World Wealth Management Trends & The Vietnam Market

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Addressing World Wealth Management Trends & The Vietnam Market
Lance Tay
Senior Director, Financial Services Global Business Unit
Ho Chi Minh City, Vietnam
14 October 2010
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VN Wealth Mgt Press Conf-101014-LTay-v03
Bu i g p m t báo chí
Gi i thi u xu hư ng
”Qu n lý tài s n” trên th gi i
và Vi t Nam

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The preceding is intended to outline our general
product direction. It is intended for information
purposes only, and may not be incorporated into any
contract. It is not a commitment to deliver any
material, code, or functionality, and should not be
relied upon in making purchasing decisions.
The development, release, and timing of any
features or functionality described for Oracle’s
products remains at the sole discretion of Oracle.
© 2010 Oracle Corporation – Proprietary and Confidential
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Program Agenda
• Facts & Indicators – Global & Vietnam
• Emerging Trends & Challenges
• Value Drivers for Wealth Management
Firms (Private Banks, Retail Banks,
Insurance Firms, Wealth Managers)
• Oracle Solutions
• Selected Customer Accolades

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Facts & Indicators
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Macro Economic Facts – Wealth Rebound
HNWI Population, 2006-2009*
In Million (CAGR 2006-2008 = -5.0%)
HNWI Wealth Distribution, 2006-2009*
In USD Trillion (CAGR 2006-2008 = -6.2%)
Key Indicators:
• Global HNWI population grew 17.1% in 2009 while wealth raised 18.9% to US$39 Trillion
• North America - HNWI population grew 16.6% and wealth jumped 17.8%
• Europe – HNWI population rose to 12.5% after dropping 14.4% in 2008
• Asia-Pacific – HNWI population rose 25.8% and wealth surged 30.9%
• Latin America – HNWI population grew 8.3%, while wealth jumped 15%
• Middle East – HNWI population and wealth grew by 7.1% and 5.1% respectively
“Global HNWI recovery was generally stronger in emerging and developing nations than
in mature ones”
* Source: World Wealth Report 2010, Figure 1. Capgemini-Merrill Lynch Global Wealth
Management
* Source: World Wealth Report 2010, Figure 2. Capgemini-Merrill Lynch Global Wealth
Management
.10
.10
.10
.10
9.5 10.1 8.6 10.0 37.2 40.7 32.8 39.0
0.9
1.0
0.8
1.0

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Vietnam Perspective – Top 3 Fastest Growing Rich
* Source: Vietnaminvestment.net, VietNamNet Bridge, Vietnam Business News
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Local & Foreign Inst. Rush To Capture Segment
* Source: Nielsen VN_PFMPresentation 2010, Vietnam Business News, IBU Analysis
VN Segment est = 1% of 88m pop. = 900k
SG segment est = 5% of 5m pop. = 250k

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Top Differentiating Factors*
Global Trends – Post Crisis: Gain Customers’ Trust
Emerging Business Model*
* Source: PricewaterhouseCoopers Global Private Banking & Wealth Management Survey 2009
Key Trends:
• Customer Centric Advisory Model –
(Proprietary & Third Party products)
• Comprehensive Financial Planning
• Customized Portfolio Modeling
• Aggregated Reporting
• Commission to Fee based revenue
• Combination of Producer & Distributor led
models
• To protect profitability against
reducing commission based revenues
Key Trends:
• Client Acquisition & Retention is the top
priority of Wealth Management firms
• Qualified CRMs
• High Quality & Trusted advices
• Tailored Services for customer
segments
• Due diligence
• Pricing and performance is not a
primary differentiator
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Global Trends – Technology Perspective
Key Operational Strategies*
Key Trends:
• 66% of COOs plan to offer aggregated client reporting in next two years (consolidated statements)
• Online Client Platforms is a top five operational priority over the next two years
• Information Security, Client Data Protection and Privacy are critical legal and reputational priorities
• 63% of COOs expect to increase their IT spend in the next two years
• 82% of COOs will undertake major core system upgrade, including 36% introduce enterprise wide solutions for their
organizations
• Majority of COOs expect to increase the use of regional and global hubs
* Source: PricewaterhouseCoopers Global Private Banking & Wealth Management Survey 2009

