Digital payments surge amid safe distancing measures

Digital payments surge amid safe distancing measures

The coronavirus has totally upended the supply and demand markets. The urgent need for essential products coupled with the fact that governments and regulatory bodies are now discouraging the use of cash, has prompted a swift rise in digital payments. Convenience and security aside, digital payment is now the de facto mode of payment as many e-commerce sites are tightly intertwined with e-payment solutions that make the whole system work.

It is no coincidence that the daily downloads of online grocery delivery apps such as Instacart, Walmart Grocery and Shipt have surged by 218%, 160% and 124%, respectively.

People who are at home for long periods of time need to buy groceries and household essentials more frequently – and they prefer online shopping. Regardless of the level of lockdown being imposed, people tend to avoid visiting brick-and-mortar stores. Shops are taking notice and are rapidly ramping up their online presence as well. Stores that have already started implementing e-commerce solutions are rapidly building scale and capacity to be able to cater to stronger demands.

It is no coincidence that the daily downloads of online grocery delivery apps such as Instacart, Walmart Grocery and Shipt have surged by 218%, 160% and 124%, respectively.

As more consumers continue to stock food and other essentials, the volume of online transactions and digital payments will surge precipitously. In fact, it was revealed that COVID-19 has massively accelerated e-commerce growth to the tune of 77% year-on-year, with a total online spending hitting $82.5 billion in May, according to Adobe report.

“We are seeing signs that online purchasing trends formed during the pandemic may see permanent adoption,” Taylor Schreiner, Director, Adobe Digital Insights, said in a statement.

The future of payments is digital

This observation is consistent with what is happening on the ground. In Singapore, local banks such as OCBC, UOB and DBS are reporting that a significant number of customers have switched to digital banking due to COVID-19.

DBS Bank, Singapore’s biggest bank, noted that more than 100 million digital banking transactions happened this year, compared to the same period in 2019. In addition, digital payments have more than doubled and e-commerce transactions rose by as much as close to 40% in value. It’s interesting to note that there are around 3.3 million Singapore users banking online with DBS and about a quarter of whom are seniors – an indication that the adoption of digital banking cuts across various sectors and demographics in Singapore.

Meanwhile, in China, where digital payments are already in its maturity, COVID-19 may well push the country for the total elimination of cash transactions. In 2008, only 18% of Chinese internet users made online payments. This figure jumped to almost 73% in 2018, which is partly attributed to young people being open to the use of new technologies, according to a recent survey by Deutsche Bank.

Comparatively, China and many Southeast Asian nations have a larger proportion of young populations than Europe and the US. In places such as Japan, Western Europe and the United States, a third of the population still consider cash as a favourite payment method, according to the same survey.

“While we believe cash will stay, the coming decade will see digital payments grow at light speed, leading to the extinction of the plastic card.”

Deutsche Bank’s report, The Future of Payments, neatly summed up where the world is headed when it comes to digital payments: “While we believe cash will stay, the coming decade will see digital payments grow at light speed, leading to the extinction of the plastic card. Over the next five years, we expect mobile payments to comprise two-fifths of in-store purchases in the US, quadruple the current level. Similar growth is expected in other developed countries, however, different countries will see different levels of shrinkage in cash and plastic cards. In emerging markets, the effect could arrive even sooner. Many customers in these countries are transitioning directly from cash to mobile payments without ever owning a plastic card.”

What’s interesting is that even though a significant portion of the population in Western countries still prefer to pay with cash, their preparedness when it comes to digital payments could never be questioned. In the US, digital payments champions such as Paypal, Apple Pay and Google Pay are consistently thriving.

European countries, through its Central banks such as the the Bank of England, the European Central Bank, the Sveriges Riksbank and the Swiss National Bank, together with the Bank for International Settlements (BIS) have initiated assessment of potential cases for central bank digital currencies. These would perform all functions of ‘cash’ and aims to be used by individuals and businesses to make both payments and savings. The task ahead can be daunting and will require enormous effort and commitments from both the governments and private sector organisations involved.

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>> To read more about this story and other exclusive features about the digital banking landscape, download the latest issue of The Digital Banker Magazine HERE.

The Risks and Rewards of Going Cashless in a Digital World

The Risks and Rewards of Going Cashless in a Digital World

Since about 960 AD, when the earliest known paper money began circulating in China, the thought of eliminating cash, in favour of electronic or digital medium, had been inconceivable. Ironically, these days, China is one of the leading countries in the world with the highest volume of cashless transactions. Elsewhere in the world, the cashless revolution is being spurred by fintech firms and online payment platforms such as PayPal, Venmo, Stripe and Square. These corporate giants have never been busier these days. Merchants are now scrambling to provide digital payment options to customers who seek to avoid, or are simply unable to, pay cash. “Our products have never been more wanted and needed,” said PayPal CEO Dan Schulman in light of the report that PayPal is signing up around 250,000 customers a day with 7.4 million customers activated during April period.

Even as we grapple with the factors that are going to affect our move towards a cash-free society, the pros and cons of living in such an idyllic world must be carefully weighed.

“Our products have never been more wanted and needed,” said PayPal CEO Dan Schulman in light of the report that PayPal is signing up around 250,000 customers a day with 7.4 million customers activated during April period.

BENEFITS:

Convenient Payment Locally and Internationally

Aside from avoiding the hassle of not being able to avail of desired products of services for lack of cash in your pocket, going full cashless also allows you to leave any worries behind when you travel. You don’t need to worry about exchange rates or currency withdrawal as your mobile device could handle everything for you.

Reduced Illegal Activities

Cash is always the preferred medium in many illegal transactions as it provides no money trail and every person involved in the transaction can go completely anonymous. Those days could end in a cashless society. As automatic paper trails are created, illegal gambling, drug operations and money laundering could be a thing of the past as a clear record of transfer of ‘money’ will exist, serving as a deterrent to lawless elements.

Increased Safety and Security

Carrying cash around entails risks and makes you an easy target for criminals. Once cash has been taken away from you, it now becomes a criminal’s possession which can be spent without any trace that they were yours.

Printing Money Costs Money

Going cashless is not only convenient, it also saves money. Printing coins and bills have costs. Storing those bills and moving them around have costs. Even storing them costs money. Businesses that churn a lot of cash have to deposit them, withdraw them and keep moving in order to keep the business going. All of these problems will go away once we get rid of the physical cash.

