Wealth Management in Asia - Webinar


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The burgeoning onshore wealth management industry has its own unique set of challenges and positioning but it is becoming increasingly attractive for banks with the rising wealth of Asian consumers.
Since many of these domestic banks are still in an investment mode, cost-to-income ratios in the industry are steadily increasing. Intensifying competition from domestic and foreign players over more careful and knowledgeable clients and the recent increase of regulatory requirements and administrative work present real challenges in scaling up.
Questions will thus arise - how can onshore wealth managers scale up their business effectively and efficiently without incurring the significant costs of their more mature peers? Which operational investment should be given priority within a finite budget – back-office, front-end, staffing or product manufacturing?
These issues and more will be discussed in the webinar on Scaling Up Your Wealth Management Business organized by Private Banker International and Sopra Banking Software based on research that has taken place around the region and globally.

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  • Here we collected ten key trends we see in wealth manangement in emerging Asia today.Some of them are not surprising, nor new, while others need some explanation. 1-4 are rather wellknown.Digitalisation : customer is changing, global and mobile lifestyle, seeks convinience, is in the driver seat. Commoditisation: Traditionally products were a differentiator in the PB competition, as well as from other segments. Today most products are available in all banks, and products have cascaded down to lower segments. Similarly efficient execution has become a standard, not a differentiator.Quality of advice: given this lack of differentiation, the quality of advice is becoming more important. So banks are trying to compete on the quality of advice. This involves training, certification, but eventually may also result in a shift away from transaction fees towards advisory fees.
  • These challenges stand against the rough numbers indicating the huge potential. Here we mapped out the lower end of the wealth spectrum, meaning retail customers, mass affluent, affluent and HNW. I added singapore for comparism, however one needs to differentiate that the affluent segment in singapore would only start at >100,000 while in emerging Asia it starts much lower. What also is clear is the correlation between econmic maturity and the growing affluence. On the left side in terms of absolute numbers, and clearly Indonesia far ahead of the rest with a market potential 25m mass affluent and 2m affluent. On the right hand side, we drew the relative numbers, indicating that the upside potential is the highest in Thailand and the Philippines, where still on 11 and 13 % of the adult population fall into the affluent wealth band. Clearly Malaysia is a good step ahead of the other emerging markets, where already 36% of the adult population fall into the affluent segment.
  • Banks are still in the dominant position to provide financial advice to affluent customersWhen you look to singapore customers are far more open to move towards independent advisors and online trading facilities, than in emerging Asia.. A reason for that may be the maturity of the market, and also customer expectations. I think today Singaporeans have gained the reputation that they are hard to please and expect a lot of value for their money. Therefore we see this shift away from private banks and towards independent financial advisors. You see online investment is on the rise and every fourth customer uses it. There are a lot of platforms mushrooming from trading equities, etfs, forex, etc, which are increasingly a competition to the banks. One reason is their convenience, as they are geared to internet and mobile, second of course the pricing. And they fit the need of the customer of self directed investments. Many start already in the retail segment, and keep their accounts while they progress upwards.When you look at emerging Asia, you see quite clearly the trend towards brokerages, which is caused by regulation limiting the banks, as well as to online platforms. Everyone knowing traffic in Bangkok and the affinity of Thais for online will not be surprised by that.In Indonesia, banks are still the main provider of banking and investment services. Non bank players, still are limited in penetrating the market, but I think one of the key reason for this is the focus of the affluent segment rather on core banking products, such as deposits and credit. Although equities have surged in the last years, it still constitutes a rather small part of the affluent business.Malaysian, again a bit further in it’s development, have matured further and demand more from banks and private banks, than those can deliver. Therefore a bigger share is turning to financial advisors.
  • Segmenting customers according to their wealth only provides a limited picture of the customer and neglects the individual’s needs and interests. “Multivariate segmentation” approaches which identify client groups based on client’s needs, behaviours, service preferences, professional attributes are more suitable to underpin best practice product and service delivery.
