Steady Hands Guide UBP through Asia’s Dynamic Wealth Management Waters

Ranjit Khanna is Chief Executive Singapore and Market Head, South Asia, Private Banking at Union Bancaire Privée (UBP), which is enjoying a period of sustained expansion in the region, with assets up more than 50% since 2016. Khanna met with Hubbis in August to define his vision of private banking and to articulate exactly why he believes UBP will continue to win more clients and convert more existing and future customers to recurring revenues. Khanna believes in a step-by-step approach to growth, focusing on sustainable expansion.

Khana begins by explaining that UBP has been robustly strengthening its proposition in three key areas. On the wealth planning side, UBP has introduced a service to help larger families establish single-family offices or multifamily offices, a segment UBP sees growing rapidly. In Hong Kong the bank has also established a corporate finance advisory referral panel. In addition, UBP has been working closely internally with the asset management colleagues to customise investment mandates for ultra-high net worth (UHNW) clients leveraging on its asset management platform.

He explains that in April, UBP upgraded its licence in Singapore from a merchant banking licence to a wholesale bank licence. “We can now take on Singapore Dollar deposits, and this is making us more competitive and attractive. The licence enhancement has broadened the platform and has provided us with the opportunity to offer an end-to-end service to our existing Singapore-based clients, as well as attract predominantly Singapore Dollar based clients that might traditionally not have found their way to UBP. This key milestone has helped round off our proposition in a comprehensive manner.”

Sustainable growth

Khanna adds that UBP wants to continue building out a highly compliant business in a sustainable fashion, “We are now seeing the fruits of this strategy, with strong and predictive growth in 2019 in Southeast Asia. We will continue hiring teams for Singapore and Indonesia, which remains a great opportunity, especially as we are seeing a faster switch to second and third generations there compared to some of the other markets. I think Thailand will always be attractive and we are exploring with keen interest how we might further penetrate that market. Amidst global volatility, we believe this region will do well.” Khanna believes Singapore will continue to benefit from the proactivity of the regulator. “There is a highly consultative approach here and considerably proactive decisions made in relation to new business opportunities, particularly around the family office space and fintechs.”

The NRI market is also one of Khanna’s areas of responsibility. “The approach the NRIs have towards wealth management is unique and it is what I would call, a three wallet investment strategy. The first wallet is a global investment wallet – NRIs have an appreciation for international investments that may offer the best return vis-à-vis risk and reward,” he remarks. “They also have a domestic wallet that is centred around where they are domiciled, so it would be investments in the form of their mortgages, their transactions, their cash management requirements. And their third wallet, which is rather unique, is their India-centric wallet. NRIs have a tremendous affinity towards any opportunity that is India-centric, partly due to an emotional link to India, but also due to ongoing political and economic transformation in India that continues to open up more investment opportunities that are highly attractive for NRIs. So if one can offer solutions in all three of these wallets, this is an attractive segment to cater to.”

Family office focus

Khanna notes that UBP has also been working to enhance its family office proposition. “We have long offered family office services out of Switzerland through our FOSS Family Office Advisory proposition targeting UHNWIs, and we now offer that service as part of our wealth planning offering here in Singapore. It is effectively a one-stop-shop for clients, who normally may find it difficult to navigate this complex and fast evolving space.”

In reaching out to second and third generation clients, he remarks, “No two clients are alike, and we must recognise that we must continue to evolve our proposition, to keep engaged and actually we have been successful in this regard thus far. We are, and I think will continue to be, a high touch business, and we can leverage our skills and capabilities with technology, while not striving to be a prime mover in this regard.”

Growth and potential

Khanna also remarks that while UBP is a construct of numerous acquisitions over several decades, the most significant recent deal being the purchase of Coutts International four years ago. “We are not in a rush, ,” he reports, “we want to maintain stability and to be sustainable, and we will, for example, only consider an opportunity if it was right for UBP, or as an another example, partnerships if both sides benefit over the longer term. Right now, we are partnering internally with our own asset management business, to bring bespoke, tailored solutions to our UHNW segment of clients.”

Khanna also deconstructs the argument that the wealth management industry might be now, or soon, in decline. “Actually, in this region in the last five to six years, we have seen the evolution of three very distinct models in the market. We have the local regional players that play very strongly to their footprint, their onshore capabilities. We have the universal banks, then we have the pure wealth banks, of which UBP is one, which have successfully been building their niche presence amidst Asia’s rapid private wealth expansion – each one playing their respective strength.”

Khanna does not perceive great change ahead in the foreseeable future. “More technology for sure,” he comments, “and better leveraging of the technology, and for us, a continuing focus on a highly bespoke, tailored advisory business.”

Up-skilling required

As to the progress that Khanna sees as necessary, he believes better training and development of bankers is essential. “There is training for support staff, there is training for bankers, and then there is training for specialists,” he notes, “but I would like to see the CPD process evolve and for example if there were to be a three- to five-year programme that people go through as they evolve in this industry, that would move the business closer to other professional fields such as law or medicine and other disciplines. Better delivery of training enabled by technology will also be valuable.”

He also considers more should be achieved in terms of focusing and harnessing technology effectively. “I would like to see better liaison between the private banks and the fintech solutions out there to achieve a much closer industry collaboration,” he reports. “For example, we would like to see more advances in CRM technology, in RegTech, in onboarding clients more efficiently, because although there are some solutions out there, however they are not fool proof at this juncture, particularly when it comes to cross border requirements. Areas such as the delivery of regulated advice that respects cross border regulations still need to be improved.”

Khanna closes the discussion with the observation that staying ahead of the competition is challenging but can be achieved by combining the different levels of expertise and skills within the bank. “We know our clients, we know our markets, we know our region, we develop propositions that are bespoke for our customers, we never take a one-size-fits-all approach. At our size, we are also able to be nimble and swift to adapt for the benefit of the bank and the clientele.”