As automatic paper trails are created, illegal gambling, drug operations and money laundering could be a thing of the past as a clear record of transfer of ‘money’ will exist, serving as a deterrent to lawless elements.

RISKS:

However, depending on how you look at it, going cashless can actually entail more risks than benefits. Some of these are:

Full Access to Funds Might Not Be Guaranteed 

Once you become dependent on technology to get access to your funds, then problems such as glitches, virus, computer error, and even innocent mistakes could prevent you from being able to spend your money. Moreover, merchants that encounter compatibility issues or system malfunction may not be able to accept your payment even if you have enough funds to do so.

Additional Charges by Payment Processors

Moving to a cashless society might entail selecting a few payment processors to handle payment transactions. These payment processors are companies that have invested time and resources to create a product that could handle the task. As such, some form of fees must be implemented in order to recoup their investment. The resultant effect could be higher total cost of transaction instead of savings, purportedly touted due to less cash handling.

Increased Privacy and Security Concerns

Regardless of the amount of encryption, security and safeguards being implemented, electronic payment always entails risks of mishandling data. With the amount of information that will be generated with the continued adoption of electronic payment, malicious elements will be harder at work to get their hands on these data. On the contrary, cash transactions are always anonymous – and to some degree, safe.

Your Funds Can Be Hacked

While there is zero chance that a robber or a pickpocket could steal from you, hackers could actually do you more damage. It’s not unlikely that if someone is targeted by a particular hacker, his funds could be dried up, leaving you with absolutely nothing in your account at all. Even if there are some form of paper trail, restoring your funds after a breach could be complex and time-consuming.

Will cashless ever be possible for all?

If history has anything to teach us, it is that the world is constantly evolving. With the rise of e-commerce and digital payments, it is not impossible to say that physical currencies will soon be obsolete. What’s important to note is that every country in every region are moving towards this ideal at their own pace. The march for progress continues. For now, we have credit or debit cards, mobile payments and crypto/digital currencies that give us hints as to how a cashless society might evolve. Who knows? Something even more revolutionary might come along.

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>> To read more about this story and other exclusive features about the digital banking landscape, download the latest issue of The Digital Banker Magazine HERE.

3 Factors That Will Accelerate the Cashless Revolution

3 Factors That Will Accelerate the Cashless Revolution

The COVID-19 pandemic has spared practically no one. In all corners of the world, with people from all walks of life, everyone is talking about a new normal, barely less than a year after the crisis starts. One of the most hotly debated topics of late is whether we are now heading towards a fully cashless society. Will 2020 mark the start of a process when we completely banish cash as a medium of value exchange?

Since about 960 AD, when the earliest known paper money began circulating in China, the thought of eliminating cash, in favour of electronic or digital medium, had been inconceivable. Ironically, these days, China is one of the leading countries with the highest volume of cashless transactions. From food to clothing to the latest gadgets and games, people, regardless of age or social status, are using some form of digital medium to pay for goods and services in China.

China is truly a trailblazer in the “cashless” movement. According to figures from eMarketer, “mobile payment users in China will represent 61% of the 947.1 million proximity mobile payment users worldwide.” Furthermore, 577.4 million people in China made a purchase via proximity mobile payment within a six-month period in 2019. “Those users account for 49.6% of the country’s population,” says eMarketer.

This astounding growth is enabled by leading Chinese fintech firms, Alibaba (Alipay) and Tencent (WeChat Pay). Reports from Forbes revealed that “Alibaba’s revenue grew 144% over 2017-2019 to $56 billion.” Meanwhile, Tencent reported a total annual revenue of nearly 377 billion yuan in 2019, an increase by 20 percent compared to the previous year,” according to figures from Statista. Surely, the rate of growth of these companies is reflective of the Chinese population’s fondness for digital medium.

This cashless revolution is no doubt going to be further accelerated by the COVID-19 pandemic. In fact, many fintech firms and online payment platforms such as PayPal, Venmo, Stripe and Square have never been busier these days.

This cashless revolution is no doubt going to be further accelerated by the COVID-19 pandemic. In fact, many fintech firms and online payment platforms such as PayPal, Venmo, Stripe and Square have never been busier these days. Merchants are now scrambling to provide digital payment options to customers who seek to avoid, or are simply unable to, pay cash. “Our products have never been more wanted and needed,” said PayPal CEO Dan Schulman in light of the report that PayPal is signing up around 250,000 customers a day with 7.4 million customers activated during April period.

PayPal added that it was growing across all markets including those most impacted by the coronavirus pandemic such as Spain and Italy.

Factors that will affect drive towards cashless society

While all signs point to an inevitable shift to a cashless society, there are real and significant issues that must be addressed first before we declare the death of cash. Some of these are:

Technology

Turning the dream of a cash-free society depends largely on technological readiness. It can be argued that China’s success in the widespread use of digital payment medium is underpinned by its success in setting up an infrastructure that allows collection and processing of enormous amounts of data. In addition, China has also invested significant amount of resources to develop e-RMB, the first digital currency operated by a major economy. Through and through, technology has played a central role in mounting these efforts.

Similarly, in Sweden, a group of six large Swedish banks have joined together to develop Swish, a mobile payment system that boasts of more than 6.5 million users as of 2018. Today, Swish is used by almost all merchants in Sweden as the de facto payment option along with payment by card. Payment by cash, in fact, will earn you some frown as almost very merchant prefers card or payment by Swish mobile app.

In the US, the charge is being led by unicorn fintech companies that have found a way to embed their technology into the lives of online customers locally and abroad. Famous global brands such as Under Armor, Target, Lyft, Grab, Deliveroo, Facebook, Google and Uber, for example, are all using Stripe, an online payments processor for internet businesses.

Turning the dream of a cash-free society depends largely on technological readiness. It can be argued that China’s success in the widespread use of digital payment medium is underpinned by its success in setting up an infrastructure that allows collection and processing of enormous amounts of data.

Culture

For a cashless society to truly thrive, there must be a widespread shift in cultural norms. Whereas some societies have generally been more open with new technology and innovation, some communities are averse to digital technology because due to the inherent security risks involved. Moreover, the digital divide between the highly industrialised and developing nations couldn’t be denied. As such, customs and beliefs among the population on what constitutes ‘value transfer’ may be hard to shift.