  • Private banker is not an easy job today.In times of high market volatility, increasingly complex but commoditisedproducts and severe consequences for bad advice not only cause customer attrition but also reputational damage; UBS consolidated experts from the investment bank, asset management and wealth management in a single unit called Investment Products and Services (IPS) responsible for product manufacturing. The IPS works closely with the bank’s chief investment office. The CIO office communicates a consolidated “house view” on appropriate investment allocations and strategies across the global wealth management organization, especially to client advisors and product managers.
  • We have seen a lot of activity to deal with the increasing regulatory requierements.A key theme seems to be to move many tasks more towards the frontline, but build the systems around it to manage it more efficiently.Frontline systems tap directly into various core systems to check Suitability, Risk profiling and exposure, provide the RM with a to do list of what KYC is required when onboarding new clients, or to update the profiles of existing customers. This also includes red flags for alerts if there are positives in terms of AML or CFT etc. Today there is no way around regulatary compliance. Those who do, will get caught and penalised heavily. So those banks who react proactively, going further than what is required, may be at an advantage in the long run. Dealing with regulation more efficiently unfortunately has become a differentiator in the competition, but eventually everyone sits in the same boat and one black sheep has an impact on the entire industry. Hence private banks need to work together to create common standards, code of conduct, and sanction those who do not adapt
  • How do you manage my money? How do you manage risk? Can you provide a banking experience that makes me feel good, that is simple and that is transparent? How can I reach my banker through a channel that is convenient to me? All these are not really unrealistic demands. Private banks need to align their technology priorities with what their customers need“Ask your RMs, what it is like to come to office the morning after a bad day in the financial markets. They are already wondering how many clients they need to talk to or how compliance or risk will make their day miserable. Wouldn’t it be better if technology could be used to do exactly this? When the RM comes to work, the system already flags those customers that are coming close to their target asset allocation or whose KYC requirements have expired. Having those capabilities would allow a RM to serve a greater number of clients in a more organised and better way”, says Kalikajaros.
  • Average age of HNWis is getting younger Younger investors – 41% of HNWI are 45 years and youngerYoung Entrepreneurs are contributing 70% of HNWi – up from 51% in 2007High level of mobility & technically SavvyWell informed & Opinionated. Asian investors are more skewed towards controlling and opinion seeking and less inclined to pay for advice. Discretionary portfolios in Asia constitute less than 5% compared to 20% in Europe and 40% in the USNew ways to communicate. The impact of technological advancement and social mediaWhat does this all mean:If Private WM is to take care of the client’s needs from birth through successful career to old age and post death and passing wealth to the next generation. This is a long, long term relationship…… Then banks must consider:Their client management methods. It will have to change to accommodate different modes of communication and multi channel interaction with clients across the generationsOffering a channel mix. eg. Mobile & internet trading platforms for the well informed, opinionated, technically savvy and mobile segment of their Private Wealth segment whilst having face to face meetings and advisory for others.The fact that 41% of HNWI are below 45 years means that the rate of change from the traditional modes to the new ways is going to be extremely important and rate of change –swift. Their Relationship managers. They need keep up with the client and his expectations. He/she also needs to be mobile with up to the minute (on line) client data, market analysis, news and information at his finger tips – it’s is already being a growing client expectationNow consider how it impacts Your Bank’s service delivery……
