client group (PCG) wealth advisory firm – not to mention its expanding services and partnerships. A Highly Commended (HC) trophy was also given for its growth strategy.

Canada is RBC WM’s traditional ‘home’ market where it enjoys leading positions thanks to its long-established wealth planning, retirement, tax, estate & trust planning, succession, insurance, risk and other expertise, which is on offer to the mass affluent. It actively collaborates with RBC’s Personal & Commercial Banking (P&CB) arms to make new products and technologies available to this segment in an integrated and simple manner, inviting them along the value chain as individuals’ personal wealth grows.

The RBC Dominion Securities (RBC DS) full-service brokerage business and its Private Bank (PB) are also key contributors to growth, and indeed its win at the PBI Awards 2021. The latter PB arm is a market leader versus its six major competitors, with:

Revenue market share (36%)
Deposit balance market share (34%)
Loan balance market share (30%)

The RBC DS investment advisors and brokerage business offers local, global and south-facing US options, and a leading 26% market share. It has C$400 billion (US$315.1 bn) in Assets under Administration (AUA) and serves over 275,000 households.

America

In the US, the CNB unit is focused on private and commercial banking for Ultra High Net Worth and HNW clients, their businesses and families. It has contributed to RBC’s strong performance, alongside its 2,000+ PCG wealth advisors who serve 330,000 households from 170 branches across 40 states.

Over the past four years, the business has increased overall client assets from US$276 billion to US$416bn, with earnings growth from US$79 million in 2015 to US$261m in 2020, despite a tough prior year due to Covid-19 and low interest rates.

The CNB unit has a high-touch, proactive advice model, which has been buttressed by efficiency and productivity gains elsewhere and in additional digital technological capabilities. It offers a broad range of lending, deposit, cash management, international banking, equipment financing and WM services. The opening of new locations in priority markets in New York and Washington D.C. has extended its reach and deepened its specialization focus on the entertainment and political ecosystems, among other business and entrepreneur specializations.

HC: Outstanding Private Bank for Growth Strategy

The growth strategy at RBC WM, which was Highly Commended (HC) by the PBI Awards 2021, includes an RBC iShares strategic alliance between RBC Global Asset Management and BlackRock Canada. This helps investors interested in mutual funds or Exchange Traded Funds (ETFs). The iShares alliance has led the industry in sales over the last 12 months and continues to be the largest ETF complex in Canada. The US growth activities, described above, also contributed considerably to RBC WM’s commendation.

More recently, the firm has expanded its suite of Sustainability and Environmental, Social, and Governance (ESG) offerings across the entire organization. This is because it naturally spies the numerous growth opportunities available in the green agenda, and longer-term as the world moves towards meeting ambitious carbon net zero targets.

Maybank Group, a universal bank headquartered in Malaysia, set up Maybank Private to cater to the wealth management (WM) needs of high-net-worth (HNW) clients in 2014. Today, the private banking arm serves clients from its three booking centres. With a proposition to enhance clients’ wealth portfolios and capabilities to provide excellent service, Maybank stood out in its products and service standards to win the Outstanding Private Bank: Southeast Asia at the virtual PBI Global Wealth Awards 2021.

The private banking arm of Maybank has achieved much in the last eight years, growing its client base significantly. Maybank Private’s assets under management (AUM) stood at US$ 17.1 billion as at end 2020. This represents a 20.4% increase compared to 2019’s AUM of US$ 14.2 billion.

Three onshore booking centers have been established in Singapore, Malaysia and Hong Kong to serve clients across 10 ASEAN countries and Greater China, giving direct access to regional and global investment opportunities. Maybank Private has a deep and extensive presence in Malaysia and a full suite of financial solutions, including Shariah offerings, for their HNW and ultra-high-net-worth (UHNW) clients. Its Maybank Private London Desk also gives it global reach and acts as a strategic gateway to opportunities in the UK.

The private banking services are backed by Maybank Group’s capabilities and synergies across wealth products and solutions. A few examples are:

1. Leveraging Maybank Group’s network. This enables:

Close collaboration with units such as Global Banking and Business Banking to provide private banking solutions to business owners and C-suite executives as originally envisaged, completing the WM proposition.
A wider reach to the untapped Shariah market potential with Maybank Islamic Private Banking.
Seamless cross-border financing and a unique value proposition.
Upgrading of top clientele from Maybank Premier to Maybank Private, availing a suite of private banking solutions to clients as they move up the wealth continuum.
A regional client servicing model and mindset which increases contact, trades, consistency and client stickiness.

2. Regional client servicing mindset provides:

Potential client base from Maybank Group’s existing customers across Southeast Asia, Hong Kong and Greater China.
Cross-selling opportunities as a part of the organisation’s DNA.
A regional perspective to on-boarding, servicing and referring of eligible clients and creating a better client journey to meet clients’ needs effectively.

3. Seamless cross-border financing permits:
Timely and flexible cross-border investments.
Assets in home country pledged for investment opportunities found in another.

4. Leading the frontier in Islamic Private Banking and providing Shariah options with:
Maybank Islamic Bank as the largest Islamic Bank in ASEAN, and Malaysia being one of its key Islamic markets. It is also one of the top Islamic Banks globally.

Innovative Shariah-compliant products like General Investment Account (GIA-i), Islamic Dual Currency Investments, Islamic Auto-Callable Structured Products, and Islamic Legacy which are crucial to catering to clients’ specific needs.

