7. Global Private Banks Seek Stability and Evolve
In Aite Group’s survey of 20 wealth management firms across Asia, it found a common sentiment of uncertainty surrounding the U.S. trade wars with China and the anti-government protests in China. Private clients are watchful of possible risks in regions under certain jurisdictions. These events are creating instability in China and its economic jurisdictions. High-net-worth and ultra-high-net-worth clients are moving portions of their assets to markets such as Singapore, Taiwan, South Korea, and Japan, where there are more wealth management services and more stable economies to “mitigate jurisdictional risk.” However, Aite doesn’t expect a “capital flight from Hong Kong” to occur in 2020.
Instability such as what’s occurring in Asia can present an opportunity for wealth management firms with a presence across that continent. Aite analysts report that booking centers could open new accounts for clients in other parts of Asia “thus showcasing their strength and potentially gaining new assets.”
Increasing regulation, new technology, and changing customer expectations have lead to an unstable market. The pressure has forced banks to “sharpen their business” according to Wally Okby, a senior analyst at Aite. He foresees banks hiring relationship managers and advisory personnel in target markets to better support clients. Okby also thinks banks will try to bolster organic growth in strategic regions. As for investment solutions, the year ahead may see banks install “investment solutions teams” as a support to their revenue generation. They’ll also become more accepting of crypto assets in the wealth management channels. Two banks in Switzerland, Mark Baumann and Falcon Private Bank, have already begun to accept crypto-generated funds. On the corporate management side, departments will focus on banking platforms and operating models that are modern and allow the bank to scale.