Government

Governments, and people’s trust in them, play a crucial role in pushing the agenda of a cashless society. A purely digital value exchange requires management and security of enormous amount of data. Hence, the population must be able to see that the ultimate custodian of their financial transactions, are trustworthy and capable. Perhaps it would be good to start building momentum by capitalising on familiar government-led initiatives such as smart-nation. By touting the benefits of smart-nation, an argument for a digital value exchange on a national level can be made.

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>> To read more about this story and other exclusive features about the digital banking landscape, download the latest issue of The Digital Banker Magazine HERE.

Will StanChart and NTUC’s digital bank, Phoenix, be granted the coveted digital banking license in Singapore

Will StanChart and NTUC’s digital bank, Phoenix, be granted the coveted digital banking license in Singapore?

Monetary Authority of Singapore (MAS) has resumed the assessment process to award its five coveted digital banking licenses and stated that the winners will be announced in H2 2020.  In April 2020, amid the pandemic concerns, the assessment process was put on hold and the 21 applicants were asked to review their business proposals, assumptions, valuations underpinning their financial projections keeping in mind the immediate and post pandemic impact on its business.

With the resumption of the assessment process, MAS announced in June 2020 that it will go ahead with reviewing 14 of the 21 applications stating that “eligible applicants, comprising five digital full bank (DFB) applicants and nine digital wholesale bank (DWB) applicants, will progress to the next stage of assessment”, doing so without revealing any names or bid details. This being said, certain applicants – SEA Ltd and Ant Financial and consortiums such as Grab and Singtel, Razer and Sheng Siong Holdings, FWD, LinkSure Global, Insignia Ventures Partners, Carro and iFast Corporation partnering with Hande Group & Yillion Group – have made their bids public.

While acquiring a digital banking license seems pivotal for all these players, most of them come with bare minimum experience of operating a bank. While having relevant experience when venturing into a new business is a stereotypical question, a relevant one is who are these applicants going to service? Singapore with a population of about 5.9 million has an internet penetration of about 88% according to a survey. Also mobile app banking in Singapore stand at about 65%.  Considering this, it’s hard to think of what value proposition could the 14 applicants bring which differentiates them from other banks? The simple answer to this is to serve the underserved SME sector and workers from unorganized sectors. This digital banking license could foster healthy competition, liberalise banking while being resilient. Companies which want to include financial services as a part of their company portfolio have the chance to use this offering to their advantage.

Another good news for StanChart is that it was recently qualified as a Significantly Rooted Foreign Bank (SRFB) in Singapore. According to the SRFB Framework, the bank can now “establish up to 50 POBs, of which up to 35 may be branches.”

While this is true for the known contenders, an unannounced applicant named Phoenix – a consortium of NTUC and Standard Chartered is also in the race for the digital banking license. While contemplating who could head the digital banking initiative in Singapore, TDB perceives co-founders of neobanks such as Judo Bank, Xinja or 86 400  could be credible candidates for this role. For those unaware, Standard Chartered forayed into Africa in 2018 with a digital-only bank in Côte d’Ivoire (CDI) following it up with Uganda, Tanzania, Ghana and Kenya in 2019.  Armed with this information, it is obvious why Standard Chartered is entering the race for the digital banking license in Singapore. The bank is well positioned to take advantage of this offering and with success projects in Africa, StanChart is uniquely qualified to come out a winner. Also, one of the key items in the business proposal for the digital banking license application must include regional expansion plans. This would provide the much needed entry point into Southeast Asian markets which hold similar value propositions as Africa.

Another good news for StanChart is that it was recently qualified as a Significantly Rooted Foreign Bank (SRFB) in Singapore. According to the SRFB Framework, the bank can now “establish up to 50 POBs, of which up to 35 may be branches.” Not only this MAS is considering enhancements to the framework which will grant “additional full bank licence to an SRFB that substantially exceeds the SRFB baseline criteria. This will enable them (SRFB) to have the same flexibility as Singapore-incorporated banking groups to establish subsidiaries, including with joint-venture partners, to operate new or alternative business models such as a digital-only bank.” With all this being said, StanChart seems to be in the right place to use’s MAS’s proposition.

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Image: mimisim / Shutterstock.com

COVID-19 Pandemic and The Era of Responsible Banking

COVID-19 Pandemic and The Era of Responsible Banking

An industry that has been able to weather crises such as SARS, Ebola, 9/11, Asian financial meltdown and of course, the 2008 financial crisis, otherwise known as The Great Recession, is nothing less than resilient. Amidst the ongoing uncertainty brought about by the COVID-19 pandemic, the banking industry is once again facing an enormous challenge, the likes of which are totally unprecedented in scale.

Instantly, the impact on the economy started to reverberate across all regions. According to The Center for Global Development, an international think tank that focuses on international development, “travel restrictions and lockdowns imposed to contain the spread of COVID-19 continue to impact the economic outlook for low- and middle-income countries.”

In Asia and the Pacific, economic growth is expected to decline by 2.7 percent in 2020 (down from last year’s 3.6 percent growth) and is seen as the most significant fall since the near-zero growth rate logged in 2009 during the global financial crisis, according to APEC. In addition, Asia-Pacific will also see a 50% decrease in passenger demand this year compared to last year. As a result, airline passenger revenues is estimated to record a revenue decline of $113bn compared to last year.

DBS, Southeast Asia’s largest bank, reports a 29% drop in first-quarter year-over-year net profits, setting aside $772.5 million “to cover potential losses from the coronavirus pandemic.”

Meanwhile, Latin America may experience a contraction of income between 11% and 22% according to a simulation by the Bank of Spain. Moody’s predicts a 6% contraction for Argentina’s economy for 2020, 5.2% for Brazil and 7% for Mexico.

Brazilian government minister Salim Mattar estimates that “the unemployment rate in [Brazil] may even double due to the impact of the coronavirus crisis on the economy.”

Not spared from economic shocks, Africa’s growth is also estimated to slow to 1.8 percent in the best-case scenario or to contract to -2.6 percent in the worst-case scenario from the 2.9 percent in 2019 and the pre-pandemic 2020 forecast of 3.2 percent, according to The United Nations Economic Commission for Africa.