  • You only have to look at the newspaper to see government tightening cross border taxation, disclosures and reporting standards. On 12th June, EU tax chief, Mr.AlgirasSemeta has outlined proposals for wider bank data swaps. On 29th May 2013, Singapore (he Ministry of Finance (MOF), the Inland Revenue Authority of Singapore (IRAS) and the Monetary Authority of Singapore (MAS)) signed the OECD Convention on Mutual Administrative Assistance in Tax Matters which includes: (i) exchange of information (ranging from the exchange of information on request to automatic or spontaneous exchange), (ii) mutual assistance in recovery in another State, (iii) joint investigations and (iv) investigations abroad.Singapore will also implement:Extend Exchange of Information assistance  in tax related treatiesObtain bank and trust information from financial institutions without having to seek a Court Order FATCA____________________________________With improving Asian economies and growing affluence in the region, WM banks working with regulatory bodies to break the local regulatory and delivery barrier as mentioned Accenture, New Wealth White paper. Banks and WM institutes are working to increase the talent pool, the products and services offered in an effort to build Onshore WM capabilities.The change is blurring the lines between offshore and onshore businesses. Creating opportunities for WM Banks in the region.But how do you compete with service delivery excellence offered by Offshore PB to tap this opportunityMarket Outlook – Better Economies, Improved Product & Services, Improved Regulation & EffortsFor Tax & Regulatory Compliance - Cross-border taxation, Disclosure/reporting standards, Changes in capital and liquidity requirements and FATCAWith these changes, new regulations on investment taxation and transparency are creating complex reporting requirements and lead to increased costs. New capital and liquidity requirements can positively impact profitability if they are leveraged effectively.Financial Crime Prevention - Know your Customers procedures/ anti-money laundering, Risk management systems. This gives bankers the ability to perform customer-due diligence beyond bank branches, which will improve efficiency and transaction costs for clients. It can also be a good competitive advantage. Simplifying these processes to meet compliance requirements and the use of analytics to enforce preventive measures and provide visibility on activities related to un-disclosed transaction benefitting the banks and wealth management institutes.
  • Let’s first look at the person to person cost of servicing clients.Here is a Gartner Chart of Client Servicing and Person to Person profitability.The profitability at High Net Worth & Ultra High net worth makes it worthwhile for person to person eventhough the client service requirement is high.Take a look at the Mass Affluent thru to the Emerging Wealthy. These segments are typical larger in numbers. They too have high expectations and servicing needs but bring considerably less per client revenue to the bank.The gap between Client Servicing requirement and profitability is biggest here. Yet this segment is a growing segment with huge potential. Clients are known to the bank. There is less competition from Offshore PB. The question is how do you bridge that gap. Either the bank start charging higher for its services or lowering its costs via automating the delivery of its services and streamlining operations. I go back to my earlier point, that a channel mix is required going forward in this business to accommodate both traditional and modern clientele.Since it is necessary to do so to know and serve your client and automation is required to lower cost of service then it makes sense to conceptualizing your products and services for STP (wherever possible).
  • Many banks are organization centric and have siloed systems making it difficult to understand how the client really is or what the clients expects as service par excellence.Take a look at this….look familiar?If then, look at Client centricity and aligning the technology priorities with client needs. Today many banks’ ideas on customer-centricity and know your customer and service delivery are based on an “inside –Out” approach. Here I mean, what products services do I have to sell to my client. For example, using the client data, an event and bank’s product and you get this……….It was put on Facebook immediately….followed by comments I don’t think the bank would appreciate for its customer –centric efforts.
  • In my interactions with many different banks in various countries around this region, this is a typical scenario:The RM engages his clients. Occasionally, There is equipped with a front office CRM type system typically known as an RM dashboard. There is a backoffice or ledger system that completed deals are processed.Meantime, the bank has to deal with other internal department and their systems such as :Consumer Banking’s Deposit systems for Cash accountingTreasury for Fixed Income productsTrust for Fiduciary serviceLoans for leverage products and collateral managementThen there are external product providers to deal with such asExternal Asset Managers for Unit Trust and mutual fundsStock Brokers for EquitiesInsurance CompaniesLeaving a very stressed Client Support and operations team:The operational workflows are impacted by manual and semi manual processes (due to sub-systems)Client Management – SettlementLeading to Inefficiencies………Compliance & RiskIf PWM is a lifelong and beyond business, the value of Trust is very important.The above affects damages the relationship, breaks the trust and destroys your brand
  • We had done a survey with VRL for banks from 3 countries – Indonesia, Philippines and Malaysia. This result shows the top 3 common issues that customer, management, heads of dept and the overall bank faces.