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Emerging Trends &
Challenges
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Emerging Business Approach* - VN FSIs needs to decide
Marketing/Sales/
Advice
Product/Portfo
lio
Management
Operations/
Infrastructure
• Disintegration of Value chain
by segments (eg OCBC)
• Focus on Scale in Lower
Segments
• Specialization in Upper
segments
• Niche Players (eg J.Bear)
• Focus on upper segments
and advice backed sales
• Emphasize on product
platform; No Commission
and No Product push
• Large, Integrated Players (eg
HSBC)
• Team-based sales &
service
• Increased Cross-selling &
cost synergies
• Separate Branding (Upper
segments) to increase
credibility
Approaches
UHNWIUHNWI
HNWIHNWI
AffluentAffluent
SegmentsSegments
Value Chain
Standardization
Customization
Specialization
Strategies
Standardization
Strategies
Depends on
Segment &
Focus of Player
* Source: Booz & Company
“Balancing revenue with cost to serve is driving
Specialization and Standardization Strategies”

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Evolving Advisory Process* - Customer Centric, Granular
Traditional Advisory Process Target Advisory Process
• Simple Checklist-based Client-need analysis
process
• In depth view of Short & Long term goals and
expectations was not captured
• Simple Checklist-based Client-need analysis
process
• In depth view of Short & Long term goals and
expectations was not captured
• Moving beyond simple Investment Portfolio
Strategy
• Ongoing review and refinement of client needs
and objectives, integrating emotional factors
into process
• Moving beyond simple Investment Portfolio
Strategy
• Ongoing review and refinement of client needs
and objectives, integrating emotional factors
into process
• Client’s risk profile was calculated as per the
existing risk models, e.g., conservative, risk-
averse
• Client’s risk profile was calculated as per the
existing risk models, e.g., conservative, risk-
averse
• Portfolio Scenario Analysis
• Simulation of hypothetical/actual historical
events to see effect on portfolio
• Portfolio Scenario Analysis
• Simulation of hypothetical/actual historical
events to see effect on portfolio
• General risk tolerance was the primary driver
for target asset allocation
• General risk tolerance was the primary driver
for target asset allocation
• Multi-Model Asset Allocation for addressing
various types of risks, and goal orientation
• Moving to more diversified and global
allocations
• Multi-Model Asset Allocation for addressing
various types of risks, and goal orientation
• Moving to more diversified and global
allocations
• Products offered based on product risk and not
the client risk
• Products being offered were selected before
analysis of client needs
• Products offered based on product risk and not
the client risk
• Products being offered were selected before
analysis of client needs
• Products innovated toward client goals &
demand
• Product disclosure: Transparent & Simple
• Products innovated toward client goals &
demand
• Product disclosure: Transparent & Simple
• Correlation of asset classes was utilized for
assessing risks and rebalancing portfolios
• Correlation of asset classes was utilized for
assessing risks and rebalancing portfolios
• Multi Models across portfolios
• Continuous risk analysis & active rebalancing
• Clients engaged in revisiting and rebalancing
their portfolios
• Multi Models across portfolios
• Continuous risk analysis & active rebalancing
• Clients engaged in revisiting and rebalancing
their portfolios
• Providing clients with a complete view of their
portfolios has been a challenge and was a
customized service for higher-band client
segment
• Providing clients with a complete view of their
portfolios has been a challenge and was a
customized service for higher-band client
segment
• Risk-Adjusted reporting of Client portfolios
• Regular Portfolio Alerts
• Multi-Channel Integration
• Risk-Adjusted reporting of Client portfolios
• Regular Portfolio Alerts
• Multi-Channel Integration
* Source: World Wealth Report 2010, Figure 15. Capgemini-Merrill Lynch Global Wealth Management
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Business Standpoint
• Trusted Advice
• Segmented Approach
• Customer Centric
• Periodic Review of Clients needs
& Rebalancing
• Multi-model global allocation of
assets
• Risk Analysis
Operations Standpoint
• KYC Compliance
• 360 Degree View of Customer
Wealth
• End to End Aggregated Reporting
• Advisor – Friendly
• Process – Oriented
• Consistency & Scalability
• Client Data Protection & Privacy
CHALLENGES
Business Standpoint
• Comprehensive Financial
Planning
• Parameterizeable Service
Differentiation
• Online client access
• Deviation & Multi Dimensional
Exposure Tracking
• Automatic Portfolio Rebalancing
• Risk Adjusted Reporting
Operations Standpoint
• Proven Integration to document
management system, Product
Processors and Reporting
Systems
• Open Architecture
• User Friendly
• Scalability
• LDAP & database authentication
• 360 Degree view of Customer
Wealth
• Transparent Client Servicing
• Tailored Services to specific
segments
• Increased Advisor Productivity
& Cross Sales Opportunity
• High client touch
• Lower time to market
• Quick Usage Ram-up & Faster
Customer Service
• Increased operational control
• Reduced Total Cost of Ownership
(TCO)
• Lower cost of future upgrade
• Re-use of existing IT assets
• Quick & Easy Deployment
• Future proof technology
Oracle Differentiator
CAPABILITIES VALUE
Challenges – Capabilities – Value Proposition
Key - VN priority