Overall, the World Bank warn that “COVID-19 is likely to cause the first increase in global poverty since 1998 when the Asian Financial Crisis hit.”

“Global poverty — the share of the world’s population living on less than $1.90 per day — is projected to increase from 8.2% in 2019 to 8.6% in 2020, or from 632 million people to 665 million people,” World Bank adds.

Overall, the World Bank warns that “COVID-19 is likely to cause the first increase in global poverty since 1998 when the Asian Financial Crisis hit.

The Era of Responsible Banking

Since 2008, in the aftermath of the global financial crisis, banks have made significant steps to take action and create products that are better aligned with the social and environmental values of the clients, not just because regulators have demanded it, but because society expects it. Moreover, it has proved to be beneficial to the bottom line.

Formally, this is now known as Principles for Responsible Banking (PRB). The Principles for Responsible Banking were launched by 130 banks from 49 countries, representing more than USD47 trillion in assets, on 22 and 23 September 2019 in New York City, during the annual United Nations General Assembly.

At the end of March 2020, as the world sees the rapid spread of COVID-19, the PRB group called on its signatories to take action to support society and businesses in this unprecedented crisis. More than 150 banks joined the call and were in fact, doing more than what their governments are asking them to do when it comes to supporting small businesses and unemployed individuals.

The examples of how banks are helping societies during the collapse of an economy is aplenty.

For example, in the US, banks have become the predominant channel for its Paycheck Protection Programme, a $659 billion aid programme for small businesses. US regulators have also eased restriction to allow banks to tap into their capital reserves so they can continue lending.

In Switzerland, regulators and banking institutions worked together to provide loans for businesses who only need to fill out an online form and if approved, the loan could be disbursed to their accounts the next day. Likewise, in South Africa, filling in a form is not even needed as banks were allowed to adopt ‘opt-out’ models making it easier for loans to be extended. And in China, banks worked closely with regulators so loans and extensions could be fast tracked.

In mounting these unprecedented efforts to help societies, as well as prevent further deterioration of economic gains, global central banks are also stepping up to the plate and taking decisive actions.

Elsewhere, in The Netherlands, ABN Amro has extended an automatic six-month deferral on payment of principal and interest for clients with a credit facility of up to 50 million euros. And in Singapore, DBS Bank is allowing credit card holders to roll repayments into a single loan, effectively cutting rates from more than 20% to high single digits.

In mounting these unprecedented efforts to help societies, as well as prevent further deterioration of economic gains, global central banks are also stepping up to the plate and taking decisive actions. Through various measures such as rate cuts, liquidity support and easing of financial policies, the world’s central banks are playing a crucial role in preserving economic stability during this crisis.

Commitment to Move Forward

While the proverbial light the end of the tunnel may not be very clear in sight yet, COVID-19 and its impact already highlight the importance of keeping sustainability and responsibility at the forefront of banking agenda. Banks that have been committed to responsible banking are seeing good progress and are in fact, dealing better with the COVID-19 crisis.

Through the Principles of Responsible Banking, understanding the needs of all stakeholders becomes a paramount concern, and as such, it allows decision makers to understand the potential impact of any decision during a crisis.

However, any principles and proposals around responsible banking may come to naught if these aren’t backed by commitments and tangible targets. The new normal may come sooner than expected, or later than hoped. What’s important is to continue to look out for each other. After all, doing business is all about helping our customers and our people.

The Private Wealth Landscape in Mauritius and Bank One’s Approach to Wealth Management

The Private Wealth Landscape in Mauritius and Bank One’s Approach to Wealth Management

Bank One’s Guillaume Passebecq, Head of Private Banking & Wealth Management shares insights on Bank One’s approach in wealth management, the private wealth landscape in Mauritius and the crucial role digital channels play in private banking strategy. Below are the excerpts of our interview.

Can you tell us about the efficacy of Bank One’s approach in wealth management?

Guillaume Passebecq, Head of Private Banking & Wealth Management

Guillaume Passebecq: Bank One is a leading Mauritian bank with a regional footprint. Its two shareholders, Mauritian conglomerate CIEL Limited and Kenya-based I&M Holdings, have an extended presence on the African continent and banking operations in Madagascar, Kenya, Tanzania and Rwanda. Our shareholders’ strong footing in Africa grants us easy access to the securities markets in Kenya and Rwanda, positioning us as a favourable bridge to the booming East African market.

With our on-the-ground presence in Africa, a robust custodian network that extends over 50 countries, and with Euroclear as our main depository, all our clients; individuals, external asset managers and financial institutions; have direct access to the deep insights of our local and international experts.

We operate on a total Open Architecture model that offers best-of-breed products from multiple global providers. The collaborative nature of this model allows us to unlock a world of opportunities and deliver a diversified range of local and international solutions, including bonds, equities, ETFs, funds, and structured products. Our primary focus is the protection and growth of our clients’ wealth. Through our Open Architecture model, our clients can choose one or more independent portfolio managers, who will leverage their in-depth knowledge to deliver the desired investment objective.

Moreover, as their custodian bank, we are responsible for the safety of our clients’ securities and assets, which are recorded off-balance sheet. Our depositary, Euroclear – rated AA+ by Fitch Ratings and AA by Standard & Poor’s – is a proven and resilient provider of securities settlements.

At Bank One, we help our clients navigate the complex world of financial services by bringing forth different investment solutions. We offer both Execution Services which allows them to trade directly on all international markets by accessing our extensive network of trading specialists and Discretionary Portfolio Management (DPM) where they are able to choose an expert to oversee their financial assets.

How has the private wealth landscape in Mauritius changed over the last 5 years and what trends are emerging that may not be so apparent?

Guillaume Passebecq: The private wealth industry continues to experience significant challenges and transformation. Over the last 5 years, the industry in Mauritius has gained more exposure to international standards both in terms of pure banking products and services as well as more sophisticated investment solutions. The fact that Mauritius historically attracted and continues to attract foreign investors, is a key element of our business model. We believe that the foreign investors look for a more holistic advisory solution that encompasses their needs across a wide range of financial products and services.

Alignment with international laws and standards has also contributed to make the Mauritian Financial System more transparent and robust. Recent EU decisions are forcing Mauritius to reinvent itself as the industry’s development lies even more on internationalisation and it can adapt to those standards.

