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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 

J.P. Morgan Private Bank Impeccable Ideas for the World’s Billionaires

J.P. Morgan Private Bank: Impeccable Ideas for the World’s Billionaires

The trusted name in stability and prudent management has further cemented its stature in the echelons of private banking’s best when it swept major awards at the recent Global Private Banking Innovation Awards 2020 (GPB Awards) organised by The Digital Banker. J.P. Morgan nurtures strong relationship with 50% of the world’s deca-billionaires, or those who have in excess of $10 billion in wealth. Its focus on customised solutions and ideas to help manage the financial situation of their clients has helped deepen its relationship regardless of market conditions.

Reflecting this outstanding reputation are the prestigious awards received by J.P. Morgan Private Bank (JPM PB) at the recent Global Private Banking Innovation Awards 2020. The awards include:

  • Winner, Best Private Bank Singapore
  • Winner, Best Private Bank Asia
  • Winner, Best Private Bank – North America
  • Winner, Best Private Bank for Client Experience
  • Winner, Best Private Bank for Digital Client Communication
  • Winner, Most Influential Female Leader, Asia – Kam Shing Kwang
  • Highly Acclaimed, Best Private Bank Hong Kong
  • Highly Acclaimed, Best Private Bank for UHNW Clients

The Global Private Banking Innovation Awards 2020 (GPB 2020) organised by The Digital Banker is the world’s most trusted and transparently judged private wealth awards. GPB Awards exists to identify the best of the best in ESG, Structured Investments, Family Office Services, Discretionary Services, FX & Cash Management and more.

Judging this year’s awards are subject-matter experts known for their integrity and unbiased adjudication from companies such as Forrester, Protiviti and EY. Previous year’s judges include PwC, KPMG, and Fuji Xerox.

“J.P. Morgan Private Bank always aspires to be the best at what they do. Everything starts and finishes with the strengths of their investment performance coupled with excellent client experience and constant innovation to support growth. At the same time, it builds on its digital and mobile capabilities, providing human and digitally enhanced advice. Needless to say, J.P. Morgan has all the bases covered,” said Nirav Patel, Managing Director at The Digital Banker, the organiser of the Global Private Banking Innovation Awards during the awards presentation.

J.P. Morgan nurtures strong relationship with 50% of the world’s deca-billionaires, or those who have in excess of$10 billion in wealth.

Exceptional Digital Client Communication

J.P. Morgan Private Bank provides clients and invited guests with written and video content via a proprietary platform – Ideas & Insights – to inform and educate. The aim is to give its readers perspectives which will help them shape their views across a range of topical wealth management matters. Whether it be macro opinions, advice on talking with children about wealth or support in their philanthropic journey, Insights is there to inform and educate. In 2019, over 1,000 pieces of content were shared with its readers via Insights.

In addition, the Private Bank aims to communicate with clients in the way in which they choose. The J.P. Morgan Private Bank WeChat channel and LinkedIn channel share commentary with followers on current trends and themes that are relevant to the management of their wealth. Using both videos and written articles, followers are given insights from J.P. Morgan experts. In 2019, the average content engagement rate of its WeChat official account reached over 60%, much higher than the average of WeChat service accounts (at 8%). Since the launch of the two-way WeChat communication in February 2020, which enables its advisors to securely chat with clients via WeChat platform, over one third of the Bank’s Chinese clients are now connected with JPM PB via this new e- communication channel.

In the broader areas of technology and innovation, JPM PB is building a digital wealth offering that provides clients access to proprietary tools that complement their personal relationship with an advisor. Artificial intelligence, big data and machine learning are helping the team reduce risk and fraud, upgrade its service offerings, improve underwriting and enhance marketing across the firm.

Overall, the shared technology infrastructure decreases costs, enhances efficiency and improves the client experience.

Standout Client Experience

Aside from continuous enhancement of its digital engagement with clients,  JPM PB also hosts an annual flagship technology-focused event in China that brings together entrepreneurs and investors from around the world to discuss investments in topical technology areas such as artificial intelligence, cybersecurity and other macro trends.

The team at JPM PB is building everything digital while recognising the unique needs of its clients – from onboarding to idea generation to better support and service. While its trusted advisors will always be the center of client relationships, technology has helped the Bank drive engagement, deepen connections, improve efficiency, and modernise processes which increase value to clients and enhance their banking experience.

Across the company JPM PB have thousands of employees who are data scientists or have advanced degrees in science, technology, engineering, and math. Of the nearly 50,000 people in technology at the company, more than 31,000 are in development and engineering jobs, and more than 2,500 are in digital technology. These talented individuals are focused on driving change across the company and leveraging data to drive enhanced solutions for clients.

