December 9, 2024 – The private banking sector in Asia-Pacific is experiencing robust growth, with a substantial rebound in assets under management (AUM) and ambitious targets for the coming years. Despite strong competition and technological advancements, a few banks stand out for their innovative approaches, strategic focus on sustainability, and digital prowess.
AUM Growth and Ambitious Targets
The private banking and wealth management industry in Asia-Pacific has shown a remarkable recovery, growing by $400 billion in 2023 after two years of contraction. Consultancy firm Accenture reports that Asian wealth management firms are now aiming to more than double their AUM to a staggering $260 trillion by 2026, a goal that appears achievable at the current pace. However, the industry faces the challenge of distinguishing itself in a crowded market where firms offer similar services, such as AI-powered portfolio management, big data analysis, and access to global markets.
Digital innovation and the capacity for personalized service are emerging as key differentiators. Banks that excel in these areas can provide superior research, access to exclusive deals, and a high level of client engagement.
Best Private Bank: DBS Private Bank
Leading the charge in Asia-Pacific is DBS Private Bank, which continues to dominate the region with a proven track record of strong growth and exceptional client service. The bank’s relationship management team enjoys an outstanding reputation, backed by its “One Bank” business model. This structure allows DBS to draw on the full capabilities of its universal banking network, including its vast research resources and a unique “phygital” approach, blending digital tools with face-to-face interaction for a highly personalized client experience.
The bank’s AUM has grown at a compounded 10% annual rate from 2017 to 2023, and it boasts an impressively low cost-to-income ratio of 43%, far below the industry average of 60% to 80%. Last year, DBS saw its wealth management income rise by 35%, fueled by an $18 billion influx of net new money. With Southeast Asia forecasted to become the world’s fourth-largest economic bloc by 2030, DBS’s growth trajectory shows no signs of slowing down.
Best Private Bank for Sustainable Investing: Bank of Singapore Private Bank
For clients focused on sustainable investing, Bank of Singapore (BoS) stands out as a leader in integrating environmental, social, and governance (ESG) principles into its offerings. A subsidiary of Singapore-based OCBC, BoS leverages its parent’s commitment to sustainability, investing SGD 30 million in training modules since 2021 to enhance its sustainability approach.
BoS was the first private bank in Asia to incorporate ESG factors into loan assessments and focus on high-rated MSCI funds. In 2022, it co-chaired a task force that developed Singapore’s first sustainable investment guidelines and became the first private bank in the city to sign the Singapore Stewardship Principles for Responsible Investors. With ESG performance data integrated into its investment portfolios, BoS helps clients make informed decisions that align with their values while seeking strong financial returns.
Best Private Bank Digital Solutions for Clients: ICICI Securities
ICICI Securities has emerged as a trailblazer in digital financial services, positioning itself as a “digitally led and knowledge-driven financial services firm.” The bank offers a range of digital solutions, including its ICICI Direct platform, a comprehensive app and website, as well as various tools like digi-assist and an equity relationship manager.
ICICI has invested heavily in creating a “data lake” to harness vast amounts of financial data through advanced analytical tools. It employs execution algorithms to optimize trading efficiency, and its platforms include features like watchlists, chart-led trading ecosystems, and heat map insights. A significant recent upgrade saw ICICI move part of its trading platform to the cloud using Amazon Web Services (AWS), enhancing scalability and business expansion while complying with Indian regulatory requirements to keep data within the country. According to Subhash Kelkar, former chief technology and digital officer at ICICI Securities, the bank is focused on scaling rapidly to meet the evolving needs of its clients and provide high-speed, efficient digital services.
The Road Ahead
As Asia-Pacific’s wealth management industry grows at an unprecedented rate, the competition among private banks is intensifying. The winners in this race will be those that can combine digital innovation, personalized services, and sustainability, while maintaining a clear focus on long-term client relationships. With institutions like DBS, Bank of Singapore, and ICICI Securities leading the way, the region’s private banking sector is set to redefine the future of wealth management.
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