Ramnath Krishnan of HSBC Private Bank discusses the firm’s objectives and ambitions in India, explaining the strategy it is pursuing to achieve these and at the same time overcome the challenges it faces.
Date: Oct 2011
The bank’s primary focus, he said, is to address the wealth management needs for onshore Indians. Initially, it focused on getting its IT in place, as well as the systems and processes, and since mid- to-late 2008 it has seen steady growth in the business.
The bank is focused on making this a material business in the next three to four years, said Krishnan.
The strategy is essentially three-fold. First, said Krishnan, is to add four to five extra locations, or geographies, within the country by expanding into key new cities in phases over the next three years.
Secondly, he explained, is to increase the bank’s share of wallet with its current customer base. And thirdly, is to develop better synergies in-house with the wholesale banking functions within HSBC, he added.
Delivering a differentiated offering
From Krishnan’s perspective, the products available at the top few private banking players in India are broadly similar, which to some extent is a function of the regulations in the country in terms of what we can and can’t do, as well as a function of the platform the firms are operating out of.
For example, for organisations that are part of a commercial bank, he said they are bound by guidelines specified by the central bank, and if they operate out of a non-bank finance platform, then they are governed by a different set of regulations.
As a result, Krishnan said he needs to focus fundamentally on the credibility of the bank’s advice, which he said he believes is probably the single-biggest pull factor as far as clients are concerned.
The single-biggest challenge Krishnan said he faces is getting the right people. It is a finite market in terms of the number of people who are out there and who fit the profile of those individuals the bank wants to hire, he said, which equates to people who have been in this industry for a number years.
That there are a number of other wealth management firms looking to enter the market compounds the problem because there are many competitors eyeing the same resource pool, said Krishnan.
To address the challenge of finding enough people to grow yet still ensure a consistent and high quality offering, therefore, Krishnan said the efforts in this area are two-fold.
First, is retention of the good people the bank has, he said. While this isn’t always easy, it’s less of a challenge than the second thing the bank does – which is trying to make sure the people it hires are those of the right quality with the right skill-set.
Yet, if any manager is honest, said Krishnan, they would admit that even if their requirements or pre-requisites are well-articulated, nobody can get every call right. The important thing is, however, that if there are any mistakes with the calls the bank takes, it acknowledges these and deals with them quickly in order to remove them from the system.
Robust front-office controls
According to Krishnan, the processes and controls are the same as those which exist as part of HSBC Private Bank globally.
There are various checks and balances in the system which get continually tested, and this is something Krishnan said he needs to have to give him comfort.