Most importantly, the importance placed on privacy and security is beyond compare. J.P. Morgan spends an enormous amount of resources to protect all of its clients from fraud, cybersecurity risk and invasion of their privacy. As part of this, a client education team within the Bank are tasked to consistently educate customers about privacy issues, which will become increasingly critical for all industries as consumers realise the severity of the problem.

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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: Shutterstock.com / Hitman H

How J.P. Morgan Helps Asia's Ultra-Rich Families Plan for Digital Disruption

How J.P. Morgan Helps Asia’s Ultra-Rich Families Plan for Digital Disruption

Even before the phenomenal blockbuster Crazy Rich Asians hit the cinemas middle of last year, Asia has already been attracting tons of attention for its growing number of wealthy populations. Two of the most populous nations on earth are in Asia – China and India – and are both minting millionaires and billionaires faster than ever before. Add to that, the rapid technological advancements are creating huge advantages for businesses run by Asian families, allowing them to directly compete with their Western counterparts. The result is an unprecedented explosion of opportunity for wealth creation.

The growing number of Ultra-High Net Worth Individuals (UHNWI) in Asia is certainly an indication that a lot of correct decisions were made by the current generation of business owners. However, faced with digital disruption brought about by things such as big data, artificial intelligence (AI) and fintech, how are the current generation of business owners preparing the next generation in line? How are the next generation in line going to confront technological disruption in the family business? Is proper succession planning in place? The Digital Banker investigates.

Asia – Home of the Ultra-Rich

The Asia Pacific region is home to the world’s richest families. According to a recent study by UBS and PwC, the region had 814 billionaires at end-2017, an increase of 14% from previous year. This accounts for 38% of the global billionaire population. It’s also interesting to note that China’s billionaire entrepreneurs are not only leading their country’s economic transformation but that of Asia’s as well. In fact, many Chinese entrepreneurs are challenging Silicon Valley, producing many unicorn companies (companies with a valuation of US$1 billion or more) that rival that of the United States’.

Fueled by China’s economic rise, the net worth of APAC billionaires grew by 32% to USD 2.7 trillion in 2017. With this trajectory, it is projected that they will be wealthier than their American counterparts in about three years or less.

After China, India and Indonesia both provide a conducive atmosphere for wealth creation. According to the same study, “India’s billionaire wealth increased by a substantial 36% in 2017 at USD 440.1 billion. The number of local billionaires increased by 19 to 119. In Indonesia, billionaire wealth increased by 37% to USD 72.5 billion, while the number of billionaires stood at 20.”

In terms of High Net Worth Individuals (HNWI), or individuals having investable assets of US$1 million or more, Asia Pacific remains a global powerhouse. A report by Capgemini reveals that APAC generated 41.4% of all new global HNWI wealth and is on track to surpass US$42 trillion in HNWI wealth by 2025.

High Net Worth Individuals (HNWI), or individuals having investable assets of US$1 million or more, in Asia Pacific remains a global powerhouse.

Biggest Technological Trends That Will Disrupt Business

Over the last ten years, the scale of technological advancement has increased manifold. Brought about by the democratisation of data and hyper speed connectivity, we are now faced with a uniquely different set of challenges – or opportunities, depending on how you look at it – that will surely have an impact on how family businesses are being ran. In fact, according to a whitepaper recently released by J.P. Morgan entitled “Embracing Data, Digital and Disruptions: Planning ahead for Succession”, it revealed that “two thirds of family businesses indicate that technology advancement has altered business operations in the last ten years.” Looking at the current technological landscape, the next ten years would be absolutely game-changing.

Big Data Analytics

Big data refers to large sets of data obtained from multiple sources such as customer databases, business transactions, usage patterns, medical records and activity logs. Because of efficient management of data, companies can take advantage of operational efficiencies resulting in reduced costs and improved profitability. The challenge is with the democratisation of data, valuable information can now be easily obtained, and using the right tools, can be harnessed for monetisation purposes. Businesses that used to benefit from the exclusive possession of valuable data will now find themselves losing their leverage. In addition, due to existing laws and regulations, managing large volume of data now require significant infrastructure investments to ensure privacy and safeguards are in place.

Artificial Intelligence

Many business owners know that artificial intelligence (AI) has the power to alter the way they do business, either positively or negatively. Standing still, when it comes to AI adoption, is no longer an option. The bigger question is: HOW. Some organisations are slowly trying to adopt through the implementation of chatbots and other similar initiatives. But this is barely scratching the surface of AI. How will you define your AI strategy? How can you find AI-literate staff to fill in key positions of your organisation? How do you ensure the reliability and trustworthiness of your AI? These are just some of the questions, whose answers will create a cascading impact in the way wealthy families run their business.