  • Looking back at this earlier slide, and end to end solution which is the centerpiece that works with and orchestrates the Internal Product Providers as well as External Product Providers. Linked to Markets, Custodian, Rates Providers .For your RM, PMs, BackOffice Staff and even a direct access for your customer to see his portfolio and trade.
  • Wealth Management in Asia - Webinar

    1. 1. 1 1 www.vrlfinancialnews.com www.timetric.com 1 Targeting the Private Banking Sweet Spot
    2. 2. 2 2 www.vrlfinancialnews.com www.timetric.com 2 22 www.vrlfinancialnews.com www.timetric.com VRL turns Timetric • Editorial Excellence • Private Banking • Retail Banking • Cards & Payments • Leading Wealth Summit in Asia • News updates on the latest developments in the industry • In-depth research reports • Leading provider of online data, analysis and advisory services • Data & analysis includes: • Risk assessments, • Forecasts, • Industry analysis, • Market intelligence, • News and comments • Consulting
    3. 3. - 3 - About Us 70 Countries 500+ Customers 1500 Skilled Experts 40 Years of Experience SOPRA BANKING SOFTWARE – Fast Facts Sopra Banking Software is a world leader in banking software. The company was born in 2012 as the merger of „Sopra Group‟s banking software unit‟, „Callataÿ & Wouters‟ and „Delta Informatique‟. Sopra Banking Software‟s comprehensive product range, offers an end-to-end coverage of bank operations and aims to help financial institutions become faster, leaner and more efficient.
    4. 4. 4 4 www.vrlfinancialnews.com www.timetric.com 4 44 www.vrlfinancialnews.com www.timetric.com About me Recent features on WM (available on PBI and BPA) • Taking the pain out of paperwork • Private banking 2022 – Moving towards an advisory fees • Changing investment paradigms • Changing skill profiles for private bankers • “Plug and pray” – Confessions of a technology vendor • 15 tips to build a successful private banking business • Outsourcing in private banking – a natural evolution • Empowering the relationship manager in the frontline Recent research papers on WM: • Changing business models in PB • Evolving business models in Asian Wealth Management • Empowering the relationship manager in the frontline Thomas Zink Associate editor/ content manager VRL Timetric Thomas.Zink@sg.timetric.com +65 8272 3169
    5. 5. 5 5 www.vrlfinancialnews.com www.timetric.com 5 55 www.vrlfinancialnews.com www.timetric.com Top 10 Asian Affluent Wealth Trends 1. Competition – New banking players (domestic and foreign) and non-bank players 2. Onshore wealth – following liberalisation and political stability in emerging Asia 3. Customer stickiness - Asian clients are multibanked and price sensitive. 4. Cost and efficiency – Compliance is a key driver of growing cost-to-income ratios 5. Digitalisation - Clients are mobile and demand improved relationship manager (RM) availability, multi-channel banking, real-time information. 6. Commoditisation - Products are cascading downwards from private banking (PB) to affluent banking (AB) and retail banking (RB). 7. Quality of advice – Mature players try to position themselves as „trusted advisor‟ 8. Frontline productivity tools – Improve RM efficiency, harmonising advice and minimise compliance risk 9. Client ownership - Banks seek to seize control of client relationships from RM by improving management of customer information, tracking discussions, and team work 10. Value proposition - Wealth management in emerging Asia has to shift from red carpet banking towards a customer-centric private banking value proposition
    6. 6. 6 6 www.vrlfinancialnews.com www.timetric.com 6 66 www.vrlfinancialnews.com www.timetric.com Key challenges in addressing the affluent segment in emerging Asia Lacking value proposition • Little differentiation between PB and AB – mostly in form of red carpet proposition competing on pricing, rewards, and vanilla services • Limited product availability due to regulatory constraints. Retail products dominate. • Lack of sophisticated services, such as succession planning, financial planning, tax optimisation, trust and fiduciary, philanthropy. • Product-push mentality driven by remuneration and incentive structure focussed on commissions, and product sales, new net money. Little focus on other KPIs. • Focus on execution-only with generic advice. Banks are loosing the advisory and discretionary business to family offices, independent financial advisors (IFA), foreign banks Human resources • Small talent pool, usually lacking experience, international certifications. • Poaching is a common method to acquire new customers. Clients • Most HNW wealth moved offshore to SG and HK for asset diversification and illicit reasons. • Low investor education and focus on equity trading, term deposits and mutual funds. • Short-term, tactical investments. Asset allocation models are not deployed.