Technology is a crucial element in the advancement of the bank. Maybank Private adopted Avaloq as its core banking system for the wealth business to enhance response time and the banking experience, while giving relationship managers a 360-degree view of each client’s total banking relationship, interest, price and risk tolerance level. The Maybank Mobile Wealth app has also enhanced flexibility, access and ease-of-use, while providing direct access to clients’ wealth management portfolios.

Established in 1967, Mashreq Private Bank has international reach with a presence in nine countries and strong Middle Eastern representation in Egypt, Bahrain and Kuwait, alongside its core UAE market. It serves high-net worth individuals domestically and HNWIs from across the world who look to the UAE as an offshore center. Its experienced staff, expertize and product, mutual and investment fund platforms, saw it recognized as the Outstanding Private Bank: Middle East at the virtual PBI Global Wealth Awards 2021.

Thanks to its corporate and investment banking arms, Mashreq Securities and the Mashreq Capital division at the Dubai International Financial Centre (DIFC), the private bank can easily structure products that cater to the individual and unique needs of its HNWI clients in the UAE or abroad – as one bank. The Private Bank (PB) has conventional and Islamic Sharia options, spanning different asset classes, instruments, and geographies to suit all clients’ needs and the constant demand for highly diversified portfolios. Approximately 50% of clients come from the UAE and the Middle East region, with the rest mainly spread across Asia, Europe, and elsewhere.

The key performance indicators (KPIs) for Mashreq PB during its last full accounts last year, were:
Assets under Management (AuM): US$3.7 billion
Private Bankers: 31
Number of Clients: 1,500
Income fees: US$50 million
Digitally active base: 78%

Prior investments in good technology has led to the impressive digital usage figure among its client base and high digital participation from employees, with numbers rising all the time.

Diversified portfolios are achieved by access to well stocked and diverse product, mutual and investment fund platforms. The latter has over 25 global partners and more than 250 regulatory approved investment fund aggregated offerings via Mashreq’s entire operation, plus customized income portfolio solutions, alongside systematic investment plan (SIP) and execution capabilities across 150,000 funds. It is all backed by Private Bank people and tools designed to tailor solutions to meet clients’ specific needs and wealth goals. The mutual funds platform gives access to a wide array of strategies and structures that meet induvial risk and return preferences.

The Private Bank offers insurance products, wealth structuring and accounts for day-to-day money access. Lending, often via property rental options or trade finance, is also a key offer from the entire organization. It can contribute towards working capital business requirements. Additionally, there is a Lombard lending platform link.

The revamped Mashreq PB Products & Solutions platform offers in-house modelling of portfolios and a diverse array of fixed maturity plans, overdrafts against properties, and alternative structured solutions.

The experience of staff, with 40% of Private Bankers having been there for decades, and strong career development plans in place for the 25% who’ve been there for between two to five years, mean that the human touch is never forgotten either. Certified relationship managers (RMs), foreign exchange (FX) and other specialists ensure a comprehensive and deep service.

The revamped Mashreq PB Products & Solutions platform offers in-house modelling of portfolios and a diverse array of fixed maturity plans, overdrafts against properties, and alternative structured solutions.

Standard Bank believes in training its relationship managers (RMs) and future leaders to deliver the best possible service and even trains its young clients in finance, winning it Best Next-Generation Offering and Outstanding RM Training and Development Program at the virtual PBI Global Wealth Awards 2021. Its efforts mean it was also awarded Outstanding Global Private Bank: Africa and was commended in three other categories (see bullet point at end).

The judging panel at the PBI Awards 2021 commented that it was “an awareness of how advancing your people is the best way to advance your business,” that won Standard Bank its trophy for Outstanding RM Training and Development, “thanks to its its digital and physical training academies, which also span to training its young clients about how best to invest their money.” This client-facing work won it the Best Next-Generation Offering trophy. “Its excellent work on intergenerational wealth preservation and transfer and data-rich technology options deservedly won it the Outstanding Global Private Bank: Africa award as well.”

The advancement of your people represents the advance of your company over the long-term. That is why Standard Bank Wealth and Investment values employee and client relationships so highly. It believes so strongly in intergenerational wealth preservation and transfer that it even financially educates its own young customers, offering them Next Generation Academies, the only wealth manager to do this in Africa, in order to help them ensure they get the most out of their good fortune. It won the Best Next-Generation Offering trophy specifically for its unique efforts delivering:

Junior Leaders Academy: events for the 10–12-year-old offspring of wealthy clients. Teaching them young about the challenges of making, investing, spending, and giving money pays dividends later in life, and aids future loyalty. Parents are of course often a central part of the event too. An example event was guest speaker Kitty Phetla, a Ballerina, addressing the young audience.

Young Leaders Academy: events for 13–17-year-olds teaches Standard Bank’s young wealthy clients about their wealth profile and how they can best navigate their future financial lives. Paul Ballen of Pauls’ Homemade Ice-cream addressed the young leaders.

Future Leaders Academy: for 18–24-year-olds deepens an understanding of how to create, manage and grow wealth. Dinesh Patel, CEO of OrderIn, addressed them.

Standard Bank also hosts Leadership Academy: Thought Leadership events for adults as well, sparking intergenerational debates and digital academies. During the Covid-19 outbreak, for instance, it hosted a webinar with John Sanei of Duke Corporate Education in Johannesburg. He talked about the effects the pandemic is likely to have on the future in South Africa and globally. Another virtual event, held during the pandemic, was the African Wealth Report Launch on 13.

12 August 2020. This shed light on the ‘Art of Creating Wealth’ in Africa and presented research findings across South Africa, Kenya, Nigeria, Ghana and Mauritius.