Fintech

Perhaps one of the most consequential technologies we see of late is Fintech. A portmanteau of finance and technology, fintech represents a collision of two worlds that are locked in a tight embrace creating unprecedented disruption and synergies. We now see traditional banks being disrupted by neobanks or digital banks, whose customers don’t need to visit a physical branch to perform regular banking transactions. We see the rise of digital payments and how this mode of payment cuts away the middlemen. We also see governments recognising the growing impact of fintech in their economies and in response, creating laws and incentives to ensure its smooth implementation. The businesses of tomorrow will be impacted by fintech, one way or the other.

J.P. Morgan Surveys Present and Next Generation of Ultra-Rich Families

J.P. Morgan Private Bank, the industry’s most illustrious name when it comes to financial advice and solutions for wealthy clients and families, ran a survey of the current and next generation of business owners. The respondents span across 10 different countries in Asia whose annual turnover is less than $50 million to more than $1 billion. Its findings revealed that:

  • Decisions concerning the main family business continued to be made within the family: by the head of the family (36%), followed by the company board or a selected few (34%). Businesses with annual turnover of $1 billion and above were disinclined to entrust non-family executives with decision making powers.
  • Just over half (55%) of the next generation feel ready to confront technological disruption in the family business; amongst the next generation who did not feel they were prepared, more than half (56%) say they lack experience.
  • A large majority (87%) of current business owners say the family business has already experienced changes in the last decade; 85% felt the changes have been positive
  • A majority (80%) agree the family business will experience tech disruptions in the next ten years and a significant 92% in the 41-60 years age category agreed.
  • Technological disruption experienced in the last decade, and expected ahead vary across sectors: financial services, industrial, primary industries (mining, agriculture) were seen to be most disrupted; whilst real estate and construction, were seen to be least disrupted.

The two most cited priorities for how the next generation plan to restructure their family business are: investing in new technologies and professionalising management. For respondents from Southeast Asia, geographical expansion was a high priority, second only to investing in new technologies.


More than 50% of business successors are ready for future technological disruption. However, their self-rated readiness is a tad more pessimistic than current business owners, 67% of whom were of the view that the next generation leaders are ready for the future of technological disruption.

Two thirds of family businesses indicate that technology advancement has altered business operations and communications in the last ten years. A vast majority (87%) of the current generation of business leaders agree that the family business has changed in the way it functions in the last ten years, compared to 57% of the next in line business owners, an overwhelming majority (85) felt technology-led changes have been positive.

The most common cited outcome were: improved efficiency (75%); streamlined workflow (67%), higher productivity (57%), increased revenue and profitability (42%).

Two thirds of family businesses indicate that technology advancement has altered business operations in the last ten years.

Next 10 Years: 4 in 5 expect significant change

Four in five family businesses say they expect to experience “significant change” to the way their business runs due to technological advancements in the next 10 years. The respondents of age 41-60 years old were most inclined to agree, with 92% of this cohort holding this view, compared to 75% under 40 years old, and 79% above 60 years old.

Establishing Trust to Safeguard the Future

While wealth in Asia is still relatively low today compared to other regions such as Europe and North America, it is only a matter of time before the situation gets totally reversed. As the number of ultra-high net worth families in Asia continue to grow, and their investment needs become more complex which include multiple jurisdictions, the question of succession planning becomes all too important.

Succession planning is a long and complicated process. And while families realise the importance of adopting a holistic approach, the conversation must start early to create the life and legacy that you envision.

In Asia, Singapore remains one of the top financial and legal centres hence, the demand for trust companies, whose sole function is to administer wealth planning for succession, is on the rise. Just recently, J.P. Morgan announced the launch of J.P. Morgan Trust Company (Singapore) Pte. Ltd. (JPMTC SG), which will support J.P. Morgan Private Bank’s clients and their families in Asia.

“With the establishment of JPMTC SG, we will be in a better position to support clients who have complex wealth planning needs and serve a wider range of clients in one of the fastest, wealth-generating hubs in the world,” said Kam Shing Kwang, Chief Executive Officer for J.P. Morgan Private Bank in Asia and Vice Chair of Investment Banking for Greater China.

Ethan Chue, Head of J.P. Morgan Trust Company (Singapore) Pte. Ltd. added that, “By having a presence in Asia, we can service our clients and their families in the region more efficiently, and be more proactive in working with them to anticipate changes and plan for succession to future generations. It is important to address business and family needs in conversation, to get the structures right, and to work with a professional in order to get unbiased views.”

Building a legacy is a tall order. As the world evolves and technology continues to flourish, the amount of disruption these will create to your business will depend on how prepared you are in planning for the future. Like a double-edged sword, technology can enable you, or destroy you. It all depends on how you wield it and which team will be by your side, in order to emerge successfully. It’s absolutely no crazy thought that technology, harnessed correctly, can keep anyone crazy rich for a long time.

Succession planning is a long and complicated process. Conversation must start early.

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How are the next generation in line going to confront technological disruption in the family business? Is proper succession planning in place? The Digital Banker investigates.
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