Last but not least, the local private wealth landscape has also experienced significant digitalisation efforts in recent years, with the introduction of real-time digital access and a strong custody services offer. HNW customers in particular are looking for a more hybrid approach. They want the best of both worlds as they are not ready to forego the human touch but they are also looking for a bank that can provide them with a complete digital banking experience where advisory can be provided via email or over the phone.

Over the last 5 years, the industry in Mauritius has gained more exposure to international standards both in terms of pure banking products and services as well as more sophisticated investment solutions.

How crucial of a part do digital channels and ecosystems play in Bank ONE’s strategy? What new products and/or services are your customers requesting as a result of COVID-19?

Guillaume Passebecq: From a pure banking perspective, customer behaviour and expectations are constantly evolving. They are expecting a seamless digital banking experience using mobile applications as well as a digitally-driven communication model from their financial service providers. Traditional brick and mortar are, in turn, being converted into greener and more efficient workspaces allowing for a more pleasant interaction with the customer.

Bank One has fully embraced this wave and invested massively in digital channels, as the old paradigm is no longer sufficient to maintain a competitive edge in the market. We have revisited our business strategy and operational model to invest in digital channels such as a revamped Internet Banking platform, a new Mobile Banking application, a full-fledged Custody platform and an E-advisory platform. Our strategy is focused on customer satisfaction and it is in our DNA to evolve with global market changes.

Can you see a silver lining in the midst of the Covid-19 cloud, in terms of handling customer expectations?

Guillaume Passebecq: In every crisis, clients expect more proximity from their banks and a close follow-up of their investments. This period of financial stress has brought forward the resilience of Bank One’s Open Architecture model, as multi-management investment solution can be an efficient way of reducing performance volatility.

The global economy has been experiencing dramatic changes since the fourth quarter of last year. Apart from the bitter effects of the COVID-19 global pandemic, we also witnessed negative oil prices for the first time ever. Increased ESG-related transformations, such as climate change, are starting to affect peoples’ daily habits.

We believe that the current crisis is changing the mind-set of some investors with greater emphasis on green investment given a fresh focus that looks further into the future. COVID-19 is further accelerating ESG investments, which have seen a steady increase of inflows and better-than-average returns since the beginning of the pandemic. I believe the rationale behind is that the COVID-19 crisis has put the spotlight on vulnerabilities and our dependence on the natural environment.

This crisis has also placed greater emphasis on the security of clients’ assets amidst greater risk and volatility. At Bank One, our primary focus is the protection and growth of client’s wealth and we make sure that their investments are kept off balance sheet with a trusted depository like Euroclear acting as the provider for securities settlements.

Bank One has fully embraced this wave and invested massively in digital channels, as the old paradigm is no longer sufficient to maintain a competitive edge in the market.

As a winner of Best Product Innovation at the Global Private Banking Innovation Awards 2020, what is on your immediate digital innovation wish list for Bank One?

Guillaume Passebecq: We are at a very special moment in history right now and uncertainty around the depth and duration of the COVID-19 pandemic has forced banks to review their current processes and re-invent themselves. More than ever, we have seen that digital transformation is the key to enduring such crisis. Lockdown does not necessarily mean shut down. At Bank One, we have been able to navigate through this crisis and ensure normal banking operations are carried out thanks to the digitalisation of our internal processes.

Bank One has customer satisfaction as one of its core tenets. We believe that we can position ourselves to capitalise on the emergence digital services trend whilst adopting a customer-centric approach to stay true to our values. Digital transformation at Bank One is not a project, it is an ongoing process. It is in our DNA to continuously reassess our processes and platforms in order to meet changing customer needs and market dynamics.

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>> To read more about this story and other exclusive features about the global private banking landscape, download the latest issue of Global Private Banker Magazine HERE.

Bank One Pushing the Envelope in Product Innovation

Bank One: Pushing the Envelope in Product Innovation

Gone are the days when private banking used to be traditional and stodgy. Enter the age of technology and innovation. Or in the case of Bank One Private Banking, the rise of open architecture.

Bank One operates on a total Open Architecture model that offers best-of-breed products from multiple global providers. The collaborative nature of this model allows it to unlock a world of opportunities and deliver a diversified range of local and international solutions, including bonds, equities, ETFs, funds, and structured products. Being the only Private Bank in Mauritius offering an Open Architecture Wealth Management product combined with a real-time digital access and custody solution, Bank One is a true paragon of private banking innovation.

Recognising this exceptional feat, Bank One Private Banking, Wealth Management & Securities Services (Bank One) was awarded Winner, Best Private Bank – South Africa and Best Product Innovation at the Global Private Banking Innovation Awards 2020 (GPB Awards) by The Digital Banker.

Guillaume Passebecq, Head of Private Banking & Wealth Management

Considered as the industry’s most authoritative private wealth awards, The Global Private Banking Innovation Awards 2020 (GPB 2020) organised by The Digital Banker identifies and distinguishes the world’s best in class Private Banks, Family Offices and Wealth Managers that demonstrate elite levels of performance & creativity.

Among the highly respected industry experts who helped select this year’s award winners are leaders from companies such as Forrester, Protiviti and EY. Previous year’s judges include PwC, KPMG, and Fuji Xerox.

“Bank One’s strong innovative culture is a key differentiator for them in the market. Through its 100% Open Architecture platform and Live Custody Software, its customers can grow, manage and preserve their wealth optimally. By combining in-house knowledge and expertise with the best investment opportunities from asset managers globally, Bank One’s clients enjoy greater freedom, greater choice, and greater value,” said Nirav Patel, Managing Director at The Digital Banker, the organiser of the Global Private Banking Innovation Awards during the awards presentation.

In a statement, Guillaume Passebecq, Head of Private Banking & Wealth Management for Bank One Private Banking said: “We are proud to be recognised as Best Private Bank – South Africa and honoured to be awarded for Best Product Innovation by The Digital Banker. Both these awards celebrate the excellent work of our teams but also that of our external asset managers and partners. I believe that in these challenging times, the open architecture model has proven to be more resilient through better diversification of investment holdings. We shall continue to provide our private investors, institutions, external Asset Managers and family offices with tailor-made products and services to meet their financial needs.”