The bank’s future plan to use data analytics and insights to segment its entire customer base into baby boomers, X, Y, Z and so on – and identify and cater for the needs of each – show that it is developing a whole life strategy for its client base from the cradle to the grave.

Outstanding training leads to an outstanding African PB

Standard Bank Wealth and Investment has its own internal Academy to facilitate staff training for relationship managers (RMs) and others, winning it further trophies for its development program, and ultimately its status as a successful African private bank (PB). It posted 50% growth in new clients last year. Despite Covid-19 challenges and headline earnings suffering, it still saw Assets under Management (AuM) grow 12% to R46,983m.

The internal Academy at the bank is focused on talent mapping and identifying future leaders via the NexGen Manco program, which helps junior and middle managers in their journey into senior management positions. There is a mentoring program and a Journey to Greatness initiative as well for those earmarked for the top.

For RMs starting out there is a lot of help with planning and time management support and a step-by-step guide to best practice behaviors that will improve the quality of their client engagements. A Client Discussion guide is also available covering key topics and discussion points they should be aware of in order to ensure a focused engagement with clients that is packed full of insights. In addition, there is a:

Training Bytes and Knowledge Hub: Daily or weekly bite size learning nuggets are distributed to RMs to ensure they are up to date with internal and market knowledge. They can be saved in a Knowledge Hub.

Digital learning platform: the team has access to various digital libraries and can select the skills they want to focus on, join relevant groups and follow various learning paths, with LinkedIn learning, abstracts, courses, a Harvard Online Learning portal, and many other such tools.

The Perform to Grow online journal: houses RMs development plan, key performance indicators (KPIs) and action plans to ensure they know what to do to progress.

Digitally speaking a new group-wide customer relationship management (CRM) module from Salesforce introduced last year has also been helpful in delivering a single shared view of the client. RMs can pull data from the core banking system to capture client information, identify opportunities, requests for fulfillment and manage email workflows. It has helped increase knowledge and fast client engagement.

The over-arching Challenger model that the bank introduced a few years ago to remodel how it approaches clients brings with it an assumption that insight-rich engagements are the norm, rather than a demonstration of products, as this drives deeper interactions and ultimately better sales. The Challenger concept flows throughout the bank and is evident via:

Challenger Coaching: for everyone to buy into the concept and specific leadership modules to facilitate peer-to-peer learning and help fast track the best performers.

Challenger Portal: provides access to guides, insights, messages, and industry-related topics, to ensure that RMs our engaged with the philosophy. Complex problems can be shared on the portal to crowdsource good responses and upskill everyone.

Standard Bank is confident it will continue to grow due to its focus on client and employee training and support. It is rightly proud of its low staff turnover rate of 7.3% compared to the industry average of 15%, which it thinks further helps educate its clients about how to preserve their wealth, thanks to the experience of the staff. Training them up delivers better loyalty, and ultimately better end results.

Standard Bank were also HC: Highly Commended in the Best Family Office category at the Private Banker International (PBI): Global Wealth Awards 2021, which were held virtually on 8 October, and in the Outstanding Wealth Management Technology Initiative – Front Office and – Back Office categories.

Commenting on their PBI Awards accolades, Sanah Gumede of Standard Bank Wealth & Investment, said: “We are both honoured and humbled by the various recognitions we have attained this year, which bears testament to our ability to adapt in the face of challenging conditions, and to craft holistic solutions that are relevant for our valued clients.”

In this Q&A interview with Masroor Batin, the Head of BNP Paribas’ Wealth Management (WM) Middle East & Africa (MEA) unit in Dubai, UAE, the Indian educated graduate from the University of Calcutta talks about this strategic plan for the bank, and his vision & key interlocking aims to nurture clients, grow and, where appropriate, accelerate digitalization.

Please tell us about yourself, your career & plans for the private bank?

I graduated from the University of Calcutta, India. Before coming to the UAE, I lived and worked in three countries – the US, India and Singapore. Each place had its own lessons for me, experiences and cultural twists. I’ve benefitted from their combined wisdom and strengths. In 2017, I moved from Singapore to Dubai with my wife and son.

In the City State I was formerly the Head of International and non-resident India (NRI) clients for BNP Paribas WM, leading the team there and in Hong Kong. Previously, I worked for Merrill Lynch as their Singapore and Malaysia market head, and I also had three years in India leading their online platform. I’ve also enjoyed 10 years in New York as an NRI market director for Merrill and Citibank.

My plans for BNP Paribas WM Middle East & Africa (MEA) is to build on our long-established position here. We’ve been in the region since the early 1970s demonstrating a long-standing commitment to the economic development of the six nations in the Gulf Cooperation Council (GCC) and to the wider region. The MEA unit now serves more than 900 clients through its 40 experienced bankers located across the UAE, Switzerland, Luxembourg and Saudi Arabia.

Over the next three years, from 2022-2025, I want to see:

New bankers join our platform.
A continued increase in assets.
A strengthening of our client base, especially on-boarding of high-profile clients and families in the NRI and other segments.
Launch new products that meet clients’ needs, such as local shares financing.

But I also want to see digital solutions that offer self-serve options, where wanted, and data analysis, while still retaining the personal touch that clients want. Technology must serve our interactions, not dominate them. The human aspect will always be important, despite the digitalization trend that we undoubtedly must also cater for.

What are the pillars that you intend to use to drive growth?

