The New Landscape in Private Wealth Management

The New Landscape in Private Wealth Management

Private wealth management has been undergoing a massive transformation. In large part, because of the rapid technological innovation that has been going for the past couple of years, but more significantly, as a result of the strict measures being implemented by various governments to combat the pandemic. In this insightful interview with Masroor Batin, CEO Wealth Management – Middle-East & Africa (MEA) at BNP Paribas Wealth Management, he spoke about the new landscape in private wealth management, the trends in inter-generational wealth transfer and the role of digital in investments and meeting client expectations.

Global Private Banker: How was 2020 as a year for BNP Paribas Wealth Management across MEA, and what are you hopeful for over 2021?

Masroor Batin, CEO Wealth Management - Middle-East & Africa (MEA) at BNP Paribas Wealth Management

Masroor Batin, CEO Wealth Management – Middle-East & Africa (MEA) at BNP Paribas Wealth Management

Masroor Batin: We will all remember 2020 as the year of Covid-19. The different waves of the pandemic and lockdowns resulted in the fastest and deepest recession on record. At BNP Paribas Wealth Management MEA, we adapted our platform in just a few days to allow remote working while continuing to serve our clients. We also enhanced our digital capabilities to better engage with our clients since we were no longer able to meet them in person. It was firm proof of our agility to adapt.

Apart from the pandemic, by all metrics, 2020 was a very strong year for BNP Paribas Wealth Management MEA. We grew our teams notably on the coverage side; we enhanced our new client-centric commercial organisation; our clients entrusted us with significant net new cash (+$1Bn vs. 2019) and we closed remarkable transactions. More importantly, we focused on being even closer to our clients so we could serve them even better during this turbulent time. Our recent awards including “Best Private Bank in the UAE” given by your magazine, as well as our client satisfaction surveys, are a strong testament to our commitment that drives us every day as a company.

In 2021, we will continue our efforts in this regard, and we will ensure that we closely accompany our clients in their investment decisions and in their ambitions. We are also cognisant of the global challenges we are facing such as transitioning towards a sustainable economy. Today BNP Paribas Wealth Management is a recognised leader in the field of sustainable investment solutions, and we aim to continue meeting this growing demand from our clients for responsible solutions.

Many experts predict that around $30Tr to $70Tr will be passed down from the Baby Boomer generation to the millennial market in the coming decades, calling this the “Great Wealth Transfer.”

Global Private Banker: How is your firm approaching generational wealth transfer to the millennial market?

Masroor Batin: Many experts predict that around $30Tr to $70Tr will be passed down from the Baby Boomer generation to the millennial market in the coming decades, calling this the “Great Wealth Transfer.” This is very likely to be the largest wealth transfer in history. Within the Middle East, most of our clients are preparing for this transfer and we are already  accompanying them with our award-winning Wealth Planning team. Within BNP Paribas Wealth Management, we also organise Next Generation Seminars, dedicated to children of UHNWIs, which educate this generation on all aspects of this wealth transfer including the necessity for long-term strategic planning.

Finally, we clearly see a great acceleration in the uptake of socially responsible investing across all demographics, and notably among millennials. According to our 2020 BNP Paribas Global Entrepreneur report, 70% of entrepreneurs globally are more willing to invest sustainably than 2 years ago. Millennial entrepreneurs have even stronger ambitions: they are willing to invest as much as a fifth of their investments responsibly by 2021. We have integrated sustainable criteria into our core offering and we will take into consideration our clients’ risk/return and sustainability profile when we propose the investment solutions that match their values and their ambitions.

Global Private Banker: What is your outlook on the impact of COVID-19 on the private wealth landscape over the next 12-24 months, and what critical measures has your business taken to navigate these waters?

Masroor Batin: First, our clients are asking for more advice. In a rapidly changing environment, which is by its nature unpredictable, providing our clients with regular (sometimes daily) market updates and with easy access to market experts, becomes essential. We believe that banks with strong global and local expertise and tailor-made capabilities will have a strong competitive edge in this context, which is most certainly the case for BNP Paribas. For example, we published our 2021 Investment themes, they are grouped by investment horizon, from short term to long term but also looking at key areas such as sustainability, and we believe that these themes will be key for driving our clients’ investment ambitions.

Second, clients are looking for diversification, both in their investments and for their wealth managers and they now favour international players with strong solvability and liquidity ratios. This is clearly a driver at BNP Paribas! Again, we have seen an increased interest in our firm due to its size, its diversified model and its solidity.

Finally, the digital journey has accelerated both internally and externally, and we have launched new ways of engaging with our clients and our teams.

I strongly believe the measures, which we have put in place during these exceptional circumstances, like today, won’t go away when the crisis ends. They will become our BAU.

Global Private Banker: What are some of the digital capabilities your firm is investing in, as a result of changing client expectations?

Masroor Batin: There is nothing new that clients expect innovation from their wealth manager, and we have been investing in our digital capabilities for many years. It is probably too early to say definitively how the past few months events will shift client expectations, but we believe that there will be a significant transformation, putting on banks a responsibility to accelerate the digitalisation of the client experience.

For example, while physical interactions have always been central in our relationships with our clients, clients are much more open to digital interactions with us. This is definitely the result of the months of lockdown situations and travel restrictions.

To answer these new expectations, we continue to enhance our client journeys, notably in the areas of advice, portfolio management and communication. We have been leveraging during the last years on digital to make the client experience smoother and more personalised.

We believe that banks with strong global and local expertise and tailor-made capabilities will have a strong competitive edge in this context, which is most certainly the case for BNP Paribas.

Global Private Banker: Which Wealth Management FinTechs have caught your eye of late?

Masroor Batin: Globally, we have partnered with top FinTechs in their respective fields of expertise, notably through our  digital factories in Europe and Asia. Recently, we partnered with Gambit, a Belgium FinTech active in robo-advisory technology, to build a digital investment mandate for some of our clients. To give you another example, we are also currently working with DreamQuark, a deep learning platform, which has been accelerated in our BNP Paribas Plug & Play accelerator program in Station F in Paris.

Global Private Banker: How does BNP Paribas Wealth Management in the Middle East differentiate in a highly competitive landscape, and what would you say is your unique value proposition?

Masroor Batin: Without any doubt, it is our One Bank integrated approach, which is at the heart of our value proposition. It allows our Wealth Management clients to benefit from the not only our expertise, but also from all the expertise within the BNP Paribas Group, which is truly unique in the banking industry. For example, our clients can benefit from our Real Estate business, Asset Management, Personal Investors, Securities Services, Islamic Finance and Insurance to name a few. And of course, there is our very unique international footprint.

We are “the bank for a changing world” and to be so, we must understand the world, its changes, opportunities and challenges. This is our uniqueness.

