Albert Chiu of EFG Bank explains the firm’s value proposition and offering in Asia, including why its business model is a key differentiating factor and how he intends to leverage that going forward.
Date: June 2010
Tags: Value proposition, Differentiation
According to an interview with Albert Chiu, EFG Bank’s value proposition in Asia is its unique business model and high-quality private bankers – which it calls client relationship officers (CROs).
EFG is a pure-play private bank with a long-term commitment to Asia’s wealth management market, explained Chiu.
It therefore provides a conducive environment for senior and experienced private bankers to join the firm as partners, rather than as employees. In this structure, they have a high level of freedom and flexibility to do what they think is best for their clients. The bank also provides a network of offices in Asia so that its bankers have on-the-ground support in all the major cities, explained Chiu.
To find the best solutions for its clients, he said there is an open-architecture approach where the bankers look at all product providers. At the same time, there are no sales targets imposed on the CROs, said Chiu, enabling them to act as independent financial advisers vis-à-vis sales.
Adding all these elements together means EFG can get mature, senior and experienced private bankers, and they tend to stay, said Chiu.
A supportive, centralised platform
To support the private bankers and ensure consistency in the quality and standards of their service, it is critical to maintain a centralised platform, staffed by experienced industry practitioners.
For example, said Chiu, there is centralised managerial support to identify business opportunities and recruit the right people to provide the marketing activities.
There is also centralised support to identify, screen and select the right products and solutions from the marketplace for clients, he added.
At the same time, a centralised compliance function ensures all activities are regulatory compliant. And credit support is centralised, too, to make sure the bank is well-protected while it extends credit to clients.
In addition, said Chiu, operations are centralised to ensure all transactions are handled and settled professionally and efficiently.
A winning business model
According to Chiu, EFG has a winning business model.
The entrepreneurial spirit of the bank is key to this, and Chiu said EFG encourages its private bankers to be innovative when serving clients’ needs.
The bank also encourages ownership of the business, so its CROs feel that they own their clients and should put them as the top priority.
Challenges of employing experienced bankers
Chiu said EFG is selective in hiring CROs, especially with the bank’s model granting them a lot of freedom in how they serve their clients.
While there is a shortage of experienced, mature and talented private bankers in Asia, he said EFG has been able to lure a lot of the individuals in the market which do fit this profile.
At the same time, Chiu said he is pleased with the bank’s retention rate.
This is shown by the pace of growth of EFG in Asia. In the last 10 years, he said the bank has grown from three people to over 400 staff, including around 170 private bankers, most of whom are relatively senior and experienced.
The turnover rate is close to zero, said Chiu, despite the ups and downs of the market.
A strategic partnership with Commerzbank
More recently, Chiu said EFG started to work closely Commerzbank to take care of the best interests of the German bank’s clients.
From time to time, he explained, some banks make strategic decisions to focus only on certain parts of their business.
As a result, in this deal, he said Commerzbank decided to transfer its private banking clients, as well as its employees, to EFG.