In the short term, we need to pursue our growth path in a sustainable way, year-after-year, respecting the disruptions caused by the Covid-19 crisis and our longer-term goals. I’m proud of the way my employees still delivered superior client experiences (CX) during the pandemic despite often working from home or facing other challenges. But the outbreak has also strengthened the case for more digital services and internal capabilities. In the coming years, we need to transform in order to grow, accelerate our digital journey, and continue to nurture clients.

The three key pillars I will base this strategic vision on, which is backed by an organizational ambition to become a top five player in the Wealth Management industry, are:

Client engagement & digitalization: every project that we start, every individual strategy that we define must start with the client. We want to make sure that our clients are satisfied and that we provide them with best-in-class services. That is the basic starting point for everything, including the digitalization drive that must not supersede human relationships. Video conferencing, mobile applications and online events can all help, however, particularly during disruptive periods like the Covid-19 outbreak. They’re not a panacea, but they are helpful.

Sustainability & future growth: BNP Paribas is ‘the bank for a changing world’ – and the world is transitioning fast towards a more sustainable economic model. The ecological, socio-economic and energy challenges are immense, as carbon net zero ambitions driven globally by Environmental, Social & Corporate Governance (ESG) policies and investments proliferate across the developed world. Locally, we will need to continue our transformation in order to support our clients in their Corporate Social Responsibility (CSR) journey, be exemplary ourselves, and aware of the context in the region.

People engagement & nurturing skills: People are the most valuable asset. They represent the firm to our clients and are the driving force for our vision and ambitions. We must never forget this. I am very proud of all my teams, and I will make sure in the future to give them a job where they can take decisions, be creative, evolve, grow, and feel committed and rewarded.

Tell us about the base you are building on & BNP Paribas MEA’s performance?

When I first joined BNP Paribas as Head of Wealth Management for the Middle East market in 2017, we launched a very comprehensive and ambitious strategic plan to achieve these results. They have come about by focusing on CX and engagement. Specifically, we implemented:

A new market approach to better serve clients irrespective of the internal organization of BNP Paribas WM.
An upgraded suite of products & services, with digital options, designed to meet the needs of our clients.
A new sales management department. This has improved the way we target, communicate & engage with our clients.

Over my four years in charge of BNP Paribas MEA in Dubai, the key financials have improved. For instance:

Assets under Management (AuM) have on average increased by 12% per year.
The loan book has increased significantly.
Double digit growth is evident in our revenues.

The development of our commercial teams in Dubai and Geneva, Switzerland, continues apace. A dozen new relationship managers (RMs) have been hired.

What are the key strengths of the MEA unit: What are you & the bank overall doing well?

Without doubt, the ‘One Bank’ integrated approach of BNP Paribas is at the heart of our value proposition, alongside our credit and investment offerings. In MEA this means we can leverage the Group’s capabilities to better serve our clients. Our bankers are backed by a team of experts who personalize and adapt BNP Paribas Group’s solutions to serve client’s key life events and any goals they might have, such as pursuing socially responsible investing (SRI) aims.

Technology must serve our interactions, not dominate them

Two divisions are especially appreciated by our MEA Wealth Management clients:

BNP Paribas Real Estate: this offers international expertise to GCC investors who wish to invest in European markets, a key strength for the Group. The team facilitates access to our international network based in 38 countries, providing property development expertize, investment management, transactions, consulting, valuation and property management services.
Najmah: this award-winning Global Islamic Banking Division stuffed full of Islamic banking specialists coordinates with a renowned Sharia Board to structure and market a broad range of Sharia compliant investments and financing solutions.

What challenges remain?

Well, Covid has obviously been a considerable challenge, and we’ve our three crucial pillars that I have already outlined over the longer-term. But on top of this I believe that preparing for the huge imminent generational transfer of wealth is important – and the differing needs of each participant. For instance, baby boomers and millennials will each have different investment behaviours, and each must be catered for as the transfer of wealth happens.

The inheriting generation will expect different services and solutions from wealth managers. Therefore, it is important that banks operating in the wealth management sector prepare adequately for this.

With the rise of technological advancement and digitalization, banks will also need to invest sufficiently in cybersecurity, which only grows in importance as the world digitalizes and shrinks. This naturally creates a more complex regulatory environment. Wealth managers must adapt to regulatory changes in all countries and regions and keep this in their minds as they operate.

Regulators are pushing for tighter control and more transparency. All the regulatory requirements involve the use of advanced technology, so banks will need to continue to invest in strong IT infrastructures.

The Covid-19 pandemic was one of the biggest challenges of recent decades. Clients needed wealth managers, as never before, to navigate the volatility and still deliver results. Julius Baer stepped up to the mark with its work from home (WFH) solutions for staff ensuring constant communication, enhanced digital services for clients, and a tight focus on the markets, and longer-term on sustainability, delivering profits despite the challenges. Consequently, it won the Outstanding Global Private Bank: Global trophy at the virtual PBI Global Wealth Awards 2021 on 8 October.

Julius Baer had more interactions and touchpoints with clients than ever before during the Covid-19 pandemic, but its scalable IT infrastructure and years of investment delivered resilience, while well-trained employees responded knowledgeably to the volatility in the marketplace. Its global presence also helped to maintain contact and services.

When clients do well, so does the firm. It saw operating income rise 7.7% and profits go up by a fifth, while new net money (NNT) it brought in stood at CHF9.9 billion Swiss Francs (US$10.7bn) on 30 June 2021 versus CHF5bn the year before. The inflows show how client trust equates to money coming in.