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

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Is Fintech Eating Private Bankers’ Lunch

Is Fintech Eating Private Bankers’ Lunch?

As we enter the proverbial fourth industrial revolution, technologies such as artificial intelligence, the internet of things and big data continue to disrupt several sectors of the economy. Private banks are faced with the challenge of either keeping up with the pace of the revolution or losing their position as the leading wealth management institution for Ultra High Net Worth Individuals (UHNWI) and High Net Worth Individuals (HNWI).

Banks will have to restructure their infrastructure, workforce, and priorities to align with technological changes, and they would have to invest more into the security of data. Financial institutions must rethink the very definition of ‘client relationship’ and create new approaches to thrive in a constantly evolving environment.

However, in recent years, Challenger and Neobanks alike, with their mobile-first and cutting-edge digital infrastructure, have dominated the Fintech industry. They did this without having to put up physical branches, robo advisors or digital wealth managers. Their main plan has been to disrupt and redefine traditional banking while providing innovative wealth management services to underserved market segments.

While Neo and Challenger banks continue to chip away market share in the wealth management industry, lots of start-ups are beginning to gather momentum and successfully organise fundraisers in a bid to secure their place in this fast-growing industry. Neobanks such as Revolut, Chime, NubankMonzo, Starling and N26 have already become household names. Meanwhile, Rosecut, a UK fintech firm, offers digital wealth management solutions to affluent next-gen clients who has liquid wealth between £250,000 and £3 million.

“We are building the service of a private bank, with the cost-efficiency and scale of digital delivery,” Qiaojia Li, co-founder and CEO of Rosecut said in a statement.

The Digital Factor

Playing their fintech card really well, today’s neobanks are using digital strategies to their maximum advantage – and it seems to be paying off handsomely. Research reveals that the challenger and neo bank industry, which was valued at $20.4 billion in 2019, is projected to grow and reach $471.0 billion by 2027 at a CAGR of 48.1% from 2020 to 2027.

Obviously, the reduction in fees and service charges has made competition stiff, but this doesn’t automatically put traditional wealth management firms and private banks at a disadvantage as long as they can restructure to adapt to the changes and service offerings erupting in the industry. For example, established private banks are shoring up their digital capabilities to improve client experiences, one of them is for BNP Paribas Wealth Management.

Playing their fintech card really well, today’s neobanks are using digital strategies to their maximum advantage – and it seems to be paying off handsomely.

“There is nothing new in the fact that clients expect innovation from their wealth manager, and we have been investing in our digital capabilities for many years. It is probably too early to say definitively how the past few months’ events will shift client expectations, but we believe that there will be a significant transformation, putting on banks a responsibility to accelerate the digitalisation of the client experience,” says Masroor Batin, CEO Wealth Management – Middle-East & Africa (MEA) at BNP Paribas Wealth Management during an interview with Global Private Banker.

“While physical interactions have always been central in our relationships with our clients, clients are much more open to digital interactions with us. This is definitely the result of the months of lockdown situations and travel restrictions.

“To answer these new expectations, we continue to enhance our client journeys, notably in the areas of advice, portfolio management and communication. We have been leveraging during the last years on digital to make the client experience smoother and more personalised,” Mr Masroor Batin adds.

For other banks, the approach could be quite different. In 2016, investment giant Goldman Sachs launched  Marcus, their digital-only brand. Retaining the already reputable Goldman Sachs name, Marcus serves as an avenue for the company to diversify and delve into untapped markets. The company has also gone mainstream by introducing their mobile app, bringing their digital banking services to customers’ fingertips. In an update, Goldman Sachs said Marcus’ deposits reached $97 Billion as of end 2020 and is targeting at least $125 billion in deposits by 2024. Reports also have it that Goldman Sachs is considering acquisitions to bulk up its consumer banking unit Marcus.

Traditional institutions, indeed, appreciate the need to engage their prospects through the use of technology, but they still have lots of challenges to conquer. From constraints caused by legacy systems to issues surrounding usability and user experience, which results in low adoption rates, these traditional institutions face many drawbacks. And to top it all off, big tech is now poised to become big competition.

The reduction in fees and service charges has made competition stiff, but this doesn’t automatically put traditional wealth management firms and private banks at a disadvantage as long as they can adapt to the changes erupting in the industry.

The Big Tech Conundrum

In 2020, Capgemini’s World Wealth Report said that 93% of HNWIs in Asia Pacific ex-Japan are willing to entrust their wealth management needs into the hands of BigTechs like Apple, Facebook, Amazon, Google, Alibaba, or Tencent, should they decide to delve deeper into wealth management services.

HNWIs, millennials especially, are particularly more investment savvy than the older generations. They are always on the lookout for investment opportunities that generate higher interests. Due to the low-interest rate and high volatility of portfolio investments in recent times, investors are steadily gravitating away from portfolio investment towards investing in real companies. To survive these disruptions, banks have to strengthen their relationship with customers and review their offerings.

Strengthening their relationship with HNWI clients will set private banks on the right path to weather the storm of competition before them. New entrants in the financial industry such as Facebook, Google, and Amazon have e-money licenses, but they can be considered rookies in the financial sector. Nevertheless, these companies have access to big data concerning almost everyone’s habits on the internet, and they may leverage on this information to promote their business.

Private banks now face the enormous responsibility of taking advantage of Fintech to solidify their place as leaders in the financial services industry. As Fintech companies and already existing BigTech companies continue to disrupt the market, traditional banking institutions need to develop their technology for them to keep up with the competition.

Fintech also provides other new approaches to solidify the relationship between banks and their clients. The depth of the relationship between banks and their clients determines their competitive edge and chances of standing the test of the time in the wealth management industry.

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

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US-China Relations Wide Ranging Issues 2

US-China Relations: Wide Ranging Issues, At Risk of Boiling Over

In July this year, the Chinese consulate in Houston had been ordered to close its doors by the US government. This development is just one out of the many conflicts plaguing these two economic giants. Nothing like this has been seen in decades between China and the United States.

There are wide-ranging issues between Washington and Beijing that threaten to boil over if not managed properly. The most notable ones are as follows:

COVID -19

In some of the interviews granted by Donald Trump, he was heard several times referring to the coronavirus as ‘Chinese Virus’. His reasons lay with his staunch belief that the Chinese government failed to give accurate reports concerning the extent of the damage caused by the disease. He believes that their government simply ignored its duty to report to WHO since the first case of the virus was documented on Wuhan in 2019.

However, China insists that it has been nothing but transparent since the onset of the pandemic. Following Trump’s accusations, the World Health Organization has denied its involvement in supporting the disinformation by the Chinese. In response to this, the United States President Donald Trump formally started the withdrawal process from WHO, making good on his threats to deprive the UN body of its top funding source over its dismal handling of the pandemic.

