Joseph Poon, Group Head of DBS Private Bank, on Refining the Private Banking Proposition for Asia
Joseph Poon of DBS Bank
Nov 10, 2021
Joseph Poon is Group Head of DBS Private Bank. He is also Head of DBS Treasures Private Client for Singapore and Hong Kong, as well as the Head of the Singapore Investment Centre and serves on the Business Control Committee. Hubbis ‘met’ up with him in early July for an in-depth discussion on the evolution of private banking in the region, and the DBS model. We learned a lot about his and the bank’s commitment to ESG and sustainability, where his views were so extensive, impassioned and insightful that we carved those out into a separate article. And in this report, we focus attention on a number of areas that are close to the DBS Private Bank ethos and core to the business going forward. The family office business continues to forge ahead, with AUM up 167% in the past year as Singapore continues to be a major magnet for global UHNW wealth. The bank is developing a more extensive proposition around cryptocurrencies and digital assets, including a trust solution for crypto-assets launched in May this year. DBS is continuously driving home the message of longer-term portfolio formation to its clients. And Joseph updated us on the remarkable success of DBS’ digital transformation journey that began over a decade ago, and in which DBS continues to invest significant time and money to drive further progress, especially towards intelligent banking, which leverages predictive analytics and AI/ML to deliver hyper-personalised, relevant and intuitive insights to clients.
Joseph opens the discussion by focusing on Singapore Inc., the positioning of DBS within that and the rise of the family office proposition, which has been attracting more and more UHNW families to these shores from across the globe. “We are actually in an amazingly sweet spot, given the geopolitics and uncertainties that we’ve seen been blowing through the world in the last couple of years,” he reports. “I hear this regularly from clients. Essentially, they greatly appreciate that here in Singapore; we are an island of relative stability in a sea of flux.”
In terms of numbers, the AUM of the DBS family office business grew by 167% year on year through to the end of May, and Joseph reports a robust pipeline of growth is already in hand.
Singapore – a stable hub for the region
“There are simply so many uncertainties out there both in this region and globally, especially since the pandemic hit, and there is no doubt that Singapore has established itself as the family office venue of choice within Asia, and as a stable gateway to the region. With the pre-eminent position of DBS Private Bank and our commitment to this segment, we continue to partner on these journeys with an increasing number of UHNW families, with significant interest coming from traditional sources such as China and North Asia and our ASEAN neighbours, as well as increasingly from the US and Europe, and even from South Africa.”
Socialising uber-wealth
Joseph remarks that DBS’ success in the family office space also ties in tidily to the bank’s expanding ESG and sustainability proposition (see LINK to separate article).
“Prospective clients seeking to open their single-family office here have warmed to our commitment to the broader aspects of community, social involvement and philanthropy, as they seek to not only set up shop here but to engage more deeply in Singapore’s and the broader regional ecosystem,” he reports. “They appreciate how passionate we are about these issues, and how effective we can be in helping these families engage locally and in the region on a deeper level.”
Banking on safety, and a broad offering
He adds that the pandemic has certainly sharpened the minds of these families as to alternatives for the future, in the event of other crises that might emerge. “Having access to a place of great stability, security and safety, and from where they can conduct their financial and business lives, is incredibly important to these families.”
He also explains that for non-Asian families and investors, having Singapore both as a platform and a conduit to access China or other Asian markets is another major draw.
ASEAN alone is a captive market for Singapore of more than 650 million people, and DBS has a remarkable on the ground footprint and expertise in those countries, he comments. “We not only offer a private banking platform but also the entire retail and corporate banking infrastructure, as those elements are also vital to such investors,” he says. “This is a key competitive advantage, as the other global private banks operating here do not have a functioning corporate banking franchise in Asia.”
Seeking out the growth
For the ‘unicorns’ and would-be unicorns, he elucidates, there is considerable corporate funding required along the earlier stages of their journey, and while the global brand names might be able to help later on with the last rounds of funding, including via private equity and IPOs, they seldom get involved in the earlier rounds of funding.
“We can and will help for the right situations,” Joseph reports, “and there is no doubt that we see a lot more opportunities because of our strong corporate banking franchise, which opens the doors to early funding for many of these opportunities from a variety of sources. The universal banking model that DBS offers is a major draw for family offices and a variety of wealthy entrepreneurs.”
The digitalisation journey continues
He shifts his focus to the bank’s digital transformation, remarking that they embarked on this journey more than a decade ago, and that digitalisation continues to be central to the bank’s evolution and competitive edge.
Over the years, the bank has made significant and well-judged investments in enhancing the digital infrastructure across the front, middle and back-end.
