Stephan Repkow, chief executive officer, private banking, at Union Bancaire Privee (UBP) in Asia, explains the firm’s business model and approach, and discusses how it is positioning itself in Asia to take advantage of the many opportunities it sees – but in a sustainable way.

Date: May 18, 2012

Tags: Value proposition, Strategy, Growth, Differentiation

This comes down to our DNA. We are a Swiss boutique private bank which was founded 43 years ago by Edgar de Picciotto, who is still chairman of the firm, with his son, Guy de Picciotto, as the current chief executive officer.

So having the 1st and 2nd generation of a single family at the helm of the bank and developing the franchise over the last four-and-a-half decades has created and entrenched a very strong entrepreneurial spirit.

It is particularly important when entering a new private banking market such as Asia to be entrepreneurial, and be able to adapt to various market situations and be relevant in the various segment of the market in which we want to provide our wealth management offering.

How does your entrepreneurial spirit play out in practice?

The fact that we have a family behind UBP helps to make us close to most of our Asian clients, given that many Asian high net worth (HNW) individuals are entrepreneurs who take a family-led approach to running their businesses.

What is the value that you bring to clients?

Being a pure-play private bank, without in-house investment, corporate or retail banking operations, means we are unconstrained and unbiased in terms of the solutions we offer to our clients.

We strongly believe that we need to spend time to understand what our clients need. We don’t go to them with a pre-conceived idea of what they need to invest in or what we think are the right products for them.

To deliver our offering, we know clients are multi-banked, so we spend time with them to identify any gaps. We then look to help them articulate the relevant investment opportunities for them and then execute these with the best service providers available in the respective areas.

Everybody talks about having an open architecture set-up. We don’t opt for this because we think it’s an accessory, but because it is a necessity – we need to partner with the best investment banks, trust companies and other service providers in order to provide our clients with the right solutions. We therefore take a bottom-up approach to what our clients need, rather than being top-down or product-push.

Only then can we be the trusted adviser that our clients are expecting us to be.

Given the post-financial crisis challenges for private banks in Asia, which model do you think works best?

I don’t think there is any single model which is the best for private banking in Asia.

I respect the broker-dealer approach that some large organisations take, but at the same time I believe that the bespoke and bottom-up approach to servicing HNW individuals offers a good complement to the more execution-led and transactional-driven approach.

How important in Asia is brand awareness? And as a newcomer, therefore, what can you do to stand out in this crowded marketplace?

Brand awareness in Asia is critical for many industries, and this includes private banking.

However, we want to cultivate the idea of UBP as “the best kept secret” in Asian private banking, with our best ambassadors for our service being our clients.

In our industry, 95% of new clients come through referrals from existing clients – whether friends, families or business partners. As a result, we believe that if we are good at what we do, and if we put all our energy into this, then this level of brand awareness will prove effective.

What growth ambitions do you have in Asia?

There is a debate about the shortage of good quality people in Asian private banking, but we are not building an army of relationship managers (RMs).

We don’t have an aggressive plan, but an ambitious strategy. And we want to be true to our DNA, which is to remain a boutique private bank, meaning that while we can offer a full spectrum of solutions via a holistic approach to our clients, we want to remain at an operational size which allows us to be flexible for our RMs and nimble for our clients.

This means we don’t need to segment clients or be too specific about geographies.

How do you balance the desire to take a long-term, client-centric approach with the need to be profitable and justify the decision to grow in this region?

Being privately-owned and privately-run is a big plus when building a business in a region such as Asia, and is critical to ensure a sustainable development plan.

The operating costs for running a private banking business have increased substantially, and that trend is not going to change. But by not being listed, we don’t have to re-adjust our business plan in order to satisfy financial analysts or different categories of shareholders.

Of course, we are in this business to make money, but we want to make money when our clients are making money and when they realise we are bringing value to them.

How important going forward is it for you to access local markets in the region, for example Thailand, Malaysia and Indonesia?

For the foreseeable future, we will keep on operating in Asia out of our two hubs, in Singapore and Hong Kong, and we don’t expect to have any direct local market presence.

However, we have local market access in terms of investment solutions and execution capability through our service providers in the region, so there is no restriction in terms of where our clients can have access – from the main Asian markets to the frontier markets.