HONG KONG

Tensions have clocked to a new height between the US and China. Recently, protests arose as a result of Beijing’s imposition of a new security legislation over the previous colony of Britain, which returned to China in 1997.

In response to this imposition, Donald Trump has signed a sanction effectively severing preferential economic treatment for Hong Kong. This move will allow him to place visa restrictions and sanctions over financial institutions and Chinese officials who’d been involved in enacting the new security law.

Predictably, China threatens to counter with a retaliatory move of their own in no distant time.

There are wide-ranging issues between Washington and Beijing that threaten to boil over if not managed properly.

SOUTH CHINA SEA

Until 2020, the Chinese has always laid claim to ninety percent of the South Sea. Meanwhile, Malaysia, Brunei, Vietnam, Taiwan and the Philippines has actively contested this claim.

Currently, the United States has hardened its stance in the matter, tilting towards the other Asian countries. The US believes that China has plans to build a Maritime Empire in the energy rich sea.

On July 13, 2020, Mike Pompeo, the US secretary of state, issued a statement that accused Beijing of a bully-based campaign and its claim, unlawful.

HUAWEI

The tech company based in China has been added to the US ‘Entity list’ In 2019, the US suspected the company of violating their sanction on Iran and can spy on customers through their devices. This security concern led Washington to add Huawei to its ‘Entity list’

However, Huawei has vehemently denied every one of the allegations and accused Washington of frustrating its growth because no American company can compete with their prices and tech savvy.

Washington has gone ahead to push other countries to drop Huawei, posing the same violations as their reason. The friction between the two has caused a serious decline in their access of Chips and other important parts from their US suppliers.

NORTH KOREA

According to the US, China has breached their sanctions on North Korea. Though Beijing has denied the allegations, tensions continue to rise.

The common goal of both countries is for North Korea to give up its nuclear weapons program and as such, should work together. Yet, that is far from happening. The Chinese government has agreed to lift some of its sanctions over North Korea but the United States does not agree.

Kim Jong Un, the leader of North Korea has met with Donald Trump thrice in an effort to ease the US sanctions but failed to agree every time. While US requires them to give up the nuclear weapons in Pyongyang, North Korea wants all the sanctions, lifted.

Nevertheless, the number-two diplomat, Stephen Beigun remains optimistic. In an interview, he opined that the two countries might still work together in spite of the dispute because of the greater good of ceasing the development of nuclear weapons by North Korea.

UIGHURS

The Uighurs are a minority Muslim group that reside in the western Xinjiang region.

The Chinese government set up complexes in that remote Xinjiang called Vocational training centers. They have been condemned for trying to stamp out what they term as extremism and have the Uighurs acquire new skills within the complexes.

Following the discovery of the violation of Uighur’s human rights, the US has placed sanctions on all the Chinese institutions, officials and companies.

A Better, Safer World

The relationship between the US and China is reaching a dangerous point. The already fragile relationship is on the brink of total collapse and we could only hope that in the coming days, the relationship could improve for the better. People from all over the world are pinning their hopes that the result of the 2020 US presidential elections will provide a pathway for calmer, more collaborative partnership between the two great powers.

As a famous world leader once quipped: “If we cannot now end our differences, at least we can help make the world safe for diversity.”

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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.

 

Image: Robert Way/Shutterstock.com

KS thumb

J.P. Morgan Private Bank: The Unique Value of Advice-based Services Model

This year’s Most Influential Female Leader in Asia at the Global Private Banking Innovation Awards is Kam Shing Kwang, Chief Executive Officer of J.P. Morgan Asia Private Bank. In this fascinating interview, Kam Shing shared her most remarkable career achievements thus far, the technologies transforming JP Morgan and the new investment trends that have emerged in the aftermath of the pandemic. Here are the excerpts of our interview.

 

TDB: A sincere congratulations on being named Most Influential Female Leader in Asia at this year’s Global Private Banking Innovation Awards. What is your most memorable achievement in your career thus far?

Kam Shing Kwang

Kam Shing Kwang Chief Executive Officer of J.P. Morgan Asia Private Bank

KS: Thanks for the honour. I am very humbled by the award, this is obviously due to the work from my entire team, who have worked very hard over the past few years. As for my achievements, it’s less about the actual achievements, and more about the journey of working hard and getting something done – this to me is the most memorable and the most rewarding. If there is one particular turning point I can think of, it would be at a very significant stage of my career. When I first joined JP Morgan, I was a portfolio manager focusing on investments for clients. I thought that was going to be my career path, but this job took me from being a portfolio manager to running the investment team and then in 2004, this led me to Singapore to run the investment team for Southeast Asia. Shortly after that, the head of the Singapore office had to relocate, and the opportunities opened up for me to become the head of Singapore office. This was in 2005, and was a very significant milestone and also a turning point in my career, as it opened up all the opportunities for me to broaden my scope beyond investments into business development and strategising for the markets across the region. That was a very significant moment in my career in JP Morgan.

TDB: You seem to be somewhat of a tech enthusiast, which must certainly be helpful given the $11 billion a year JPM spends on technology. Can you talk a bit about specific technologies that are transforming your business and why?

KS: In this current environment, technology facilitates our ability to work anywhere, anytime. It is absolutely remarkable. Mobile devices and different kinds of hardware allow us to access information wherever we are. But, I think it only just dawned on me during this pandemic where, at any one time, we have 97% of JP Morgan staff working from home. So, we’re talking about over two hundred thousand employees completely working from home and processing transactions seamlessly and effectively. This has all been made possible by cloud technology, etc, and I think that is one of the most amazing things I’ve seen.

In this current environment, technology facilitates our ability to work anywhere, anytime. It is absolutely remarkable.

TDB: How has JPM countered the adverse economic impacts of COVID-19, and what advice would you give to businesses navigating these unpredictable waters?

KS: It’s very heartening to hear from our employees and also from our clients. Clearly, our technology and platform have been critical in helping us serve our clients seamlessly and allowing our colleagues to work effectively. The commitment and devotion are simply unparalleled during this period.

One thing that has been extremely helpful and will continue to be particularly important in what we do for our people and our clients is the effort everyone is putting in. So, having empathy is very important for our employees. To think about how they are being impacted by the pandemic, they need to feel safe and secure – this is one of our top priorities. If we prioritise this, we will get there and will allow the entire workforce to work from home.  We put ourselves in our client’s shoes and understand what they need. They need information and require us to truly understand what their needs are. Our ability to listen, and understand this, already goes a very long way. We have a series of digital engagements and as a result, the digital adoption rate has increased a lot and we are now servicing our clients this way.