Open Architecture Platform

There is more to growing wealth than simply investing money. And for Bank One, bringing the best investment solutions locally and internationally is the best way to help its customers navigate the complex world of financial services.

In setting up their Open Architecture Wealth Management offer, they have on-boarded the most accomplished asset managers and best-in-class solutions from the financial marketplace. Bank One selected Euroclear as its depositary. Euroclear is rated AA+ by Fitch Ratings and AA by Standard & Poor’s and is a proven and resilient provider of securities settlements, the largest one in the world.  The message that Bank One wants to impart is simple: its clients’ investments are kept off-balance sheet thus providing customers with added peace of mind.

On the other hand, the Bank’s state-of-the-art Custody Platform draws information from multiple sources (local and international) and consolidates data in one portfolio, on one single platform. By simply logging in, Bank One customers are able to view their portfolio’s composition and obtain real-time pricing information sourced from Bloomberg, thus helping them better understand their investment life cycle and make more informed investment decisions.

Bank One operates on a total Open Architecture model that offers best-of-breed products from multiple global providers.

Making a difference in Africa and beyond

Bank One responds to today’s challenges with bespoke securities services designed to cover all the activities of the banking value chain. With its on-the-ground presence in Africa and a robust custodian network that extends over 50 countries, the client’s interests are always at the heart of Bank One.

Bank One has a direct link to global custodians and agent banks that allow them to open accounts in a wide range of markets to facilitate clients’ investment needs. The Bank has the capabilities for the safekeeping of most asset types including equities, ETFs, bonds, structured products, Mauritius Treasury Bills, mutual funds, hedge funds, money market funds and more. Its shareholders’ strong footing in Africa grants them an easy access to the securities markets in Kenya and Rwanda, positioning Bank One as a favourable bridge to the booming East African market.

For Bank One, bringing the best investment solutions locally and internationally is the best way to help its customers navigate the complex world of financial services.

Because of these, the team has counted numerous achievements, which include:

  • Development of a full-fledged Custody platform that allows clients to view their portfolios on-line and in real-time
  • The first bank to have successfully on-boarded a Mauritian Rupee Fund on the Euroclear platform and executed a subscription order. This endeavour has greatly benefited local fund managers, whose funds are now available on an international platform, allowing them to target a wider range of investors across geographical locations.
  • Founded the Investor’s Circle, a biannual networking event that brings together private investors, institutions, asset managers and service providers. The island’s very first B2B platform for finance professionals, Investor’s Circle allows players from the industry to connect, exchange ideas and address shared challenges.

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>> To read more about this story and other exclusive features about the global private banking landscape, download the latest issue of Global Private Banker Magazine HERE.

Maybank Private Purveyor of Innovation in the ASEAN Region

Maybank Private: Purveyor of Innovation in the ASEAN Region

Probably no one understands the ASEAN market better than Maybank. Being an ASEAN based bank with on-ground operations in all 10 ASEAN nations, it is well-positioned to connect clients to and from this region with the rest of the world. Maybank Private has strategically expanded its business footprint aggressively across ASEAN and beyond. With three onshore booking centres firmly established in Singapore, Malaysia and Hong Kong, it offers HNW clients across the region direct access to regional and global investment opportunities. A solid proposition that allows Maybank Private to punch above its weight.

Having been bestowed 8 major awards at the Global Private Banking Innovation Awards 2020 by The Digital Banker only proves that Maybank Private is destined for bigger things to come. The awards include:

  • Winner, Best Private Bank Overal ASEAN
  • Winner, Most Innovative Business Model
  • Winner, Outstanding Young Private Banker – Lawrence Hoo
  • Winner, Outstanding Young Private Banker – Kenny Liu
  • Winner, Outstanding Young Private Banker – Nick Goh
  • Winner, Best Private Bank for Islamic Services (Maybank Islamic)
  • Highly Acclaimed, Outstanding Technology Implementation – Back End
  • Highly Acclaimed, Best Private Bank for Client Experience

The Global Private Banking Innovation Awards 2020 (GPB 2020) organised by The Digital Banker identifies the world’s best in class Private Banks, Family Offices and Wealth Managers. They are the elite performers when it comes to Fixed Income, Structured Investments, Family Office Services, Cash Management, Islamic Finance and more.

Among the highly reputable line up of judges who helped select this year’s award winners are respected subject-matter experts from companies such as Forrester, Protiviti and EY. Previous year’s judges include PwC, KPMG, and Fuji Xerox.

Being an ASEAN based bank with on-ground operations in all 10 ASEAN nations, Maybank is well-positioned to connect clients to and from this region with the rest of the world.

“Maybank Private is supported by a strong team of Investment Consultants with a good mix of backgrounds, each with a slight skew in forte, while being competent in all asset classes. The team’s approach of adopting a regional perspective on on-boarding, servicing and referring of eligible clients paves the way for a total banking experience free from any conflict or ‘territorial’ mindset. As a result, its customer’s interest is always at heart,” said Nirav Patel, Managing Director at The Digital Banker, the organiser of the Global Private Banking Innovation Awards in a statement.

Commenting on the award, Mr. Alvin Lee, Maybank’s Head of Group Wealth Management and Community Financial Services Singapore, remarked: “As a bank with a full-fledged ASEAN presence, we deployed a strategy to leverage our universal banking model across our network to offer unique value propositions. These awards bear testament to the hard work put in by our resilient and tight-knit team over the years as we build our brand name in the wealth management franchise in Asia.”

Highlighting the importance of providing clients with immeasurable value, Dato’ John Chong, Maybank’s Group CEO of Community Financial Services further added that, “Maybank plans to ride on this momentum to scale the business, accelerate Total Financial Assets and Investment penetration by strengthening our product propositions and leveraging strategic synergies across business divisions to provide our clients with impactful investment solutions.”

Maybank Private’s Digital Roadmap

Maybank Private’s innovative business model relies heavily on its digital roadmap that aims to elevate customer experience to a higher level. Its Avaloq Wealth Management System is at the heart of this strategy. Avaloq is a fully integrated front-middle-back office system which allows automation and straight-through processing to boost its business performance. It equips Client Advisors with a 360-degree view of their clients’ banking relationship with Maybank, allowing a more holistic approach to client management.

