Private Banking MENA survey results
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Private Banking MENA survey results

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Private Banking MENA survey results Private Banking MENA survey results Document Transcript

  • Private Banking MENA survey results Introduction In continuation of its pioneering tradition, Terrapinn recently launched its Private Banking MENA survey in anticipation of its 2nd annual event, Private Banking MENA 2007. We received an enormous response from private and retail banks, family offices, asset managers, investment banks, IFAs, brokers, etc., whose answers are summarised below. Who responded? Private Banks based in MENA 8% MENA Saving and Retail Banks 5% Private Banks based in Western Europe 14% Family Offices 4% Investment Management Companies 29% Investment Banks 15% Independent Financial Advisors 4% Brokerage Firms 4% Law Firms 17% Other Private & Retail Banks and Family Offices Summary (please see full results below) • In total, institutions that deal directly with the investment needs of high net worth individuals represented almost a third of total respondents (31%). • Of the 40% who said they currently do not operate in the region 50% stated that they are planning to enter the MENA markets in the next two years. • High net worth individuals are clearly the main market segment most private banks provide services to and this trend will continue into the future. Over 54% of respondents considered HNWI clients their primary market However, today’s mass affluent and even retail clients are seen by many as the HNWIs of tomorrow; a quarter of all respondents have stated that the mass affluent and retail segment (combined) will experience the highest growth in the next two years. • In terms of market entry strategies, the general consensus is that setting up a representative office in the region is the best way to establish presence in the region (58%). The remaining votes are equally divided between ‘suitcase banking’, developing agent networks and acquiring a local bank. • Quality of service was identified by 50% of respondents as the single biggest challenge to the development of private banking in the region. Interestingly, cultural and psychological aspects have been named as one of the biggest barriers to the development of private banking in the region (29%), along with legal issues (33%). • Based on the perceived challenges, it is no surprise that quality and flexibility of services are undoubtedly seen as a key success factor; 37% felt that this was more important than investment performance, range of investment products and the banks reputation.
  • • In this context it is not surprising that 43% of respondents have identified educating and training relationship managers as a business area in most need of further improvement. • Structured products are predicted to enjoy the highest growth in clients’ demand (35%) above investment funds (21%) and hedge funds (18%) Are you active in any of the MENA countries at the moment? Yes 61% No 39% Are you planning to enter the MENA markets in the next two years? Yes 70% No 30% Which MENA countries are you currently present in? Bahrain 31% Egypt 3% Jordan 12% Kuwait 19% Lebenon 12% Qatar 12% Saudi Arabia 19% Turkey 12% United Arab Emirates. 65% Where do you see most growth in private wealth over the next few years? Bahrain 17% Egypt 29% Jordan 8% Kuwait 29% Lebenon 4% Qatar 54% Saudi Arabia 58% Turkey 25% United Arab Emirates. 67% What type of services are you currently offering to your clients? Onshore 16% Offshore 28% Both 56% In terms of market segmentation, which category does the majority of your clients fall into? Ultra high net worth individuals 22% High net worth individuals 54% Mass affluent 12% Retail 12% Other 3% Which market segment in your opinion will experience the highest growth in the next two years?
  • Ultra high net worth individuals 12% High net worth individuals 56% Mass affluent 16% Retail 12% Other (please specify) 4% What in your opinion is the best way to access the MENA markets? Managing your activities from the head office/ European office 12% Setting up a representative office in the region 58% Developing agent networks 24% Acquiring a local bank 6% What are the main barriers to the development of the private banking business in the region? Legal framework 33% Taxation 0% Cultural/psychological aspects 29% Cross-border issues 17% Fees/service pricing 17% Custody 4% Quality of service 50% Back office operations 0% Other 20% (Finding qualified personnel) What do you see as the single key factor for succeeding in this region? Quality and flexibility of services 38% Branding/bank's reputation 8% Investment performance 21% Range of investment products 25% Other 8% Where do you see the highest growth in your clients' demand? Islamic products 22% Total return products / strategies 39% Tax optimization 4% Succession planning 4% Comprehensive range of services 13% Large variety of products 13% Other 5% What is the most popular product amongst your clients at present? Cash accounts 4% Islamic 0% Investment funds (equity, fixed income, etc.) 22% Hedge funds 18% Structured products 35% Real estate 13% Commodities 0% Private equity 8% Art 0% Which area of your business is in most need of further improvement?
  • Open architecture 10% Lifestyle management services 10% Better educated and trained relationship managers 42% Efficient metrics to measure customer satisfaction 14% Employee retention 14% IT functionality 10% Other 4% (Product platforms) Product & Services Providers (Asset Managers, Investment Banks, Brokers, Law Firms, etc.) Summary (please see full results below) • Of those who responded to the survey, the majority (43.7%) named institutional investors as their main client base while private and retail banks based in the MENA region constitute a pronounced minority at present (9% and 4% respectively). • Their presence in the MENA markets follows a similar pattern to that of private and retail banks: over a half of all respondents are currently active in the region. Yet again, UAE is in the lead as the most popular destination at present and is likely to remain the key target market over the next few years. • With regard to market segmentation, the majority of product and services providers also see high net worth individuals as top growth segment while their confidence in the growth potential of mass affluent is higher even than that of private and retail banks. • Their perception of major challenges is more comparable and also includes quality of service, cultural and psychological aspects and legal framework, although there is less emphasis on service than among private banks. • The banks reputation, range of investments and ability to provide Islamic products found equal footing as key success factors for the region, each being cited by 1/3 of respondents. • Islamic products were also cited by 33% of respondents as being most in demand by clients and the product area likely to see the most growth in the next few years. Who are your main clients at present? Private Banks based in MENA 9% Private Banks based in Western Europe 16% Retail Banks based in MENA 4% Family Offices 4% Institutional investors 44% Other 23% (HNWI, UHNWI, private investors) Are you active in any of the MENA countries at the moment? Yes 66% No 34% Which MENA countries are you currently present in? Bahrain 33% Egypt 0% Jordan 33%
  • Kuwait 33% Lebenon 0% Qatar 0% Saudi Arabia 33% Turkey 0% United Arab Emirates. 67% Where do you see most growth in private wealth over the next few years? Bahrain 0% Egypt 50% Jordan 0% Kuwait 0% Lebenon 50% Qatar 50% Saudi Arabia 100% Turkey 0% United Arab Emirates. 0% Which market segment in your opinion will experience the highest growth in the next two years? Ultra high net worth individuals 0% High net worth individuals 66% Mass affluent 34% Retail 0% What are the main barriers to the development of the private banking business in the region? Legal framework 33% Taxation 0% Cultural/psychological aspects 67% Cross-border issues 0% Product pricing 0% Custody 0% Quality of service 33% Back office operations 0% What do you see as the single key factor which would help you to succeed in the MENA private banking markets? Islamic products 33% Branding / bank reputation 33% Range of investment products 33% What are the most popular products/services amongst your MENA clients at present? Islamic products 33% Total return products/ strategies 33% Comprehensive range of services 33%
  • Want to know more? 2nd annual Private Banking MENA 2007 is the most authoritative and up-to-date source of information on the developments in the burgeoning markets of MENA private wealth. It is your best opportunity to… • discover how the MENA markets are growing and behaving • learn how legislative and regulatory issues vary from country to country • understand how to acquire and retain HNWI clients in the region • meet all the major players under one roof and find out what their business models are In 2006, we welcomed over 100 participants to the inaugural conference. We expect that everyone with an interest in benefiting from these exciting market opportunities will attend in 2007. And you?.. Click here to find out more about Private Banking MENA 2007 or visit http://www.terrapinn.com/2007/me