    7. 7. 7 7 www.vrlfinancialnews.com www.timetric.com 7 77 www.vrlfinancialnews.com www.timetric.com The lower end of wealth spectrum 10 12 16 33 32 0.6 0.7 1.2 3.2 43 0% 20% 40% 60% 80% 100% Adultsin% <10000 10000-100000 100000-1m >1m Distribution of adults wealth range (USD) Source: Credit Suisse Global Wealth Databook 25.5 6.6 4.9 6.0 1.2 1.9 0.4 0.3 0.6 1.7 0 20 40 60 80 100 120 140 160 180 Adultsinmillions
    8. 8. 8 8 www.vrlfinancialnews.com www.timetric.com 8 88 www.vrlfinancialnews.com www.timetric.com Affluent banking in Asia Pacific- A largely untouched territory Banking penetration • Penetration of managed products in Asia‟s middle class stands at 5% of total financial assets on average compared with 15% in western countries. (Fitch) • Less than 50% of the mass affluent formally manage their finances (budgeting, long-term planning or financial advisers. (Council of Financial Competition) • Over 75% of the investment decisions are self- directed. (Scorpio)
    9. 9. 9 9 www.vrlfinancialnews.com www.timetric.com 9 99 www.vrlfinancialnews.com www.timetric.com Banks still dominate the provision of financial advice to the affluent Have you set up a relationship with any of the following types of firm? Source: Scorpio Partnership: Future Priority Report (2012)
    10. 10. 10 10 www.vrlfinancialnews.com www.timetric.com 10 1010 www.vrlfinancialnews.com www.timetric.com Liberalisation and regulatory change Product availability • Indonesia: new products such as REITs, ETFs and index funds • Thailand: Opening to foreign products through Asean Trading Link • Philippines: Relaxation of REIT and ETF rules for domestic funds, new cross-selling guidelines Investor protection: Differentiation between retail and non-retail • Indonesia: Prudential Principles Regulation (2010) differentiation of investor sophistication. Other features include KYC principles and product suitability • Philippines: Dispense the submission of product by product documentary requirements Consolidation of regulatory supervision • Indonesia: Merge of regulatory bodies into a new super authority – FSA. Protectionism: • Philippines: Raise of caps for foreign share owner ship in domestic corporates. • Indonesia: Introduction of cap on foreign share ownership in banks. • Malaysia plans relaxation of ownership caps for foreign banks Islamic wealth management • Malaysia to enhance disclosure requirements in the Islamic capital market • Malaysia widens access for retail investors to bonds and Sukuks
    11. 11. 11 11 www.vrlfinancialnews.com www.timetric.com 11 1111 www.vrlfinancialnews.com www.timetric.com What makes a sustainable business model? Automation & efficiency Industrialisation of products Digitalisation Team work Profitability management Customer onboarding Communication Relevant research Quality of advice Transparency Sustainability Reduce cost (Re)Build trust Source: Timetric
    12. 12. 12 12 www.vrlfinancialnews.com www.timetric.com 12 1212 www.vrlfinancialnews.com www.timetric.com How to improve quality of advice? • Customer centricity – Custom-made products catering the client‟s needs – Targeted and relevant research • Training – Continuous training and certification of RMs – University degree in private banking? • Teamwork – Generalist and specialists work in a team • Clear KPIs and incentives – Align client interest with RM interest – Include KPIs such as client appraisal • Tools and technology – Frontline tools allowing the RM to focus on customer, not administration – Alerts, reminders, project planning, task managers and single view of customer – Visualisation and simplification of information (product, KYC, research) – Data analytics and multivariate segmentation
    13. 13. 13 13 www.vrlfinancialnews.com www.timetric.com 13 1313 www.vrlfinancialnews.com www.timetric.com Homogenisation of advice • „Bad advice‟ is a key source of customer attrition and reputational risk – Banks try to homogenise their overall investment strategy to align frontline advice, research and product development. In some banks this can almost be described as the industrialisation of advice and product manufacturing. – This enables fast time-to-market for new products. – Products are customised to customer needs and leveraging synergies across the bank – If advice aligned is aligned with product development and research, the entire bank speaks with a single voice providing a more consistent and reliable client experience. • This increases the quality of advice, shortens the product development process, and accelerates our ability to provide targeted research to customers and increases transparency.