Complementing this is the Maybank Wealth Mobile App which empowers customers to manage their finances by providing a consolidated view of their financing portfolio with the Bank. Equipped with secure biometric technology, it provides direct access to their Client Advisors any time, any day. As a result of these digital initiatives, average investment fees per quarter has increased to a whopping 378% from 2015 to 2019.

Maybank Private adopts an open architecture products platform which enables them to screen and source for products from the best providers globally for its clients. Its mantra of ensuring that the best performing products, best investment advisory and best execution services are provided to its clients all the time is keeping the team in good stead as it navigates the competitive market of the ASEAN region.

Maybank plans to ride on this momentum to scale the business, accelerate Total Financial Assets and Investment penetration by strengthening our product propositions.

Best ASEAN Private Bank

Leveraging on Maybank Group’s strength and presence in ASEAN and key financial centres, Maybank Private has strategically expanded its business footprint aggressively across ASEAN and beyond.

Maybank Private has a deep and extensive presence in Malaysia with Private Wealth Centres in four major cities, namely Kuala Lumpur, Penang, Kuching and Kota Kinabalu and access to over 350 Maybank’s branch network across the country.

Private Wealth London Desk is also a strategic gateway to European markets. The UK has seen a growing number of HNW investors from Southeast Asia. Being one of the most matured financial centres in the world, Private Wealth London Desk serves as a strategic gateway for Maybank Private to connect its clients closer to opportunities in the European markets. The onshore presence of its Private Wealth London office and relationship managers ensure all client’s needs are taken care of seamlessly. Cross-border offerings such as overseas mortgage loans for London properties is one of Maybank Private’s key value propositions.

Maybank’s ASEAN/ASIAN Network is vast:

  • Malaysia – 354 retail branches, 6 investment banking branches
  • Singapore – 18 retail branches, 2 investment banking branches
  • Indonesia – 374 retail branches, 11 investment banking branches
  • Philippines – 73 retail branches, 1 investment banking branch
  • Cambodia – 21 retail branches
  • Pakistan – 1,598 retail branches (via associate MCB Bank Ltd)
  • Vietnam – 165 retail branches (via associate An Binh Bank)
  • Thailand – 30 investment banking branches
  • Greater China – 5 retail branches, 1 investment banking branch
  • Brunei – 2 retail branches
  • Laos – 2 retail branches
  • Myanmar – 1 retail branch
  • Dubai – 1 Islamic branch

Over 60 years, Maybank Group has focused on building deep and solid relationships with its corporate and individual clients across all the ASEAN countries. This has provided Maybank Private the foundation to leverage on these relationships and entrench it further by providing additional value propositions. With this advantage, its number of clients has grown exponentially. Total Financial Assets (TFA) have also grown to US$ 14.2 billion, a CAGR of 30% over a five year period.

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>> To read more about this story and other exclusive features about the global private banking landscape, download the latest issue of Global Private Banker Magazine HERE.

 

 

Standard Chartered Private Bank Living the Brand Promise

Standard Chartered Private Bank: Living the Brand Promise

While most brands can boast of an unforgettable, or even cleverly written tagline, one bank is consistently going far beyond to live up to its brand promise, Here for good. Standard Chartered Private Bank enjoys a rich history of over a century in the Middle East. More recently, it has been the title sponsor for some of the most prestigious events in the region. In particular, the Dubai Polo Gold Cup where SC Private Bank’s top leaders met and interacted with the crème de la crème of the region’s clients. Such landmark events resonate with its clients and build trust and confidence – key ingredients for business success in the region. For Standard Chartered, its brand promise is an honest commitment, for good.

It comes as no surprise that Standard Chartered Private Bank was adjudged Winner, Best Private Bank Middle East at the Global Private Banking Innovation Awards 2020 (GPB Awards) by The Digital Banker. Considered as the industry’s most authoritative private wealth awards, The Global Private Banking Innovation Awards 2020 (GPB 2020) organised by The Digital Banker identifies and distinguishes the world’s best in class Private Banks, Family Offices and Wealth Managers that demonstrate elite levels of performance & creativity.

Among the highly respected line up of judges at this year’s awards ceremony are industry luminaries from companies such as Forrester, Protiviti and EY. Previous year’s judges include PwC, KPMG, and Fuji Xerox.

“Standard Chartered Private Bank excels on the traditional values of Private Banking, such as good service, discretion and investment advice. In addition, they are strengthening their presence through digital capability and keen focus on sustainability. Offering a unique suite of products and proprietary tools in this space, SC Private Bank has enabled its customers to reach both their investing and social impact goals,” said Nirav Patel, Managing Director at The Digital Banker, the organiser of the Global Private Banking Innovation Awards.

Standard Chartered Private Bank excels on the traditional values of Private Banking, such as good service, discretion and investment advice.

Making an Impact in Sustainability Goals

Standard Chartered Private Bank enjoys a rich history of over a century in the Middle East. During this period and through its deep involvement in the achievement of its clients goals, they have tailored an offering that matches the unique needs of those wealthy clients in the Middle East to help them preserve and grow their wealth.

SC Private Bank launched the Standard Chartered Sustainable Linked Deposits, which was earmarked to support and fund sustainable programmes globally and in the Middle East. Its clients in the Middle East region have also been beneficiaries of its innovative ESG funds, targeting impact investments as well as sustainable bonds and cash deposits. At a Group level, its Sustainability Aspirations have been set as annual and multi-year performance targets aligned to the UN Sustainable Development Goals. Each Aspiration contains one or more performance measures. These are tracked to determine the percentage and proportion of all measures that have been achieved or are on track to deliver at the end of a period. In 2019, the group’s achievement stands 93.1% (rising from 90.9% in 2018).

The Bank has seen a sharp acceleration in assets under management in 2019 and even more so in 2020 as the COVID 19 crisis continues to unfold.