TDB: What new investment trends would you say have emerged as result of this pandemic?

KS: We see a significant disparity between the winners and the losers during this time. To define that, customers that are able to respond quickly during this period of time have fared well. Technology and healthcare are two sectors that have performed really well. And we’ve been recommending these sectors for a while. More broadly, what we’re sharing with our clients is that innovation is really important. And honestly, the technology that facilitates that. Innovation in this area should look at the way you process and service your clients and any business that is always responsive to new environments will eventually win.

So, we look for companies that have these attributes. We have a strategy about innovation, and it has been doing very well for the majority of our customers in the tech sector. Of course, this goes beyond technology.

Technology and healthcare are two sectors that have performed really well. And we’ve been recommending these sectors for a while. More broadly, what we’re sharing with our clients is that innovation is really important. And honestly, the technology that facilitates that.

TDB: How has business been since the launch of JPMs Trust Company in Singapore?

KS: It has gone well; everything is on track. Especially on the new business side of things. We have started better than we expected, which is great. We’ve been setting up new trusts for many company founders – seeing their companies to IPO. They want to start structuring and planning, so we have set up a significant number of such trusts for founders ahead of their IPOs.

 

TDB: Which products or services help differentiate your firm and what is truly unique to JPM’s Private Wealth offering?

KS: Obviously, it’s easy to talk about product. I’d like to talk about all the products we have – from investment to wealth advisory to credit, and all products that other parts of the bank offer. However, I think the most important thing at the end of the day is advice. And that advice has to be personalised depending on the client needs. I talk about being empathetic. If you have empathy, you can see from the clients’ standpoint on what their needs are. You can give them the right advice and that hopefully comes with the right solutions. So, I’d say, advice is what differentiates JP Morgan and the way we ensure that we give our clients the best advice. Obviously, having the right advisors who are given the right amount of tools is just as crucial too. Most importantly, our global consensus and the innovation mindset will mean that all the advice we give is always timely and holistic.

In the future I think clients will want to pay for advice rather than just products. The force of competitive pressure will drive down prices. So, I think the advice-based services model will be far more valuable.

TDB: What do you think the Private Bank of the future will look like?

KS: I think there are two parts to this, and I’ve probably touched upon both parts. People are going to value advice more and more. What we have seen, especially in Asia, is that certainly, products do play an important role. In the past, clients look at what products you can offer to determine whether you are the right provider. Increasingly, clients are going to see that product can be modified so what differentiates, really, is advice. So, in the future I think clients will want to pay for advice rather than just products. Also, we can see products are being commoditised and being manufactured more efficiently. The force of competitive pressure will drive down prices. So, I think the advice-based services model will be far more valuable.

The other thing is getting digital. Having the most efficient digital platform will be crucial in giving solutions and advice.

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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.

 

Images: MOZCO Mateusz Szymanski/Shutterstock.com 

Decoding the Needs and Preferences of Asia’s Next Generation of Wealth Holders

Pushing Water Uphill in Asia – SDG6: Clean Water and Sanitation for All

By Arnaud Tellier, CEO Asia Pacific, BNP Paribas Wealth Management

 

A United Nations (UN) goal of providing clean water and sanitation for all by 2030 is proving to be challenging in Asia. What does this mean for the region and what is being done to ensure this most basic of human rights?

The World Health Organization (WHO) offered some simple advice as Covid-19 began to spread: Wash your hands. Hand hygiene was one of the most effective ways to limit the spread of pathogens and prevent infections, it said, including the new virus.

Being able to wash hands is taken for granted by many. For others, it’s not so easy. The United Nations estimates that two in five healthcare facilities globally lack clean water and soap. Nearly two billion people only have access to water that is fecally contaminated and almost a billion more lack access to basic sanitation such as toilets.

Much of the problem in Asia stems from rapid and unplanned urbanisation. More than 60% of urban households live without piped water supply, with the problem being most acute in Manila, Jakarta, Dhaka and New Delhi.

Clean water for all

Access to clean water and sanitation is widely seen as a basic human right. It has the power to alleviate poverty and hunger, improve health, reduce inequality of wealth and gender and improve standards of education. It offers people greater dignity in their daily lives: the World Health Organization (WHO) estimates that some 673 million people still practice open defecation.i

On a broad economic level, the World Bank estimates that poor sanitation resulted in a loss of about US$223 billion of global GDP in 2015. Asia and the Pacific suffered the most, with losses of about 1.1 per cent of GDP overall, and some nations losing more than 5 per cent.

While poor sanitation has significant negative impacts, it also provides an economic opportunity: the WHO estimates that for every dollar invested in water and sanitation, the return is four dollars through saved medical costs and increased productivity.ii

Most goals rely on SDG6

While the 17 Sustainable Development Goals (SDGs) goals are measured individually, none of them can be achieved in isolation and almost all rely in some part on the delivery of SDG6: “Ensuring sustainable access to clean water and sanitation for all.”

SDGs 1 to 3 (no poverty, zero hunger, good health and well-being) are clearly dependent on clean water and sanitation. There are less obvious links with Goals 4 and 5 (quality education and gender equality), but it is impossible to build decent schools without good sanitation and – in many of the world’s poorest nations – it is women who take responsibility for collecting and providing water for the family, keeping them out of schools and further increasing gender inequalities. The goals associated with climate change, energy and the environment are also connected with progress towards SDG6.

Bigger cities, bigger problems

A 2019 United Nations report on the SDGs presents a bleak picture for Asia. The region is failing to make progress on almost two-thirds of the SDG targets and none of the 17 goals look likely to be achieved.iii

Of particular concern was a lack of progress in reducing inequality, protecting oceans and taking action on climate change. In many countries, especially in South Asia, lack of access to clean water and sanitation is contributing to targets being missed, with the situation stagnating or getting worse in developing nations.

Much of the problem in Asia stems from rapid and unplanned urbanisation. More than 60% of urban households live without piped water supply, with the problem being most acute in Manila, Jakarta, Dhaka and New Delhi.

Various countries have proved that dramatic improvements in the provision water and sanitation can be achieved in just a few years, and that some solutions are inexpensive, effective and can be deployed quickly.

Asia: green shoots

Overall, though, Asian countries have made good progress in improving access to safe drinking water and sanitation over the past decade.

Only one per cent of the population now uses surface water for drinking purposes and around 92 per cent now have access to basic drinking water.  Between 2000 and 2017, the SDG regions of Central and Southern Asia and Eastern and South-Eastern Asia increased the provision of basic sanitation by 36 per cent and 24 per cent respectively.