Julius Baer has an open architecture to give clients access to the best solutions in the market and strong in-house capabilities for investments, credit, structuring and wealth planning. It enhanced its solution set in two keyways in 2020:

Family Office Services: this new unit puts everything under one roof. Key topics such as family purpose, governance, family roadmaps, succession planning and networking are all now in a single comprehensive suite, alongside advisory processes.
Establishing a direct investment team for private investments: the extensive network of the team gave clients easy and quick access to exclusive institutional deal opportunities and the launch of new co-investment vehicles promises much as well in the future. The bank simultaneously grew its secured structured and cashflow-based lending businesses as well.

Technology

Julius Baer activated a raft of home working solutions to help its relationship managers (RMs) and others stay in touch during the Covid-19 emergency and its DiAS digital advisory suite has been particularly helpful. In 2020 it invested CHF90 million (US$97.5m). Much of it was spent on enhancing online procedures and clients’ digital experience. Key initiatives included:

Digital on-boarding of clients in Switzerland via video identification

Electronic e-signature functionality

Two-way online and video chat capabilities. A hybrid interaction model has been built, so that face-to-face options are still there for people that want it and to give flexibility as Covid-19 restrictions ease.
Investments in data intelligence to personalize interactions and optimize pricing have also been made, and money has gone into artificial intelligence (AI) and robotics to help AI-driven processing automation. This is enhancing numerous systems. For example, the Markets Toolbox was introduced 10 years ago offering real-time structuring capabilities in foreign exchange (FX). It has since been applied to other structured products and rolled out in Asia. It is now being augmented with AI and big data analytics to add yet more value to private and institutional clients and evolve its capabilities still further.

Sustainable investment products and solutions are a key focus.

A new modularized Mandate Solution Designer has also been unveiled in the area of discretionary mandates as part of the bank’s investment in technology. It will tailor investments and enhance reporting and transparency capabilities.

Sustainability

Sustainable investment products and solutions are a key focus. Julius Baer is a signatory of the UN principles of responsible investment and its responsible banking principles. A proprietary Impact Investment fund in 2020, focused on the emerging blue ocean economy agenda, also addresses three of the UN Sustainable Development Goals (SDGs) – namely: responsible consumption; climate action; and protecting life below water. Environmental, Social, and Governance (ESG) factors are also now integral to Julius Baer’s investment process, as it seeks to grow the share of its assets invested with explicit ESG integration. It is also supporting training and communities in this area and, as data standards evolve, it will undoubtedly participate in more dedicated reporting in this area as funds increasingly flow into it.

HSBC Global Private Banking (PB) for ultra & high-net worth individuals (U-HNWI) serves clients in North Asia and throughout the area via onshore hubs in mainland China, Hong Kong and Taiwan, plus there are other Asian onshore hubs further afield in Singapore and Thailand. Clients can additionally access HSBC’s worldwide universal banking services, including lending, corporate finance, capital markets in London and globally. Its comprehensive approach and group-wide capabilities won it the Outstanding Global Private Bank: North Asia trophy at the virtual PBI Global Wealth Awards 2021.

The HSBC Group has 4000+ offices in 64 countries, but it never forgets its local offer, and it partners where it is in the best interests of clients wanting to access deals. Dedicated wealth advisory teams in North Asia include relationship managers (RM), investment counsellors (IC), product specialists, credit advisors and wealth planners (WP) in China, Japan and elsewhere, all assigned to serving providing expertise and helping PB clients in the region.

The wealth planning & advisory (WPA) and trust & fiduciary services (TFA) units have served generations of Asian families with a full range of wealth structuring and advisory services, including succession planning, family governance, family office, philanthropy and trust administration.

Despite the Covid-19 pandemic, which necessitated extensive use of its digital platform and its flagship Investment Outlook events going virtual, HSBC Global PB Asia still recorded growth in client assets of 16% and growth in investment revenues of 24% last year. Its aim is to be the biggest wealth manager (WM) for U-HNWIs in Asia over the next five years, with a target of more than 10% compound annual growth rate (CAGR) in revenues and profit before tax (PBT).

Towards this goal it has grown UHNW and its Total Client Position (TCP) revenues respectively by 15% and 7% last year versus 2019 figures. This growth is thanks to a team that offers tailored asset class agnostic solutions and provides differentiated investment ideas, customized hedging solutions and innovative financing alternatives, to cater to its clients’ sophisticated needs. In 2021, the bank unveiled a new Institutional Family Office for family clients, for instance, providing easier access to its Global Banking & Markets (GBM) capabilities to access institutional markets and private deals that once would have been out of reach. Other ways it intends to grow are by:

Leveraging its universal banking model to feed its PB: collaborating with HSBC businesses globally works. Commercial banking and global markets brought in 48% of new net money in 2020 – see example above for how the model works – and enhanced product capabilities allow easy access to finance, asset management tools and so on, while retaining PB advice and skills.

Emphasizing its PB coverage area & Asia International Connectivity Team: extensive Chinese language skills and Asian experience means the connectivity team can connect clients to offices and capabilities in the UK, Switzerland, East / West coats of America and elsewhere around the world, helping them to acquire assets and real estate overseas. For example, in 2020 a UHNWI in Hong Kong was helped to acquire a trophy property asset in London, securing an 8-figure amount of net new money for the business.

Digitalization: Since the second half of 2020, HSBC has accelerated its digitalization delivering many new platform enhancements and upgrades, including: An online trading platform for cash equities.

Real-time transfers between retail and PB accounts.