“We were incredibly well-placed to handle the sudden challenges of the pandemic, and to overcome the many sudden disruptions,” Joseph reports. “And we have not slowed down; we continue to double down on our digital capabilities, especially that of intelligent banking – this leverages predictive analytics, artificial intelligence, machine learning and other elements – to deliver hyper-personalised, relevant and intuitive insights to our clients.”
He points, for example, to the bank’s all-encompassing and highly client-friendly DBS digibank wealth management app (previously named DBS iWealth), which has won the “Global no. 1 Wealth mobile app” by Cutter Research for the past three years. When the pandemic hit, DBS digibank enabled clients to seamlessly move online, and to continue monitoring and managing their portfolios from the comfort, convenience, and safety of their homes at all times.
The digital heart of DBS
“This focus on digitalisation is a bank-wide drive that comes from the top and flows through every vein of the organisation,” he explains. “The mission is to prepare ourselves to compete effectively in the new world of digital disruption, which we are constantly mindful about.”
He goes so far as to say that the bank has been “almost paranoid” about these dangers since about 5-6 years ago. “The pandemic has proven our fears of disruption right, albeit earlier than anticipated and unexpectedly. This has given us even more impetus to move forward with the evolution of our digital platform, which has produced numerous benefits for our clients.”
The DBS ‘Wealth Continuum’: Nurturing mature and seasoned relationship managers
Another key area of importance for the bank is its talent. “When it comes to retaining and hiring seasoned talent and the right people, this is not simply a numbers game; rather, it is all about quality,” he says.
“The right relationship managers are really seasoned around the bank’s platform and offerings; they’re able to continuously uncover and update their understanding of our clients’ evolving needs, to embrace digital, and also work really well within the broader proposition that we represent.”
In this regard, DBS has developed what the bank calls a ‘Wealth Continuum’. Just as how the bank looks to grow and support its clients all the way up from Treasures, to Treasures Private Client, then on to Private Bank – the Wealth Continuum’s objective is to nurture and groom its relationship managers the same way.
“For example, a relationship manager from a Treasures branch would work with clients for a few years, get familiar and do well, then move up to our next level which is Treasures Private Client. Those who prove successful in this segment then move on to DBS Private Bank,” he reports. “Many of our private banking relationship managers have typically been with DBS for 10 to 15 years, and oftentimes their clients have grown alongside them on this journey too, which makes their relationship remarkably strong.”
Ongoing training and upskilling are also vital at DBS Private Bank. On average, a relationship manager would have gone through around 100 hours of training last year.
No need to shout from the rooftops
“We are happy with our talent pool, steeped in our developmental philosophy with built-in continuous upskilling elements, and vigorous in our commitment to our teams and to our clients. We are not a hire and fire bank; we offer stability and a symbiotic and nurturing career path, and our clients are beneficiaries of that approach.”
His final comment centres on the One-Bank approach, and how DBS is truly putting this into action to support clients across all facets of their wealth-building journey, be it personal or corporate.
“We actually built key elements of – as well as a corridor to – our investment bank, within the private bank a couple of years ago, which is a great and unique advantage for us,” he reports. “Many of our private clients control private companies or mid-sized listed businesses and need help from time to time, be it debt funding, sourcing for partners in different countries, specific asset acquisition/divestment, private equity funding, and so forth. DBS Private Bank serves as an access point to the bank’s full suite of capabilities; we can bring all of DBS’ cross-function strengths and expertise to bear such that when our clients need help, be it in terms of our connections, support of our balance sheet, our advice and local expertise, research or the like, we are there for them.”
He reports that the bank is active in a host of transactions and mandates for such clients across the region. “Our private banking clients are highly receptive to these capabilities, as we have effectively opened up a completely new value proposition for them. These spark opportunities that they might not have expected, but really value.”
Connecting the dots for major clients
DBS Private Bank’s DNA is to leverage on the expertise of its corporate and investment banking counterparts, and systematically taps into the network of its strong Asian franchise, across all business units, to bring to bear the power of the entirety of DBS’ expertise, offering and network for the benefit of its Private Banking clients.
He offers a recent and common example of how DBS is connecting the dots for its clients. “We had a client who was looking to divest a portfolio of assets. One of the clients we sounded out these assets to counter-offered with a different opportunity he was working on. While discussing this second opportunity to yet another client, this client went on to share that he was looking for the exact assets that our first client was looking to divest. We connected them, and a firm bid for the assets is now being discussed.”
He adds that because DBS Private Bank holds strong relationships with its clients – many of whom they’ve been working with for five, ten or more years – genuine trust has been established, which is inducive for more open conversations, as well as speedier resolution and execution of opportunities.