There has also been a dramatic decline in open defecation in Asia since 2000, with more than half of the population of Cambodia, nearly half of the population of India and a third of the population of Nepal and Laos stopping this practice.iv

In spite of these encouraging indicators, progress towards SDG6 remains uneven within the region. According to the United Nations, relatively wealthy North and North-East Asia has almost achieved the 2030 target already, with North and Central Asia not far behind, but populous South-East Asia and South and South-West Asia were behind schedule in 2019.v

 

 

Delivering the promise

Recognising the challenges that remain, the United Nations recently launched a Global Acceleration Framework titled “Delivering the promise: Safe water and sanitation for all by 2030.”

The framework puts in place five “accelerators” designed to dramatically improve the international community’s support for SDG6. These include optimising the use of financial resources; improving the quality of data; improving capacity by increasing job creation in the water sector and the retention of a skilled workforce; developing and implementing new technologies; and improving governance through better cross-sector and international collaboration.

New initiatives

Various countries have proved that dramatic improvements in the provision water and sanitation can be achieved in just a few years, and that some solutions are inexpensive, effective and can be deployed quickly.

UNICEF has lauded government initiatives including China’s Toilet Revolution, Indonesia’s Sanitation Campaign, Myanmar’s Clean Villages initiatives and the Philippines’ Sanitation Master Plan for generating “huge traction in terms of drawing political attention for accelerating progress in sanitation and ending open defecation.”vi

New technology is helping, too. In Vietnam, dirty water from a canal in the Mekong River is treated at a plant using a chemical-free process developed by Akvotek, an Australian company. The energy-efficient system provides at least 400 homes and 2,000 people in the southern city of Ben Tre with safe drinking water today, and is expected to do so for many years to come.vii

Big companies are also looking to SDG goals for guidance in forming their sustainability strategies. Among many others, Dutch brewing company Heineken has made commitments to reduce its use of water. In Indonesia, it has established a cross-sector alliance with UN agencies and partnered with an NGO to replant trees and restore land that is critical to the water supply and flood resilience of 30 million people.viii

Delivering on SDG6 will not be easy for Asia. But there is hope that, with the UN accelerator framework in place and the region’s governments, businesses and communities increasingly focused on sustainability, the chances of delivering clean water and sanitation for all are increasing.

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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.

 

Notes:

i   https://www.who.int/water_sanitation_health/publications/jmp-2019-full-report.pdf
ii  www.who.int/water_sanitation_health/monitoring/economics/en/
iii https://www.unescap.org/sites/default/files/publications/ESCAP_Asia_and_the_Pacific_SDG_Progress_Report_2020.pdf
iv https://www.who.int/water_sanitation_health/publications/jmp-2019-full-report.pdf
v  https://www.unescap.org/sites/default/files/publications/ESCAP_Asia_and_the_Pacific_SDG_Progress_Report_2020.pdf
vi  https://www.unicef.org/eap/sites/unicef.org.eap/files/2020-05/EAPRO%20WASH%20Results%20Report%202019_FINAL.pdf
vii  https://watersource.awa.asn.au/business/partnerships/akvotek-achieving-sdg-6-in-rural-vietnamese-village/?utm_source=SocialAnimal&utm_medium=referral viii https://www.theheinekencompany.com/our-sustainability-story/our-progress/case-studies/tackling-water-stewardship-challenge-indonesia

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Decoding the Needs and Preferences of Asia’s Next Generation of Wealth Holders

Decoding the Needs and Preferences of Asia’s Next Generation of Wealth Holders

Before the outbreak reaches pandemic level early this year, Asia has been one of the most robust regions when it comes to wealth creation. From China to India to Singapore, Indonesia and beyond, the number of wealthy individuals in Asia, and the corresponding sizes of their wealth, is nothing less than astonishing. As soon as the pandemic hit, almost everything ground to a halt. Expansion plans were put on hold, internationalisation strategies were redrawn, and Asia’s wealthy families had to recalibrate their long- and short-term plans.

In a recent report entitled Banking, Entrepreneurialism, and the Next Generation of Wealth Holders 2020 by BNP Paribas Wealth Management in Asia in collaboration with Campden Research, relevant data points were gathered to understand the key drivers and motivating factors at play with the ultra-high net worth Next Generation (NextGen) in Asia. One of the most important insights that has been gleaned in this comprehensive study is that the NextGen Ultra-Rich are an emerging generation of Entrepreneurs with great clarity of purpose and direction.

In recent years, families have had to start considering whether the next generation will get involved in family businesses – and, if so, how and to what extent – and how prepared the NextGen is to lead family wealth management.

In this context, there are two broad areas that call for examination: the degree of harmony that will likely be seen between the generations as they work more closely together, and how family engagement with financial service providers will likely evolve,” the report says.

In recent years, families have had to start considering whether the next generation will get involved in family businesses – and, if so, how and to what extent – and how prepared the NextGen is to lead family wealth management.

Indeed, the theme about harmony is an important one to tackle and issues around succession planning takes a primal importance. But of particular interest also is how the NextGen will engage with banks and financial institutions as their needs, educational and professional experience are quite different from their parents’. It is foreseeable that relationship-based banking that their parents have been used to will be replaced by transaction-oriented banking. Moreover, demand for greater digital services and access to more granular reporting would be required.

Next Generation Wealth Management

In uncovering insights from ultra-high net worth NextGen, over 100 individuals were surveyed and 10 were interviewed. This remarkably diverse group of NextGen, whose average age is 38 years, has an average family net wealth standing at US$640 million.

They are highly educated and come with a considerable amount of prior work experience; majority of them are already successful business owners in their own right with diversified interests in Finance & Technology. They are native to Asia but can best be considered as global citizens of the world.

A particularly striking theme that continues to emerge in the research is that while many of the NextGen have significant experience, they still value learning from their parents and on the job. “There is a palpable admiration amongst the NextGen for their parents’ operational know-how and business achievements, and a clear desire for and awareness of the complementarity of the knowledge / skills between the generations,” the report reveals. Some of the most notable findings of the report are the following:

NextGen believe technical and operational skills hold strategic importance

NextGen have a strong entrepreneurial drive and decisions are made with direct application in mind.  Among the NextGen surveyed, 48% are educated beyond Bachelor’s level and a third, in finance-related subjects. Some 48% have also obtained work experience in finance. Against this backdrop, many of them see a job in finance as a stepping-stone to launch to a stronger entrepreneurial venture. What appears to be a natural progression for them is to join the family business to work under the tutelage of the previous generation wealth creators. Given the technical skills that the NextGen possess, matched with the operational skillset that they will obtain running the family business, a potent advantage can clearly be established.

NextGen are usually involved in both the family business and wealth management

NextGen value the hardwork and expertise of their parents in running the business, hence, they are very open to learning from them. Among the respondents who were surveyed, 45% are involved in both their family business and investing their family wealth while 14% are involved only with the business. On the other hand, those that are involved only with investing stands at 31%.