A digital platform for market update videos and audio conferencing, which was especially useful during the Covid-19 outbreak.
A new portfolio and risk analytics system for our advisory business.

Going forward, HSBC will invest US$100m in the next two years to further enhance its digital platform and advisory engine.

Mashreq Private has won the prestigious accolade of ‘Outstanding Private Bank: Middle East’ at the Private Banker International (PBI) Global Wealth Awards 2022.

To be eligible as a Mashreq Private client, one must maintain relationship greater than USD 1 million. Half of Mashreq Private’s ultra or high net worth individual (U/HNWI) clients hold over AED30m+ (US$8.17m), while 5% possess AED 50m+ (US$13.61m) with diverse geographies around the world: 40% non-resident and 60%residents are in the United Arab Emirates (UAE). A quarter are Western expats, 25% UAE nationals, 25% Arab, and 15% from the Indian sub-continent, with other expats making up the rest.

Additionally, a ‘golden visa’ helpdesk is available to assist clients apply for UAE’s 10-year visa. Further, we also offer accounts in Egypt and the Middle East, offshore options and value-added services w.r.t trust and inheritance, family office and more. The personal touch is invaluable to understand the clientele’s diverse needs and cultures. Mashreq Private has an extensive team of certified relationship managers (RMs), qualified investment and insurance specialists, foreign exchange (FX) specialists and client service managers offering bespoke wealth structuring, planning, legacy planning, and lending, to name a few. Our staff are highly experienced, with 40% of Private Bankers having decades of experience, ensuring human touch is never forgotten.

Technology

At Mashreq we align personal touch with digitally enhanced, easy to access solutions. Mashreq Private has a robust and integrated wealth management platform offering end to end solution for range of Investment products including Equities, Bonds, Mutual Funds, Certificate of Deposits, Structured Products.

This improves relationship manager’s efficacy , ensuring superior customer experience (CX). It also enhances bank’s ability to serve its diverse client base, giving them access from wherever they are in the world. For example, clients can now trade local and international equities across 32 markets and access 150,000 funds via their wealth management (WM) platforms.

The use of open Application Programming Interfaces (APIs) help consolidate multiple systems on the new wealth management platforms providing seamless connectivity and value-added services, such as automated chart provision and enhanced portfolio analytics. Our fintech partners like Comarch and FinIQ are offering improved client interface and portfolio reporting capabilities. While clients who want to keep their investments offshore can now more easily do so via Open IT Architecture investment platforms that connect to trust structures out of Bermuda and Guernsey, aiding long-term wealth transfer and estate planning.

The IT architectural approach adopted at Mashreq Private encourages:

Customer-centric channel design: Built inhouse these are client self operated, mobile & online banking and assisted channels via Relationship managers leveraging SAAS based components, enabling seamless and consistent customer experience across all touchpoints

Cloud Infrastructure: All new applications are setup on flexible, secure and elastic cloud infrastructure enabling innovation through on demand processing power and throughput. Migration of existing applications to cloud in being done in phased approach
DevOps & Microservices architecture: In order to deliver fast and high-quality changes to customer experience channels Mashreq Private has leveraged automated deployment and testing on loosely coupled microservice architecture backed by an API driven integration to enable flexibility and speed

Finally, Thanks to its corporate and investment banking arms, Mashreq Securities and the Mashreq Capital division at the Dubai International Financial Centre (DIFC), Mashreq Private can easily structure products that cater to the individual and unique needs of its HNWI clients present in the UAE and anywhere across the globe – as one bank.

In this Q&A interview with Sanah Gumede, Head of Wealth & Investment, South Africa for High Net Worth (HNW) individuals in Standard Bank’s home market, she discusses the help she provides to aid generational wealth transfer, which has become more challenging as interest rates (IR), inflation and commodities rise in the face of geopolitical volatility. The married mother of two children who loves golf, food and the bush countryside of her native South Africa is convinced getting closer to the client and improving their experience (CX) is always the right response to overcoming any challenges.

Q1. What are your short- and long-term hopes & fears?

A1. Well, personally I obviously want my family to always be safe and happy. Professionally speaking, I worry about wealth leaching away from the HNW individuals and families that I and my team at Standard Bank Wealth and Investment in South Africa (SA), serve. Research has shown that:

70% of generational wealth gets depleted by the second generation;
& 90% is gone by the third generation.

It’s my job to prevent that happening. Succession planning and assistance is vital for HNWIs. My ambition is to partner with clients in creating, managing, and preserving generational wealth by equipping them with the necessary knowledge, structures, and tools. That way you can overcome any challenges.

Q2. How can you protect your clients’ wealth against your fear of it leaching away?

A2. I believe Standard Bank can do that by focusing tightly on the client experience (CX), by understanding their needs and advising them well, in a deep relationship that offers solutions to suit their particular needs. There are always investment and succession options from private market bonds to equities, offshore options, trusts, tax advice and other means of growing, preserving, and transferring wealth but each case is different, so you need to understand what options to select from the toolbox for each client.

At Standard Bank Wealth and Investment SA, the unit I head up, we focus on delighting our clients and delivering superior CX. That is always our aim as I believe it delivers the best results. If you align the people (training and staff), technology (data, context, and presentation) and the strategy for growing and protecting wealth with a laser-like focus on the client’s well-being, then you cannot go wrong.

We are therefore investing in bespoke CX using our people and data to ensure we understand the passions and interests of our clients. We can then curate events aligned to meet their interests and advise them accordingly about relevant strategies.

Q3. What challenges do you face in delivering CX, & indeed from the wider market overall?

