CEO Interview: DBS Private Bank

Su Shan Tan of DBS Private Bank reveals some of the firm’s strategic objectives, and explains how it can use its Asian heritage to differentiate itself in today’s competitive landscape.

• The value proposition for an Asian bank in the wealth management space is strong, and the opportunity to build an Asian-centric platform at DBS was too good for Su Shan Tan to pass up
• Being able to be first in line and work around product creation in RMB is an example of how an Asian bank can differentiate itself from US and European banks
• The focus is getting people to continually improve, which then enables a more robust platform to be put in place to make the processes simpler and smoother

[photo]148[/photo]After being in the private banking industry for a number of years, and working for several European and US banks, Su Shan Tan said in an interview that she joined DBS because now she sees it as being Asia’s time in the wealth management space.

The region has also done relatively better in the recent financial crisis, she added, and has been part of the wealth creation process from its beginning – so therefore understands it well.

As a  result, the value proposition for an Asian bank is strong, said Tan, and the opportunity to build a world-class, Asian-centric wealth management platform at DBS was too good for her to pass up,

The Asian advantage

Soon after Tan joined DBS in July, China’s central bank deregulated offshore RMB, and since then, billions of dollars of RMB flows have been created offshore. As an Asian bank involved in RMB business and trade flows offshore, Tan said DBS is in a great position to capture market share and facilitate the desire of private clients to have a new reserve currency. While the US dollar remains dominant, and Asian clients still like Singapore dollars and Australian dollars, for example, she said there is no doubt that the RMB will become the reserve currency of choice for wealthy Asian investors.

So being able to be first in line and work around product creation in RMB – whether in bonds, equities, and cash – is crucial, she explained.

Tan said this is an example of how an Asian bank can differentiate itself from US and European banks – by being at the forefront of local innovation and products.

In general, she added, by lending money to clients to help them grow their wealth, the relationship between Asian banks and their clients is a lot deeper, in turn enhancing the ability to manage that wealth.

The Singapore advantage

Despite the opportunities in China, however, Singapore is a good market to be based in from legal, political, tax and banking confidentially perspectives, said Tan.

While Shanghai and Hong Kong are key to accessing China, Tan said Singapore is a good fit between South and North Asia, as clients want to diversify their asset base in other parts of the region. In addition, for banking, discretionary management and ASEAN exposure, including as a gateway to India, Singapore has a geographic advantage, she added.

Developing the platform and processes

In looking to enhance the overall business, Tan said people are the bedrock, so she therefore hired a trainer even before joined the bank in mid-2010. The idea, she explained, was to help the current talent pool improve their technical training. From July to late November, for example, the firm wrote 21 modules and implemented 4,000 man hours of training for its bankers and mid- to back-office people in Singapore and Hong Kong.

She has also started 7.30am sessions in her office where she invites associates to discuss problem-solving, how to pitch deals and how to sense deals coming, among various topics.

Tan said the focus is getting people to continually improve. This then enables a more robust platform to be put in place, with DBS changing to Avaloq in early November. The aim is to make the processes simpler and smoother, she explained, leading to a list of about 80 to 90 things which need changing – with the firm about already 70% of the way through it.

Competing on product

When it comes to competing with a lot of the large global private banks who promote their product capabilities based on their ties with their investment banking arms, Tan said DBS as a group has been very active on many of the top local equity and debt capital markets deals in the second half of 2010. Being able to help the issuer with its Singapore relationships or other key local aspects often enables the bank to get involved on key transactions, she explained.

In terms of corporate banking, the deals last a lot longer and a lot of trust is involved in the process. This has enabled DBS to put together certain deals in Singapore where the corporate and private banking divisions have worked closely together, said Tan, whether in fundraising, M&A or other types of deals.