A noticeable difference between sons and daughters of wealth holders is that sons are more likely to be involved with both the family business and investing the family wealth (50% versus 33%). A similar pattern has been observed for firstborn NextGen as against subsequently born (51% versus 33%) and the under 40 compared to the 40+ (52% versus 38%).

NextGen prefer evolution, not revolution

It is also particularly telling that for NextGen, the knowledge of financial markets between generations are seen as different and complementary. They don’t necessarily believe that one generation knows ‘more’ or ‘less’ compared to the other. As such, there is more harmony instead of tension between generations as the NextGen display an evident admiration for their parents’ business accomplishments. Moving forward, given NextGen’s educational and professional experience, and the relatively early stage at which families in Asia-Pacific stand in terms of wealth management, there is a palpable drive to push for greater professionalism. It is also predicted that investment focus will shift from public markets to private markets.

Of particular interest also is that the NextGen are likely to come with more technical expertise in finance and technology, a more global outlook and wider networks in the start-up community. Giving a more well-rounded view, the NextGen participants in the study also shared their views on the relative shortcomings of the older generation in financial matters, which is mainly around implementing a governance framework. This is followed by an observation that the older generation did not adequately diversify. For a third of the participants, they noted that their family would have benefited from professionalising financial management and further diversification.

NextGen see the value of digitalisation but human interaction in banking is still needed

It is clear that human interaction still holds great importance among the NextGen. Only a small fraction prefers digital over direct human interaction with bankers to the extent that they are satisfied with never physically going to a bank or meeting with a banker (5%). A vast majority of them said that while digital is preferred, some direct interaction is still wanted (72%). A smaller percentage (23%) indicated a preference for traditional, direct approaches to banking. Diving deeper into the data, it was also revealed that 9% of participants under the age of 40 were content with eliminating direct human interaction with bankers totally but none of the 40+ participants agreed with this. One NextGen interviewee shared this view: “Some things cannot be fulfilled digitally, including discussions about strategy and solutions. We will still require human interaction. Digital is more relevant to execution, trading.”

A particularly striking theme that continues to emerge in the research is that, while many of the NextGen have significant experience, they still value learning from their parents and on the job.

NextGen are interested in a range of banking services

It is easy to assume that because the NextGen’s educational background and technical expertise is more advanced, that there will be a very low interest in a range of banking services. The study revealed that this is not exactly the case as many of them indicated an interest in a range of banking services although, their opinions on which services they are willing to pay are quite varied.

About 81% of the NextGen said that they are interested in banks anticipating the need for and providing relevant forecasts. For example, some advice on foreign exchange markets that will affect the family’s business and investments. Roughly the same proportion (80%) said that they are interested in being viewed as an institutional client and being offered the associated services, including alerts and quarterly reporting. However, on both services, only 42% of those interested are willing to pay.

The biggest gap between interest and willingness to pay corresponds to the provision of more frequent granular reporting – in which 78% expressed interest, but only 25% of which expressed willingness to pay. On the other hand, 68% expressed interest in banks integrating technology into investment management – e.g., algorithmic trading – and 45% of them expressed willingness to pay.

“Some things cannot be fulfilled digitally, including discussions about strategy and solutions. We will still require human interaction. Digital is more relevant to execution, trading.”

NextGen see a shift in focus from public to private markets with banks playing a role

Looking into the horizon, it is apparent that the next generation of wealth holders is moving away from public markets. In terms of investment focus, the study highlights a growing interest amongst the NextGen in private equity and venture capital, and in direct investments, in particular.

The participants were asked about the role of banks in generating private market deal flow and, for the great majority, banks play some role (82%). This includes 52 people who said that banks play a limited role – i.e., that banks are and will remain one of many providers, but that the family still prefers third-party / sector specialist sources;  24 people who said that banks play an important role – i.e., because families find it hard to identify and structure deals themselves. Finally, it includes 6 people who said that banks play an imperative role – i.e., reflecting the bank’s fiduciary duty and the alignment of interests.

The Next Chapter

The next chapter of wealth management in Asia will be an evolution of how wealth is created in the previous generation. The next generation ultra-high net worth individuals must be meaningfully involved in ventures they are taking part in. Armed with technical knowledge of finance, expertise in family business activities, and global networks on the one hand, and an entrepreneurial drive and eagerness to pick up operational know-how, on the other, the NextGen can prove to be an invaluable asset for family businesses and family offices.

As such, it also goes without saying that banks must step up and ensure greater internal stability. The NextGen places greater emphasis on long-term relationship with the banks however, such relationships must go beyond a traditional banking social event calendar and move into a more professional aspect of banking relations. These include overall bank stability, including financial, structural, and operational stability. The NextGen want less movement of personnel within and between banks, including relationship managers and senior management, and consolidation of roles, so that clients interact with fewer bankers.

In addition, what’s clear from the study is that banks need to provide a holistic service offering technical expertise, consultation and tailored services. The NextGen want their point of contact to draw on and coordinate between different bank departments and regional offices. Ultimately, banks must greatly improve their capabilities. As one of the NextGen interviewee aptly puts it, “Banks have to take more time to understand their clients in terms of what their motivations and long-term visions are. The ones who do this will actually be supporting the business and will see more success.”

To download a full copy of Banking, Entrepreneurialism, and the Next Generation of Wealth Holders 2020 by BNP Paribas Wealth Management, pls visit https://bnpp.lk/nextgen

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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.

 

The Impact of US-China Relations on Wealth Management

The Impact of US-China Relations on Wealth Management

On 3 November 2020, the United States electorate will head to the polls to decide who will lead the world’s most powerful nation in the next four years. As Donald Trump and Joe Biden battle it out to be the chief architect and implementer of US foreign policy, one issue looms large, and unsurprisingly, a crucial talking point in the election: China.

Of particular interest by economists, as well as wealth managers around the world, are the issues concerning trade and investment.

In 2018, China saw a huge increase in tariff on imports to the US. This is a calculated effort from the Trump administration to force Beijing to reduce subsidies on manufacturing companies based in China and curb their difficult demands on US companies.

In January 2020, the two countries came to agreement by signing a trade deal which knocked back some of the tariff rates but failed to address the major issues. This was after an entire year of back and forth on tariff which considerably slowed and depreciated the economy on a global scale.

Nonetheless, Beijing has promised to increase import of US goods worth 200 billion dollars in the space of twenty-four months.

In the meantime, the US government is pushing to have American companies cease manufacturing and sourcing of materials from China. 

US Companies’ Reaction to Trade Issues

These new restrictions have predictably caused US companies untold tension and pessimism. Every day, the chances of the trade tensions reducing or ending grows slimmer because neither Beijing nor Washington are showing signs of relenting. None of the companies are looking forward to the threat of moving their companies over to the States.