    14. 14. 14 14 www.vrlfinancialnews.com www.timetric.com 14 1414 www.vrlfinancialnews.com www.timetric.com Dealing with increasing regulation efficiently • Moving compliance towards the front-office (systems) – Frontline systems that integrate compliance checks, risk profiling, client suitability, alerts, reminders, and task manager – Standardisation of data entry and KYC – Reducing the administrative hassle for the client and RM within the regulatory framework • Automation and Straight-Through-Processing (STP) – Remove human intervention from the process architecture – Increase frequency and accuracy of reporting and business intelligence (BI) – Standardisation of data across bank, country, globally • Banking in the “Age of the regulator” – There is no way around compliance – Proactive is better than reactive – Develop voluntary, yet progressive industry standards, practices and conducts
    15. 15. 15 15 www.vrlfinancialnews.com www.timetric.com 15 1515 www.vrlfinancialnews.com www.timetric.com Balancing client portfolio transparency with high-level security • Reputational risk, including data breaches is seen as one of the biggest risks in private banking. • Recent incidents of data leaks and cyber attacks on financial organisations have brought tighter risk management to the fore. • Data security threats from mobile and online leaks could increase by 60% for financial firms, but less than half intend to upgrade their investment in security. (E&Y study, 2011) Key issues: • No information from the service is stored on the computer, mobile. • Implement in new encryption techniques, stronger identity and access management controls. • Security needs to be a joint effort between bank, technology provider, regulator and customer. • Deal with the “Bring Your Own Device” challenge
    16. 16. 16 16 www.vrlfinancialnews.com www.timetric.com 16 1616 www.vrlfinancialnews.com www.timetric.com Digitalisation of the „client relationship‟ Customers like digital and demand the convenience of interacting with the bank anytime, real-time and through a channel of their choice • While not all customers may be interested today, the next generation will demand a comprehensive and functionality-rich digital multichannel capability bringing all channels together with: – A common touch & feel and functionalities – Access to the same information for clients, frontline, back office – A real time capability – A consistent experience across all channels – Active and particularly interactive communication • A higher degree of self-service providing access to products, advice and research as well as more efficient frontline technology, will likely maintain or improve service quality despite a growing number of customers per RM.
    17. 17. 17 17 www.vrlfinancialnews.com www.timetric.com 17 1717 www.vrlfinancialnews.com www.timetric.com Aligning technology priorities with customer needs • Most banks‟ spending is influenced by strategic intent and profit-drivers. The client however looks at it from the angle asking how technology benefits him: – How do you manage my money? – How do you manage risk? – Can you provide a banking experience that makes me feel good, that is simple and that is transparent? – How can I reach my banker through a channel that is convenient to me? • Key IT requirements in private banking: – Scalability – Automated regulatory and client reporting, – Proactive advice across all asset classes, – Efficiency and speed through straight-through processing, – Consolidated single view of a customer across business lines, borders and banks. • There is no golden bullet. Banks need to decide their business strategy based on client needs and align the IT strategy. The banks that have made the most significant progress are those that have aligned their business model with their clients‟ needs.