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Oracle Solutions
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Integration with World Class CRM
Financial Advisor Desktop
ORACLE CRM Wealth Management
ORACLE FLEXCUBE Private Banking
Contact
Household
Financial
Plan
Financial
Product
Financial
Account
Financial
Holdings
Portfolio Planning &
Construction
Portfolio Reporting
Portfolio Analysis &
Monitoring
Portfolio Execution
Portfolio
Administration
Portfolio Simulation
ORACLE Application IntegrationArchitecture

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Functional Architecture – Plug & Play
EXTERNALSYSTEMS
Oracle FLEXCUBE Private Banking
Financial
Planning
Order
Origination
Portfolio
Management
Oracle or 3rd
Party Core Banking
Current & Savings
Accounts
Structured
Deposits
Lending
Foreign Exchange Local Payments
Cross Border
Funds TransferSWAPS & FRA’s
Standing
Instruction
Teller Services
Relationship
Pricing
Electronic
Messaging
Nostro
Reconciliation
Securities
(Equities &
Bonds)
CIF
Security – Access
Mgmt
Limits MIS General Ledger
Oracle Business Intelligence Enterprise Edition
Standard Reports OBIEE Reports
360DegreeWealth
Management
ComprehensiveProduct
Processor
EndtoEnd
Reporting
Risk &
Compliance
Customer
Relationsh
ip Mgmt
Product Catalog, Core Maintenances, Reconciliations
Revenue
Mgmt
Biz Perf.
Mgmt
Term Deposits Money Market
Broker
Bloomberg
Custodian
SWIFT
MarketData
Oracle Universal Content Manager
Scanned Customer Documentation & Correspondence – Storage & Retrieval
Document
Management
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Integrated Process Architecture
Customer

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Customer Accolades
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“We are using Oracle FLEXCUBE Private Banking
because it enables us to provide innovative
products and services to our customers in a cost
effective manner.”
William Purdy, Head of IT, Bank of London and the Middle East
What Bank of London and the Middle East Is Saying

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“…gives us the opportunity to address high net
worth individuals comprehensively and provides
us with a competitive edge. The implementation is
in line with Kotak Mahindra Bank's commitment to
offer quality service to customer needs.”
KVS Manian, Group Head Retail Liabilities and Branch Banking, Kotak
Mahindra Bank
What Kotak Mahindra Bank Is Saying
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Lance Tay
Senior Director, Financial Services Global Business Unit
lance.tay@oracle.com
• Lance Tay is the Senior Director for Banking across Asia Pacific in Oracle’s Financial
Services Global Business Unit (FSGBU).
• In this role, Lance is responsible for providing deep domain expertise to Oracle’s
financial services customers across all of Oracle’s applications and technology
products. Lance brings to this role a wealth of experience and valuable insight
gained through over fifteen years of experience working with some of the region’s
largest financial services companies. His domain expertise includes retail banking,
wealth management, and trade finance. Lance has worked with major financial
institutions in Australia, New Zealand, South East Asia, India, China, and S. Korea.
• Lance is considered a retail banking IT strategy thought leader within the financial
services sector and is a regular commentator in leading industry publications. He is
often invited to speak at industry seminars about breakthroughs in banking IT
strategy.
• Prior to joining Oracle, Lance held management positions at The Boston Consulting
Group, Accenture, and Cisco Systems. Lance also worked at Fidelity-NIS, and
Procter & Gamble.
• Lance holds a MBA from Cornell University, and a Bachelor of Science from the
Southern University of New Hampshire. He has also lived in Sydney, Bangkok,
Mumbai, and Geneva.
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