A3. Recruitment is always an issue. It is difficult to find the right people with the necessary on and offshore financial services (FS) exposure and experience that we want. They must be able to interact with our profile of client but finding them is not easy as many have gone offshore themselves and not returned. We train people accordingly and are always on the lookout for the right individuals, but it is something we continuously have to monitor to ensure we have the best people in order to deliver the best CX.

We also need to ensure that mobile access and technology solutions that offer self-service and analytics updates are available if the customer wants them, while simultaneously ensuring that deeper data can be got from our IT systems for relationship managers (RMs) to engage clients proactively. This requires flexible IT, which we’ve invested in.

In regard to the wider market and general challenges, well, a more cautious approach to investment is necessary at the moment in light of the severe economic changes that are arising from the present geopolitical turmoil.

Q4. What geopolitical and macroeconomic challenges do you face?

A4. Globally speaking, we have had the Covid-19 pandemic of course impacting supply chains and now there is the war in Ukraine. This is pushing up global energy prices and food and commodities, impacting inflation and therefore interest rates (IR), which are on the rise around the world.

The US Dollar’s (USD) appreciation is also impacting foreign exchange (FX) calculations. The risk environment has fundamentally changed. As always, this presents opportunities as well as threats, but a more cautious approach is valid at the moment.

Rising IR has an impact on disposal investable income from a cost of debt viewpoint as well as a cost of goods perspective, due to the inflationary pressure, so a lot of things are interacting at present. Not to mention the climate change / net zero policy framework, farming impacts and well-being aspects of the environmental, social, and governance (ESG) agenda in mines, factories and elsewhere, which is also altering traditional investment approaches.

We need to be on top of all these things at Standard Bank Wealth and Investment, SA – and we are. We also face local macroeconomic factors such an expanding population that need jobs, and an expanding middle and upper class that need wealth advice. The latter may well face a squeeze in the years ahead, so our advice will be needed more than ever as ultra HNWIs accelerate away and the rest struggle.

I have noticed a worldwide trend recently, in the face of all these pressures, for clients to keep funds received in cash and only gradually phase that capital into equity markets. Where clients’ intention is towards a longer-term equity investment there is understandably no rush on their part to put the majority of their money into equity markets at the moment. Clients are instead spreading their risk around and only drip-feeding money into the equity arena when and if they see long-term opportunities.

Q5. Tell us a bit about yourself: your career progression and personal interests?

A5. I am a seasoned banker and executive with over 17 years in the financial services industry. I worked at Investec Private Bank (PB) and ABSA Wealth in South Africa before joining Standard Bank in 2017 as the Head of Wealth Management for Johannesburg.

I attained my present position as Head of High Net Worth at Standard Bank SA in January 2021. In this role, I am responsible for a team of RMs, loan and fiduciary specialists and wealth managers. Our vision is to be the financial partner of choice for Africa’s HNWIs, managing, growing, and protecting the generational wealth of our clients and their families by offering tailored, integrated solutions, that deliver because we understand the client and have deep intelligent relationships. Superior client experience ultimately delivers superior results.

I started out at Ernst & Young (EY) in January 2001 at the dawn of a new millennium as a junior auditor and was subsequently an analyst at the South African Empowerdex Ratings Agency, before entering the FS sector where I’ve remained ever since.

My experience spans to include private banking, wealth and investment, strategy development, leadership, building networks and client value propositions, plus client relationship management and marketing strategies.

My education begun in Pretoria in South Africa at school and deepened at the University of Kwa-Zulu Natal, Durban, where I graduated in accounting. Additionally, I completed the Global Executive MBA at INSEAD Business School, Fontainebleau France, and I’ve also completed a Finance Executive Development Programme at the London Business School. I am an alumnus of the Institute of International Finance where I was part of the Future Leaders Class of 2019, held in both Shanghai, China, and Washington DC in the US.

I use all this knowledge I’ve obtained in the service of our clients, and in overcoming the challenges I’ve outlined from war to climate change, to changing demographics and technology. Change is constant. Customer excellence must be too.

In this Q&A interview with Fernando Beyruti, Head Global, at Itaú Private Bank, he discusses its results and plans to change technologically, via increased reliance on cloud computing and data analytics, and culturally via better positioning and digital tools for clients, and a new business model with five key pillars.

Q1. Briefly provide an overview of your year & company’s status: financially and in the marketplace?

A1. Itaú Private Bank is the largest PB in Brazil and top three in Latin America. We have managed the volatile market in the first half of the year well, mitigating risk and spotting opportunities for clients as we responded to economic changes wrought by the socioeconomic crisis in Latin America, the war in Ukraine and on-going Covid lockdowns in China adversely impacting supply chains and oil, gas and commodity prices, causing inflation, rising interest rates (IR) and other global impacts. Change is a constant in our industry and volatility can be a virtue if you know how to handle it and have good risk management practices in place. Embracing change can be a good thing.

Itaú Private Bank had a market share of 28% in Brazil at the end H1 2022. Our Assets under Management (AuM) have increased by 17% per year since 2015. Similarly, our revenue increased by 14% per year in the same period. Net income grew by 21% year-on-year (YoY) over the last six years, for an annual growth rate of 19%.

Itaú PB’s results testify to our strength and ability to adapt to change in the financial market, in the global economy, and to long-term wealth management (WM) trends, such as the concentration of money in ultra and high net worth (U / HNW) individuals and families.