    18. 18. 18 18 www.vrlfinancialnews.com www.timetric.com 18 1818 www.vrlfinancialnews.com www.timetric.com “In a modern PB, everything should be conceptualised for STP” • From product focus to process focus – Straight-through processing – Modularisation, centralisation and decentralisation • Investment gears to the front-end – With regulation a key driver of cost, banks try to increase the efficiency in the frontline, while downsizing middle and back office – Information from the back office are pushed towards the frontline – But the frontend can only be as good as the core system and data available in the back office • Technology put larger banks at an advantage, but with better and more affordable off-the-shelf vendor solutions this gap is narrowing – Larger banks still benefit from synergies across business lines, such as consolidation of operations or shared platforms – IT outsourcing for new entrants and smaller players who do not seek differentiation (eg. platform sharing)
    19. 19. 19 19 www.vrlfinancialnews.com www.timetric.com 19 1919 www.vrlfinancialnews.com www.timetric.com Conclusion 1. Affluent banking in emerging Asia has huge potential and given the pace of these markets is a key building block for the onshore private banking business. 2. Banks in emerging Asia still struggle to build a private banking value proposition that goes beyond red carpet banking. With the liberalisation of regulation and foreign banks entering the landscape, domestic players will have to get moving. 3. Competition will move away from execution and products and move towards quality of advice. 4. Technology will be instrumental to build scale and deal with increasing regulatory requirements and changing customer demands and behaviour.
    20. 20. 20 20 www.vrlfinancialnews.com www.timetric.com 20 Targeting the Private Banking Sweet Spot Thomas Zink Associate Editor and Content Manager VRL Timetric thomas.zink@sg.timetric.com
    21. 21. E X C E L L E N C ED R I V I N G Scaling Up your Wealth Management Business
    22. 22. About Me 22 Anselm de Souza Managing Director for Asia Pac anselm.desouza@soprabanking.com Spoken at: • VRL Wealth Management Round Table – Malaysia, Indonesia • Wealth Management Round Table – Philippines • TOAP Convention – Philippines • Wealth Management Boot Camp – Philippines • Hubbis Wealth Management Forum – Malaysia, Indonesia
    23. 23.  Key Developments in Asian Private Wealth industry  Growth Challenges to the Asian WM Market  A fully integrated front-to-back approach to scaling up the WM business 23 Agenda
    24. 24. Changing Environment in Asia : Demographics Asian entrepreneurs are contributing over 70% of HNWi Well Informed, Opinio nated and Transactional Technically Savvy High level of mobility New ways to communicate and interact with their Relationship Mgrs Younger investors – 41% of HNWI are 45 years and younger
    25. 25. 25 Changing Environment in Asia : Offshore vs Onshore Outlook • Better Economies • Improved Product & Services • Improved Regulation & Efforts Tax & Regulatory Compliance • Cross-border Taxation • Disclosure/ reporting standards • Changes in Capital and liquidity requirements • FATCA Financial Crime Prevention • Know Your Customers procedures/anti- money laundering • Risk management systems
    26. 26.  Key Developments in Asian Private Wealth industry  Growth Challenges to the Asian WM Market  A fully integrated front-to-back approach to scaling up the WM business 26 Agenda
    27. 27. Common challenges in Wealth Management Managing risk? Facing regulatory changes? Knowing and serving my client? Streamlining operations?
