Banks expect to more than double client assets.
If growth of assets under management (AUM) is the appropriate measure, private banking and wealth management in the Asia-Pacific region are in the best of health. Averaging content from various data providers indicates that AUM in the region grew by $400 billion in 2023 after two years of contraction.
Consultancy firm Accenture recently reported that Asian wealth management firms aim to double their AUM to $260 trillion by 2026. At the current pace, this is achievable.
However, the regional industry struggles with how its firms differentiate themselves. Most offer well-designed client interfaces, AI-powered portfolio management, and big data analysis. They also offer product access to liquid public markets, from global fixed income and equity to mutual and exchange-traded funds.
Innovative digital superiority and universal bank heft will determine which bank wins the individuation race. The winners can also access superior research, private deals, and a gold-plated front-office talent bench.
Best Private Bank: DBS Private Bank
DBS Private Bank’s relationship management team has a stellar reputation, backed by its “One Bank” business model whereby the front office can draw on the universal bank’s myriad of capabilities, not least its research capacity and the bank’s “phygital” approach of combining digital transactions with face-to-face interaction.
The data points are superlative: AUM grew at a compounded 10% annual rate from 2017 to 2023; the private bank has a scant 43% cost-to-income ratio versus the industry’s average of 60% to 80%; and total wealth management income rose by 35% last year, boosted by a 24 billion Singapore dollar (about $18 billion) inflow of net new money.
DBS has made extraordinary strides as a financial institution over the past decade. If the Asian growth dynamic plays out to deliver the Association of Southeast Asian Nations as the world’s fourth-largest economic grouping by 2030—after the US, Europe, and Northern Asia—as is widely forecast, then the bank’s seemingly relentless march will not abate.
Best Private Bank For Sustainable Investing: Bank Of Singapore Private Bank
A subsidiary of Singapore-based OCBC, Bank of Singapore (BoS) can leverage the group’s approach to sustainability and environmental, social, and governance (ESG) concerns to its advantage.
OCBC has invested SG$30 million since 2021 to launch a suite of sustainability training modules. That year, BoS was the first private bank in Asia to add ESG factors into assessments of loan amounts and focus on MSCI-rated funds with an ESG AA scores and above.
In 2022, BoS co-chaired an Association of Banks in Singapore task force to produce the city-state’s first sustainable investment guidelines. Last year, it was the first private bank in Singapore to sign the Singapore Stewardship Principles for Responsible Investors.
BoS is implementing a suite of ESG assessment tools that will add a sustainability dimension to clients’ investment portfolios through ESG ratings and scores. This will enable the bank’s front office to assess ESG performance data based on MSCI’s ESG ratings.
Best Private Bank Digital Solutions For Clients: ICICI Securities
The bank describes itself as a “digitally led and knowledge-driven financial services firm.” ICICI Securities offers multiple delivery channels, including its app and website, and the ICICI Direct digital investment platform, digi-assist, equity relationship manager, wealth manager, and partner independent financial associates.
ICICI created a “data lake” and analyzes data through multiple analytical tools. Use of execution algorithms allows order slicing and averaging within a digital open-architecture integrated platform. Tools include a watchlist and charts-led trading ecosystem, tableau dashboards, and heat map insights.
Last year, the bank moved an independent part of its trading platform to the cloud to gain the bandwidth and scalability necessary for business expansion, utilizing the capability of Amazon Web Services, and ensuring that the data remains in India per regulatory requirements.
“We aimed to move much faster—scale and adapt at speed to develop new digital services … to execute thousands of trades in seconds,” says Subhash Kelkar, former chief technology and digital officer at ICICI Securities in Mumbai.