The American Chamber of Commerce based in Shanghai conducted a survey and released the results of their findings. Ninety-two percent of the respondents agreed that they would rather keep their companies in China despite the persistent fracture in the US-China relations.

The survey revealed that over a quarter of these firms are aware that the dispute between China and US may last indefinitely. A year ago, only 17% agreed to that possibility. In 2019, 13% of the companies believed that the issues would be settled with three to five years, a number that has since increased to a fifth of the respondents.

However, about 14% agree that the issues will be over in about twelve months.

In a quote, AmCham Shanghai stated that, “What is likely underpinning this sense of negativity is concern about broader US-China relations.” An opinion that outlined responses from over three hundred and forty companies.

The said survey was conducted from June to July when the conditions seemed to worsen even after a trade agreement by both countries.

About 1400 companies in China participate in the yearly survey conducted by the American Chamber of Commerce in Shanghai, an NPO (Non-Profit Organization) that strives to bridge the thorny trade gap between the US and China.

Currently, relations between China and US have continued to sink to a historic low as they continue to disagree and punish each other from issues ranging from the Coronavirus pandemic to technological control.

Donald Trump severed the special trading relationship in July between US and Hong Kong. That privilege had formerly exempted Hong Kong from some tariffs. In additions, both countries made moves to shut down their consulates in Chengdu and Houston.

By August 2019, Washington issued a sanction to Chinese government officials citing that they undermined Hong Kong’s autonomy, with Carrie Lam – the leader – inclusive.

When suspicions rose that TikTok and WeChat could be used to spy on the US government, Donald Trump issued threats to ban the popular apps from the US.

While 32% of the respondents agree that the bad relationship between the countries is sourly affecting their ability to keep their staff, they know that leaving China is completely out of the question. Even with Trump’s order to leave the country in 2019, and in recent weeks, played around with the idea of “decoupling” the world’s largest economies.

These companies state that China still provides several benefits. For instance, some firms are focused on tapping into the large number of middle-class citizens. While many others rely heavily on China for manufacturing. According to 2020 AmCham survey, the number of companies that said China aided the growth of their profit margin increased from 9.4% to 32%.

In agreement to the above data, President of AmCham in Shanghai, Ker Gibbs said, “US businesses in China would like to see the two countries resolve their outstanding issues quickly and reduce tensions.” Gibbs stated, “A workable cooperative framework for the next decade would be a good place to focus discussions.”

The Long Term View

The relationship between US and China is reaching a dangerous point. The already fragile relationship is on the brink of total collapse and we could only hope that in the coming days, the relationship could improve for the better. People from all over the world are pinning their hopes that the coming 2020 US presidential elections will provide a pathway for calmer, more collaborative partnership between the two great powers. As a famous world leader once quipped: “The forces that divide us are not as strong as those that unite us.”

 

Image: Andrea Izzotti / Shutterstock.com

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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.

Taipei Fubon Bank’s Futuristic Wealth Management- ‘Smart Investments’

Taipei Fubon Bank’s Futuristic Wealth Management- ‘Smart Investments’

Banks & Financial institutions are increasingly deploying new technology to succeed in the age of technology. However, Taipei Fubon Bank’s vision is to use digital technology to make its clients succeed.  It has an intense focus on keeping Customers-First and ensuring that technology is used to deliver more effective, easier-to-use and faster financial services & solutions to customers.  Taipei Fubon Bank President- Roman Cheng- never gets tired of pointing-out that it is not about technology, it is about creating strong UVPs and delivering great customer experiences.

This approach has led to many innovative products in recent years that have been recognized not only for the latest technology but, more importantly, for popularity with customers and resulting high usage rates.  One of these innovative products is Taipei Fubon bank’s recent flagship offering for Wealth Management customers- ‘Smart Investment’.

Smart Investment platform helps customers make better financial choices by enabling them with financial data & digital technology.  Customers can use the ‘Smart Investment’ platform to create financial plans suited to their individual needs as well as help them decide how to maximize portfolio returns by using low interest loan to invest in higher yield investments. This innovative offering is already in use by about 18K WM customers– an impressive achievement for a new product in a highly competitive Taiwan market.

Taipei Fubon Bank has been leading the new trends in Wealth management & Private banking in the last few years; and has received several recognitions for its customer focus and use of technology.  Global Private Banking Innovation Awards 2020 (GPB Awards) by The Digital Banker recently recognized Taipei Fubon Bank with three major awards- the Best Private Bank, and the best private bank in AI & Big Data respectively.  Moreover, Taipei Fubon bank was adjudged ‘Highly Acclaimed’ in two more categories- Best Private Bank for Client Experience and Outstanding Technology Implementation (Back End).

“Taipei Fubon Bank is known for its tenacity in providing exceptional service to its customers. Using its core strength in technology to boost its business and serve its customers in a manner that provides great value, they have proven once again that they are second to none.”

The Global Private Banking Innovation Awards 2020 (GPB 2020) organized by The Digital Banker are highly regarded and valued in wealth management industry.  GPB Awards are judged by private wealth industry leaders and are aimed to identify and recognize the world’s best in class Private Banks, Family Offices and Wealth Managers that demonstrate elite levels of performance & creativity across Fixed Income, ESG, Structured Investments, Family Office Services, Discretionary Services, FX & Cash Management, Funds, UHNW, Islamic Finance and more. This year’s panel of judges include subject-matter experts known for their integrity and unbiased adjudication from companies such as Forrester, Protiviti and EY.

Power of AI/ ML for WM customers-‘Smart Investment’

Smart Investment platform is based on two major technologies.  Firstly the algorithms to generate & evaluate multiple scenarios and arrive at best choices for each individual customer.  The second is an automated platform using artificial neural network to detect customer repayment information & deliver timely alerts to customers.  ‘Smart Investment’ is a simple-to use but powerful platform that is able to assist all customers including those without any investment background to start on their financial management journey.

This app, the first of its kind in Taiwan, gives customers automated advice on multiple aspects of financial management. The goal is to provide relevant information to help clients in making sound financial decisions.  ‘Smart Investment’ integrates to mobile and online banking channels and constantly reviews customers’ data such as loan amount, interest payments, remaining instalments, etc.  Smart Investment is then able to recommend the best options available for each customer.  In addition, the alert system built into the Smart Investment platform gives Taipei Fubon Bank the ability to detect important issues that need urgent attention.

Taipei Fubon Bank’s nearly 18,000 customers with AUM of USD 1bn are already making better financial planning decisions through this ‘Smart Investment’ app.  These usage numbers continue to grow with more & more customers adopting the smarter way to investing!