“Whilst we are already trusted advisers to our clients’ financial affairs, additionally bringing unique off-the-market opportunities, or helping them with strategic issues on businesses they found, own or control, often takes our relationship with them and their family to a far deeper level.”
The digital assets revolution
Joseph also mentions that amid rising interest in cryptocurrencies, DBS Private Bank has introduced a trust solution for cryptos via DBS Trustee, the bank’s wholly-owned, licensed trust company – to enable its private banking clients to invest, custodise, and manage their digital assets in a safe, secure, and structured manner.
This offering is Asia’s first bank-backed trust solution for cryptocurrencies, and builds on the DBS Digital Exchange (DDEX), which was launched in December 2020, and which enables institutional and accredited investors to tap into a fully integrated tokenisation, trading and custody ecosystem for digital assets.
Enabling clients to integrate crypto-assets into their wealth succession plans
DBS Private Bank’s new trust offering applies only to cryptocurrencies hosted on DDEX (namely Bitcoin, Ether, Bitcoin Cash and XRP), and clients can work closely with DBS Private Bank to integrate these assets into their wealth succession plans. The offering builds on DDEX’s existing proposition for private banking clients, which provides security and transparency for crypto-assets with institutional-grade safekeeping and custodial services, and robust due diligence on the chain source.
“In recent years, more clients have either expressed interest or are already invested in digital assets, and we expect this trend to accelerate as cryptocurrencies turn increasingly mainstream,” Joseph explains.
“Our trust structure allows clients to conveniently hold these assets, with a peace of mind that they will be safely managed and passed on to their intended beneficiaries. This is part of our commitment to stay very much relevant to our client’s evolving investment opportunity set, in a rapidly changing world.”
Key Priorities
High on Joseph’s agenda is encouraging more private clients to take a portfolio approach to their investments. He explains that many clients remain very transactional, and the bank wants to drive them towards adopting a long investment horizon. “It is important for our clients to be investing with a long term orientation, and to diversify both their sources of return and their exposures to risk,” he comments, “and to understand and practice efficient allocation of their wealth. To this end, our RMs are well-trained to help clients focus on taking a portfolio approach. We most certainly see this as being central to our advice-based offerings ahead.”
He concedes however that getting this message across has not been easy, as the bullish markets have made getting returns looked too easy, for too long.
“Virtually any investor could have made money blindfolded in recent years, given the generally rising markets over the past few years” he comments, “so, encouraging a more disciplined and long term approach to investing has been a tough message to get across. We often ask our clients to stretch their investment time horizon to beyond the current financial/economic cycle, to extend beyond even their lifetime and into future generations. This has always helped clients to balance their ‘timing the market’ to one of ‘time in the market’ approach. I might sound like a broken record by constantly repeating the need for the longer-term orientation, but this is imperative to ensuring the resilience and sustainable growth of our clients’ wealth over time. We are making headway on this philosophy, but frankly, there is still a way to go.”
His second key priority is ESG and sustainability. The bank is committed to encouraging clients to apply an ESG lens over their investments, to promote best ESG practices in businesses, and to support social enterprises. Investing with an ESG lens would also help clients to be cognizant of potential long tail ESG event risks and/or benefit from potential higher valuation of companies with positive ESG and sustainable attributes.
“This is really important for DBS. It’s not only the right thing to do, it’s also a theme that truly bridges between the current and future generations,” he reports. “Many next gens share our passion towards ESG issues, often more so than their predecessors, and we believe this commonality will help us to better engage them. When our business-owning clients involve our Relationship Managers in ESG/sustainable discussions, they inevitably draw in their next generation, especially in family business/constitution discussions. This puts DBS in a unique and privileged position to bridge the bank’s trusted relationship across different generations.”
He takes heart in that people are increasingly seeing DBS as being synonymous with this important agenda, but recognises that the journey has only just really begun. “ESG is a key strategic priority for us, and we see this as a long-term agenda,” he reports. “We do not expect results to flow in tomorrow or the day after; neither is that what we’re after. This is core to our identity as a purpose-driven bank, core to our vision of portfolio alignment and our longer-term vision. We’re in it for the long haul.”
He says his other priority is to boost the bank’s offering around private assets. The private market is valued at around USD7 trillion globally, he estimates, and there is immense growth potential in Asia, which is home to a maturing demographic, a rapidly expanding middle class, and more and more start-ups.
“The private markets here will no doubt grow rapidly, and will be huge,” he reports. “The key is to find the right sectors, the right opportunities, create diverse pipeline and then help our clients to build their portfolio to include a range of private assets. We are leveraging our network and refining our skills and services to really strengthen this segment of our proposition.”