    28. 28.  Aligning Technology priorities with client needs  Conceptualising for STP 28 Key Focus for Today
    29. 29. Client Servicing : Person to person vs Automation 29 Source: Gartner
    30. 30. 30 Clients get what they want, how they want it • Identify and tailor segment of clients Client Relationship Officer Call Centre Internet other RetailBanking TRADITIONAL MODEL Organisation-Centric DiscountBrokerage Full-ServiceBrokerage Investment Management PrivateBanking Trustandfiduciary services Trusts Advisory Banking Mutual Funds Products Multi Channels Insurance/ Pensions NEW MODEL Client-Centric Integrated service around Client segments supported by a dedicated access and service approach Clients get what organisations want to sell them Clients get what they want, delivered how they want it and at an acceptable price Result
    31. 31. Typical Situation - 31 - Relationship & Portfolio Managers Deposits Trust Treasury Credits External Providers Systems External Asset Managers Other Product Providers Stock Brokers Internal Dept/ Systems Manual / Semi Manual • Client On Boarding • Order Management • Portfolio Management • Collateral Management • Corporate Action • Settlement • Client • Broker • custodian Inefficiencies Confidentiality Errors Misappropriation Compliance Risk Reputational Risk Back Office / Ledger Systems Client Support Unit & Operations
    32. 32. The Top 3 32 Customers Return of Investments (yield) Better customer reports Secured Transactions Management Increased revenue & margins Improving skill sets of people Managing Compliance & Risk issues PB/WM Head Understanding clients needs Talent Management Fluent Delivery & Operational efficiency Issues Faced Manual processes & Inadequate systems Talent & staffing Adoption of new regulatory and compliance
    33. 33.  Key Developments in Asian private banking industry  Growth Challenges to the Asian WM Market  A fully integrated front-to-back approach to scaling up the WM business 33 Agenda
    34. 34. Wealth Management Drivers and Challenges 34- 34 - Financial Accounting Product and operations management Risk Management Clients and channels Mass Affluent/ High Net Worth Client retention or increase through excellence in service Concentrate on Core Business Product differentiation and short time to market KYC, build client segmentation Aggregated client reporting Product efficiency: processing mass affluent but also individual elite Wide functional coverage Automating processes, movin g processes back into core systems Self-service e- platforms Lower TCO Supporting growth through increasing efficiency Scale costs to activity Growing corporate reporting Growing significance of regulation (FATCA, MiFID , KYC, AML…) Guarantee client confidentiality IT Management Product scaling and incremental approach to additional functions or tools Cope with limited IT Resources Remote access for Wealth Managers COO, Head of Operations CFO Risk Manager Sales Manager, Wealth Manager CIO Clients Main source : PWC - Global Private Banking/Wealth Management Survey 2007: Executive Summary
    35. 35. Wealth Management Solution answers to Drivers and Challenges 35- 35 - Differentiators Best practices on Operational Efficiency & Compliance Financial Accounting Product and operations management Risk Management Clients and channels COO, Head of Operations CFO Risk Manager Clients 360° view of clients assets and operations Multi-channel inquiries and updates by Managers and Clients Flexible solution, configurable for Mass and Individual Comprehensive KYC info Efficiency by flexible Model Portfolio, Autom. Order Alloc., Portfolio Constrains, … Wide multi-functional WM and banking functions Single Input, efficient controls, integrated STP front to back E-channels with customer self servicing Integrated Front to Back Office, to reduce TCO (licenses, interfa ces costs, …) Complete activity and profitability reporting Built-in compliance (business as usual for editor) Segregation of client info access IT Management CIO Sound future- proof IT solution, E-channels for Wealth Managers on front-to-back info Sales Manager, Wealth Manager
    36. 36. - 36 - Right Infrastructure? Private and Wealth Management Systems Maximum process automation Flexibility ReportingClients RegulationTariffs Wide functional coverage Clients, Order Mngt, Accounting, CA Specialized functions Constraints, Alerts, Allocated orders… + Short Time to Market
    37. 37. Solution Overview - 37 - Operations &Customer Servicing Teams Relationship & Portfolio Managers PNB Bank‟s Internal Systems SOPRA BANKING FOR WEALTH MANAGEMENT Portfolios & Assets Management Securities Multiple Order Generation Portfolio Constraints Portfolio Performance Portfolio Reporting Model Portfolio Order Mgt Settlement Platform Custody Corporate Actions Mgt Generic and analytics Compliance reporting Reference Data Risk Mgt Communication Accounting Financial data providers Markets & Exchanges CustodiansAuthorities Deposits Trust Treasury Credits Internal Dept / Systems External Asset Managers Other Product Providers Stock Brokers External Providers / Systems Private Banking Customers
    38. 38. A Wealth Management Solution to Upscale your Business Business solution based on Ready-to-use set of features: Specialised Wealth Management Combined with standard banking Functions Integrated Front to Back High flexibility but quick usability Customer differentiation and Best practices in internal processes
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