Hugues Delcourt of ABN AMRO Private Banking outlines the various challenges that private banks face in trying to differentiate themselves in Asia, and looks at what is required to do so.

Date: Mar 2012

Tags: Value proposition, Strategy, Growth, Differentiation, Regulation

• Growing a private banking business in Asia has for many organisations been more difficult than they had first anticipated, and certainly more costly than they would have hoped
• By listening more to clients and looking to deliver value through a client-service, team-based approach, growth can be quicker than it has been in the past
• To further add value to clients in the region requires going back to basics
• Given the regulatory and compliance challenges in today’s environment, it is vital for every private bank to ensure that the interests of individual clients are not only respected, but also protected

According to Hugues Delcourt in an interview, growing a private banking business in Asia has for many organisations been more difficult than they had first anticipated, and certainly more costly than they would have hoped.

There are several reasons why they have faced these difficulties, he explained.

First, said Delcourt, is the high level of competition, with every good private bank globally looking for market share in Asia.

Secondly, he added, banks haven’t listened as closely to their clients as they should have.

And thirdly, 80% of the wealth is not held in the hands of private banks, he said, but rather in retail banks and other places.

It would be foolish to believe it is possible to achieve fast growth in private banking in Asia, said Delcourt, adding that by listening more to clients and looking to deliver value through a client-service, team-based approach, growth can be quicker than it has been in the past.

Adding value for clients

To achieve something different for clients, Delcourt said he believes this is possible through a combination of ABN AMRO Private Banking’s history and experience in the region, with the firm’s product and services platform, and the desire to provide a team approach to servicing clients.

To further add value to clients in the region requires going back to basics, he said.

This means spending more time with them and listening to their needs and how they would like their advisers to help them, he explained.

Wealth structuring, for example, is something which is now at the forefront of the concerns of Asian families.

Dealing with a new landscape

Given the regulatory and compliance challenges in today’s environment, it is vital for every private bank to ensure that the interests of individual clients are not only respected, but also protected, said Delcourt.

There are various ways to ensure this, he added, saying that different regulators around the world adopt different strategies.

While this is no perfect solution, Delcourt said that it is important to keep in mind that private banking – provided it is above a certain threshold – shouldn’t be treated in the same way as retail banking.