Responding to change whether it is market or technology-driven is in our DNA, as is maintaining the quality, training and dedication of our team to deliver a good return and customer experience (CX) to clients. Culturally, we’re changing too in regard to how we position ourselves geographic and in niche markets like Agro, and Tech, which is important sectors in Brazil – to get the best out of them.

Q2. Tell us about your cultural & other changes that are underway?

A2. The aim is always to get close to the customer, cooperate with Itaú specialist teams and its retail banking arm to feed the ascending value chain, corporate, trading and other units of the bank to give the most effective CX in the most efficient manner. For instance, that means using the digital self-service tools developed by Itaú in a suitably amended from to improve CX and meet customer demands for instant data and analytics that is available 24×7. This also frees up relationship manager’s (RM) time to do more value-adding tasks, especially if they too have access to better, faster automated data flows.

We want to offer an integrated product with added value that will last for generations, so that means serving our core Latin American (LatAm) constituency locally but also globally, reflecting their propensity to travel and live abroad. Our offshore, position in major global financial centres, and private market capabilities round out Itaú PB’s offering, alongside our wealth planning, succession and other such services.

We can pivot to meet national economic advances or retreats and allocate resources accordingly. The same is true as the marketplace pivots towards using sustainability metrics in its investment platforms. A nimble, mobile workforce and flexible IT infrastructure means you can meet whatever challenges are thrown your way.

That is why we are conducting detailed studies of each region we operate in, analysing the market, competition, service provision and asset growth options – which may not be the same as before, as some clients increasingly want to specify environmental, social, and governance (ESG) parameters into their portfolios. Asset growth v quality longer-term growth is becoming a factor for some. Geopolitics are changing global economic interactions as well from Ukraine and Europe to Asia and beyond, so you need to be aware of the differing economic and investment impacts. New hiring drives will result from our research as we target growth wherever we find it.

Q3. Tell us about your business model changes?

A3. To respond to the challenges I’ve already outlined, we at Itaú PB are constantly improving our business model to ensure a long-term profitable future for us and our clients, who we obviously want to keep deeply engaged with us. It is based on five pillars:

1. Wealth planning: UHNW wealth concentrates the need to perpetuate clients’ legacies for future generations. The wealth planning team provides holistic advice that is tailored to the needs and characteristics of each family group. They will be a key part of Itaú PB’s future growth.
2. ESG investments: Environmental, social, and governance (ESG) themes are increasingly prominent for our clients and therefore on Itaú’s agenda as well. We have developed a platform with more than 145 ESG products, in various asset classes. This meets client’s wishes, as well making us prepared for more climate change-induced carbon offset schemes and demands for social well-being via the UN’s 17 Sustainable Development Goals (SDGs) and other such mechanisms.
3. Tailored solutions based on a structured investment process: Investment processes must move through well-defined stages that are aligned with client needs and objectives. This allows our team to continuously review and update the investment strategy and tailor products to each client’s need. Our renewed focus here will deepen and strengthen our relationship with clients and drive further growth.
4. Consistent results with a long-term vision: To cultivate long-term relationships, one must approach investing from a long-term perspective as well. This is particularly true for family office relationships, a key growth area, so we are re-designing our reward metrics, training and cultural emphasis to emphasise a long-term focus for big consistent rewards. Succession planning, real estate, private markets and so forth are all important in sustaining wealth in volatile times as well.
5. A ‘one-stop shop’ with a wide open platform: Flexible IT systems and a partnership approach gives clients’ an open investment platform powered by application programming interfaces (API) data exchange mechanisms that provide access to a multitude of investment products from all the best houses in the market. There is also expert curation and support from advisors and Itaú PB’s consolidated financial services platform – including Itaú BBA, Itaú Asset Management and other arms of the universal bank – ensure convenient, easy IT access and service provision.

Q4. Tell us about your new technology stance?

A4. Itaú Private Bank has been given a sizable budget this year to develop a better digital platform for its clients and staff. We will be able to repurpose and reuse some of their self-service and analytic tools to help clients and RMs access more granular data instantly 24×7. These self-serve tools will also simplify our team’s day-to-day responsibilities, freeing up more time for them to attend to important estate-planning work without compromising the efficiency and personal touch we are known for.

The new Ion Itaú investment app is an example of what we want to achieve. Using Ion Itaú, customers can follow market news, view their investment and profitability history, and even invest in variable income assets, as if they were at a home brokerage. To increase CX convenience, the app will also consolidate information from multiple accounts and brokers, not just Itaú PB accounts, thanks to the use of open APIs. This means clients can keep track of all their investments in one place. More features are being added all the time.

Our IT platforms are currently being reconfigured for cloud computing, which is the most appropriate IT hosting infrastructure for the entrepreneurial approach that we culturally want to institute at the bank. The cloud can scale computing power up and down to meet demand efficiently and allows easier data mining, as it overcomes legacy IT siloes that could previously trap information behind departmental borders. New digital tools can be more easily and quickly added as well, especially in the open API-enabled era that we are entering where data exchange and orchestration is becoming ever more important.

Good data management and mastery leads to good data analytics and presentation, which is another key focus for us as it can help identify opportunities in a timely manner and target offers and invitations appropriately, especially if artificial intelligence (AI) data crunching tools and automation are used. Itaú PB has developed models and new data tools to ensure it can enhance CX and information flows for RMs, helping them deliver more:

Personalisation of services.
Identification of potential customers.
Anticipation of client issues and opportunities & quick responsiveness.

This cloud-enabled data-centric approach to its future, combined with its cultural overhaul mean that Itaú Private Bank is undergoing profound change – and is ready to meet the challenges of the future.