Some of the most notable accomplishments that have been achieved:

  • Developed a market leading product proposition in sustainable investing space which includes discretionary portfolios, sustainable structured products, ESG funds, targeted impact investments, alternative investments as well as sustainable bonds and cash deposits.
  • Partnered with firms that have the same values, and share a common sustainability focus so that a new ecosystem of like-minded corporate entities and wealthy families can be created. For example, they worked closely with the Al Habtoor Polo Club and Standard Chartered was the title sponsor of the 2020 Dubai Polo Gold Cup, as well as sponsorship of the DUBAI Marathon for the past 12 years.
  • Committed a US$1 billion of financing for companies that provide goods and services to help the fight against Covid-19, and those planning the switch into making products that are in high demand to fight the global pandemic.
  • Created a global fund of up to $50 million, which will provide relief assistance to those affected by the Covid-19 pandemic, followed subsequently with recovery funding. The Group said that it will immediately donate US$25 million to support emergency relief in the most affected markets.

Inspiring confidence within the community

Such engagements brought Standard Chartered Private Bank closer to its clients and their families. Its success in connecting with clients and wealthy families in the region and gaining more of their trust and confidence, is helping the Bank to rapidly increase its client base. The Bank has also seen a sharp acceleration in assets under management in 2019 and even more so in 2020 as the COVID 19 crisis continues to unfold. The first quarter of this year has seen record revenues generated and a sharp increase in assets under management.

This is reflected in part in the recently published market reports and announcements showing the stellar results of SC Private Bank. This success has also garnered confidence internally to invest and expand its Middle East private banking team. In 2019, the Bank announced hiring of 16 new Senior Bankers and managers in London and Dubai to further deepen its market coverage and enhance its breadth of products.

In the year of significant social disruption, driven by a global pandemic and its consequences, Standard Chartered Private Bank exemplifies the importance of sustainability in helping communities recover. By being at the forefront of innovation in this space, SC Private Bank has consistently proved that its core strength will never waiver for it’s all about empowering people and supporting their growth.

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>> To read more about this story and other exclusive features about the global private banking landscape, download the latest issue of Global Private Banker Magazine HERE.

 

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BNP Paribas Serving entrepreneurs both personally and professionally

BNP Paribas: Serving entrepreneurs both personally and professionally

Entrepreneurs have unique and distinct requirements in an ever-changing world; only a global private bank can assist in their path of value creation with the ability to build a bridge between their personal and business needs. Serving these exceptional individuals is at the core of the offering at BNP Paribas Wealth Management and well ingrained in its DNA.

Bagging 12 major awards at the Global Private Banking Innovation Awards 2020 by The Digital Banker, there is no doubt that BNP Paribas is the leading name when it comes to wealth management. The awards include:

  • Winner, Best Private Bank Hong Kong
  • Winner, Best Private Bank United Arab Emirates
  • Winner, Best Private Bank North Asia
  • Winner, Best Private Bank Western Europe
  • Winner, Best Private Bank – Digital Innovation
  • Winner, Outstanding Private Bank for Growth Strategy
  • Winner, Best Private Bank for Equities
  • Winner, Best Private Bank for UHNW Clients
  • Winner, Outstanding NRI Offering
  • Winner, Best Discretionary & Advisory Service Offering
  • Highly Acclaimed, Best Private Bank, AI & Big Data
  • Highly Acclaimed, Best Next-Gen Offering

Touted as the world’s most authoritative and highly esteemed private wealth awards, the Global Private Banking Innovation Awards 2020 (GPB 2020) organised by The Digital Banker exists to  identify best in class Private Banks, Family Offices and Wealth Managers that demonstrate elite levels of performance & creativity across Fixed Income, ESG, Structured Investments, FX & Cash Management, and more.

Among the highly respected line up of judges who helped select this year’s award winners are elite industry professionals from companies such as Forrester, Protiviti and EY. Previous year’s judges include PwC, KPMG, and Fuji Xerox.

Serving entrepreneurs

In the past six years, BNP Paribas Wealth Management has engaged with over 15,000 high net worth (HNW) and ultra-high net worth (UHNW) entrepreneurs across the world in an effort to better understand their motivations and ambitions, their behavior and profiles as both investors and drivers of business and economic growth. And each year BNP Paribas discovers insights to reinforce its commitment and support to clients who are successful entrepreneurs; to address their personal and professional ambitions.

“Our research shows that in regular markets, private equity outperforms the stock market by approximately 6% per annum. In downturns, like The Great Recession or the Dot-Com bubble crash, private equity strategies outperform public markets even more, which gives clients some comfort,” says Prashant Bhayani, Chief Investment Officer (Asia) at BNP Paribas Wealth Management.

The sixth iteration of its Global Entrepreneur Report, in association with Aon, consists of several parts. The first part of the report focused on a global overview of entrepreneurial investment, wherein it appeared that entrepreneurs allocate 20% of their investable wealth to real estate and private equity. Real estate in particular was viewed as a safe asset class especially in the Asian context.

Our research shows that in regular markets, private equity outperforms the stock market by approximately 6% per annum. In downturns, like The Great Recession or the Dot-Com bubble crash, private equity strategies outperform public markets even more, which gives clients some comfort.

The recent part two of the 2020 Global Entrepreneur Report focuses on private equity and private real estate. The outlook of entrepreneurs globally on these segments is fascinating and demonstrates both the highly attractive nature of private equity and the deep sophistication of HNW entrepreneurs. Furthermore, it highlights the unique nature of the Elite entrepreneur population, focused on business excellence and looking for performance across investment and market cycles.

While the report also highlights different patterns – in particular with regards to liquidity risks or macroeconomic uncertainty – in outlook depending on geography, age and gender, these key findings underline the strong cultural affinity between entrepreneurs and investors for private assets. The unique place of real estate as a core investment within most investment portfolio is also confirmed, with entrepreneurs expected to continue to increase their portfolio allocation to the asset class (from 10% to 18%) in the next 12 months.

Responsible Private Bank

BNP Paribas Wealth Management believes diversification is a key feature of investment strategies. Over the past years, the Bank has seen a significant pick up in clients’ appetite for private equity. In this persistently low interest rate environment, investors are looking for diversification and higher returns to optimise their portfolio’s risk return profile. BNP Paribas has been facilitating private equity investments since 1998 and has established a proven track record in this highly specialised asset class.

In a context marked by the Covid-19 crisis, BNP Paribas is helping even more of the world’s most demanding entrepreneurs. As a responsible private bank serving the economy, its objective has always been, and continues to be, to improve its own understanding of how to support entrepreneurs both personally and professionally.

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>> To read more about this story and other exclusive features about the global private banking landscape, download the latest issue of Global Private Banker Magazine HERE.

 

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