‘Smart Investment’ is a digital application that even assists customers without any investment background to start their financial management journey.

Prosperity Across Generations 

In 2018 Taipei Fubon Bank launched the Exclusive Banking Group- a new client-centric service model catering to top-tier clients.  Based on results of customer research & insights from HNW Private Banking customers, a unique brand was created– “Prosperity Across Generations”.

Taipei Fubon Bank believes that HNW clients need the same level of service & products as corporate clients and aims at serving HNW individuals as “corporates”. Increasingly Bank’s high net worth clients, just like corporates, face complex challenges for asset and wealth management. Simple services like family asset management are necessary but no longer sufficient for the needs of these HNW clients.

Taipei Fubon Bank assists high net worth clients using a comprehensive service approach that includes both the “upstream” and the “downstream” opportunities to offer a complete investment ecosystem to its customers.

In another first for any bank in Taiwan, Taipei Fubon Bank collaborates with Lombard Odier, a 224-year-old Swiss private bank, to provide the world’s best private banking services to its customers.  With client-centric focus, investment in technology and expertise of its well-trained bankers, Taipei Fubon Bank has rapidly developed itself into a world-class provider of private banking services exclusive clients in Taiwan.

“Prosperity Across Generations requires wealth management with relevant information, timeliness and global perspectives for our clients. Taipei Fubon Bank is focused on providing these to its customers so that they can focus on their own businesses and families.”

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>> To download the print magazine version of this article, click HERE.

>>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.

Do tech-based investments present good opportunity for the UHNW segment today

Do tech-based investments present good opportunity for the UHNW segment today?

For several years now, and right before the onset of the pandemic, the tech market has continuously received particular attention from prominent investors.  It was pretty standard for individuals to make their investments directly to companies, or via their branch offices. In fact, a report compiled by Campden Research from 360 family offices reveals that technology is one of the key sectors they prefer to invest in.

Clearly, the pandemic is gradually creating a shift in the way, and manner, people respond to technology. Things that would ordinarily have been done offline are now being fulfilled via technology. And a more significant number of people are harnessing technology for specific purposes.

Tech companies in the private market are now being considered a huge investment opportunity by the UHNW segment. And education happens to be on top of the list of lucrative tech-based investments. As a matter of fact, the pandemic has led virtually every learning institution to shift their activities from physical, to virtual classrooms. And UHNW individuals will not let the opportunity pass. Snapask, a prominent tutoring software that kick-started in Hong Kong, was able to raise a sum of $35 million “to expand in Southeast Asia.” According to a TechCrunch report, “the company now has a total of 3 million students, with 1.3 million who registered over the past twelve months. Over the past year, 100,000 tutors have applied, taking Snapask’s current total to 350,000 applicants.”

The pandemic is gradually creating a shift in the way, and manner, people respond to technology. Things that would ordinarily have been done offline are now being fulfilled via technology.

Online shopping and food delivery platforms are also experiencing the bright side of the pandemic. They are benefiting hugely from meeting the needs of people who are working remotely. Recently, a Korean grocery startup Kurly has raised $150 million in their recent financing round while an Indian shopping platform BigBasket was able to raise $60 million as it continues to scale its business.

Other sectors of technology currently considered by investors encompass the standard tech features that typically accompanies the general use of technology. Cybersecurity, IT services, and enterprise solutions fall into these sectors. Investors are actively considering these respective companies as they are equipped to withstand any degree of economic decline, according to an industry report. Their functions make up essentials in businesses and organizational workflows.

It is further noted in the report that the tech market is currently outgrowing other industries that have always been stable over the years. Companies who are likely to excel in the current global economy are those who proffer technological solutions to business growth and human resource expansion.

In deciding on the company to make investments in, financial institutions are guided by a set of processes to evaluate organizations. First, they review the company’s most recent audited financial records. Then they go on to check the validity of agreements and contracts by interviewing clients and stakeholders.

These evaluations are crucial because every investor wants to be sure that every step has been satisfactorily checked off before committing their assets to companies. So that irrespective of market conditions, investors do not leave out any rule of investment. Instead, they are to follow every due diligence of investment structure to attain a well-distinguished asset portfolio.

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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.

 

Wealth Management How to Improve Business Resilience in Times of Crisis

Wealth Management: How to Improve Business Resilience in Times of Crisis

In this period of uncertainty, it should become a norm for wealth managers to check the feasibility of their developmental strategies. Further actions should also be put in place to ensure that clients have their needs met adequately. 

Coming up with alternative courses of action must be part of the firm’s strategy. Just in case things do not bode well with the established procedures of a wealth management firm, there is a need to review the firm’s yearly goals. They are to plan for a decrease in client participation in addition to financial strategies to sustain anticipated drag in customer engagement. 

In critical times such as the present crisis, wealth management firms must also take essential measures to ensure the continuity of business operations. A group of crisis managers can be set up to represent every important sector of the business. To fully assess the impact of the pandemic on business operations, customers and staff should be analysed by a crisis group. Strategies to keep the firm in business in the face of a global crisis should be well in place.

Finally, as remote working becomes the only viable option for businesses to operate in this period, clients’ data confidentiality becomes a highly significant issue. Staff should be trained on the best ways to work securely from home to avoid compromising clients’ details online. For instance, access to client data should only be provided as necessary and proper access control system must be established. In addition, virtual interactions with client data should be confined to centralized servers only.

As remote working becomes the only viable option for businesses to operate in this period, clients’ data confidentiality becomes a highly significant issue. Staff should be trained on the best ways to work securely from home to avoid compromising clients’ details online.

Enhance Digital Adoption Or Else…

Given the global practice of social distancing and isolation, wealth managers may not be able to schedule physical meetings with clients and potential customers. They may also find it challenging to find new investors. As such, it becomes crucial that they revisit their online and digital policies.

Digital channels of interaction with investors should be reinforced and integrated into the firm’s key strategies. This is to enable open communication between clients and the firm. Managers who are yet to embrace digital channels to reach out to clients – and potential clients – may get to encounter significant challenges. 

It’s inevitable that more organisations will speed up their digital transformation. In this period, wealth management firms cannot afford to be left behind. And as activities related to digitisation start to ramp up, factors related to fraud, cyber security, privacy and data integrity must be top priority.

Besides having online access to minute details of their portfolio, clients should also be able to communicate seamlessly with their relationship managers. They should further be given access to digital tools that allow to issue directives concerning their investments. Video call tools, email, and instant messaging platforms – all in an integrated app or tool – are essential to help clients keep in regular touch with their relationship managers no matter what timezone they might be in.

The impact of the current crisis to wealth and investments cannot be avoided, but with the right strategies, a crisis can turn into huge opportunity.

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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.