He explains that this mission has a societal pivot to it as well, as again it is about helping to transform society, to connect capital providers with those who need capital and can use it efficiently to build businesses that contribute to society, support communities, and help drive the region’s economies sustainably forward. There are many opportunities to transform older businesses and industries, as well as create new solutions and businesses. There’s also likely a growing trend of divestments or having businesses managed by non-family members, given the increasing number of younger generations of business owning families deciding not to take up the reins of control from their parents, and opting for new ventures and adventures instead.
DBS’s appetising suite of offerings
Joseph believes that with DBS’ deep experience and connections in the region, along with its proven expertise in private banking, corporate banking, retail banking, and investment banking, as well with its digital leadership and position as a safe pair of hands, it is ideally placed to play an even more central role for many HNW and UHNW families the many structural changes and developments that are taking place.
“We are very well-placed to benefit from the huge, long-term opportunities in our chosen markets,” he says. “We are here for the long-term, we are patient, and Asia is our home. The key for us is to be mindfully engaged with the dynamic forces of change in the world and then Asian region, support the continuing evolution of our clients’ wealth and livelihood, and remain their trusted advisor over the long term.”
Getting Personal with Joseph Poon
Joseph Poon has indeed come on a long journey to his position today as Managing Director and Group Head of DBS Private Bank. He was born in what was Saigon – now Ho Chi Minh City - during the Vietnam war. “Saigon, as it was then known, is in the South of Vietnam, and the South lost the war in 1975 and the political regime suddenly and dramatically changed for the worse, so my father, fearing persecution for himself and the family, took us out in 1977 when I was 12.”
They escaped in a boat, ending up first in a refugee camp in Malaysia, and some months later being accepted as an entire family into New Zealand. There, he enjoyed a wonderful education, later moving to Singapore in 1992. Settling there, he married a Singaporean. Together, they have a daughter.
“I have every reason to be incredibly grateful to both New Zealand, which generously opened its doors to us at times of immense difficulty for the family, and where we enjoyed true kindness early on, and also to Singapore where I have spent most of my life,” he comments. “Both have been wonderful, secure, and very positive places for my family and I.”
The family was initially settled in Wellington (NZ), which is well-known for its often highly unpredictable weather. “But we did not mind. In fact, we loved its seasonality versus the relatively unchanging seasons in Vietnam,” he recalls. “We did not even mind experiencing four seasons all over the course of one day; it was great to be given a second chance to start a new life away from war, away from fear. Those early experiences gave me the sense of community responsibility that inform many of my actions and decisions at DBS.”
He studied for his two degrees in Wellington, in Philosophy and Accounting. “I then ended up working in neither of those professions, which turned out to be a good decision,” he quips.
Despite having left Asia abruptly at a young age, Asia never quite left him. He decided to head to Singapore in 1992, where he started working for what was then Nikko Merchant Bank, before moving on to Merrill Lynch and then, ANZ Private Bank. As his career developed, he took on more prominent roles, including Head of JPMorgan’s private bank for Southeast Asia, Asia Head of Macquarie’s private wealth Asian business, which he established, and Head of Co-Investments & Private Equity at Julius Baer. He then joined UBS to run their Southeast Asian UHNW and Global Family Office business, before moving to DBS in 2016.
Joseph tries to keep as fit as possible and has even competed in four marathons around the world, including in Boston, and hopes to be able to travel for more races in the future. “It’s all about the training,” he says. “Getting up at 3.30 in the morning to run for about an hour and a half requires huge discipline. The marathon is only the last 26.3 miles; the real race really takes place over hundreds of miles before that, as one pounds the roads for months and months training and preparing.”
He says he gave up golf when his daughter was born, preferring instead to spend time with the family. “I will also admit, however, that the world of golf is not missing me greatly,” he jokes, “as if I am honest, I was never particularly good at the game.”
Quiet times might be spent reading non-fiction, such as ‘Noise’ by Nobel Laureate Daniel Kahneman. “I have more books than I can ever finish, but one day perhaps when I retire, I might be able to catch up,” he says.
His final comment is to observe that the role of the private banker in the future will evolve significantly from years past.
“Bankers increasingly need to understand what and how to ingest information, how to filter, understand and distil their essence, and personalise the content and delivery of relevant insights to their clients,” he observes. “They have to be able to offer relevant and valuable advice and insights. They must have a genuine passion to help clients, and for continuously upskilling, as we are in a business where things change constantly; our clients’ lives, the world and the markets are never the same two days running. And while the role will be more data-driven in the future, bankers will require even better and more acute judgement. Seasoned bankers will be the ones who succeed, those who can combine both the vital elements of IQ and EQ.”
Group Head of DBS Private Bank at DBS Bank