Siew Meng Tan, regional head, HSBC Private Banking Asia Pacific shares her views with Asian Private Banker in ‘The Final Word’, a year in review by the region’s private banking leaders as they share their thoughts and opinions on key issues around industry trends, business performance, investments, regulations, and technology.
Industry Trends | In what ways has the COVID-19 pandemic irrevocably changed the private banking industry and your own bank’s approach to operations and service?
COVID-19 pandemic has definitely accelerated the adoption of digital technology within the banking industry. In the absence of travel, we have grown accustomed to virtual meetings, which has helped us build our relationships with clients in these unprecedented times. At HSBC, we are committed to investing in our digital banking capabilities to support and enhance personal services to clients.
Industry Trends | Few can deny the importance of Asia’s onshore wealth markets — in terms of asset pools and the need for wealth management from increasingly sophisticated domestic investors. What opportunities do these markets bring to your business, and to what extent will ‘onshoring’ shape your strategic agenda?
We are proactively extending our footprint in Asia, particularly in mainland China and ASEAN. I believe strategically growing our onshore presence can certainly open up material opportunities to serve the fast-growing and increasingly sophisticated private wealth and business needs of new and existing clients. Having this connectivity is central to our growth in Asia which is key to delivering our ambition to become the No. 1 wealth manager in the region.
Investments | From a portfolio perspective, how important will (a) Chinese assets and (b) alternative investments be for delivering clients’ objectives over the next five years?
We remain constructive on China’s investment outlook. Chinese equities and credit should be integral parts of core investment portfolios in the medium term. With many macro and geopolitical risk factors in sight for the coming years, we recommend our clients keep exposure to hedge funds for portfolio diversification and risk management.
Investments | What key investment themes shape your bank’s 2021 outlook — and why?
Looking ahead to 2021, our investment strategy positions for a synchronised and broadening economic recovery and rebuilding after the COVID-19 pandemic. We expect that the global vaccine rollout, continued ultra-loose monetary policy, new fiscal stimulus, abundant liquidity, and strong earnings recovery will enhance the return outlook for risk assets.
Our top four trends for 2021 focus on the most important macro and market developments that will impact asset prices, which are: recharging Asia’s Growth; Recovering in a Low Yield World; Digital Transformation; and Investing for a Sustainable Future.
Investments | What important steps did your bank take to drive the sustainable investing agenda and to increase access to sustainable investing opportunities in 2020?
HSBC’s latest climate ambition is to become a net zero bank, supporting customers to thrive through transition, and unlocking next-generation climate solutions. ESG is well integrated into the portfolio management process of our discretionary solutions. We are increasing our investments to upgrade our ESG market database, client reporting platform and frontline education to enhance our sustainable investment capability. Under the 2021 Top Trend of Investing for a Sustainable Future, we recommend robust ESG solutions to capture opportunities from climate change mitigation and adaptation, and China’s green revolution.
Regulations | Both Singapore and Hong Kong are placing a strong emphasis on cultivating a competitive and supportive environment for family offices. What further initiatives should each/either regulator undertake to nurture the development of a family office-supportive ecosystem?
In Hong Kong and Singapore, the regulators are putting in place and refining a slew of measures to attract family offices, and the economic value of family offices to both jurisdictions cannot be underestimated. These measures do drive towards a professionalisation of the family office landscape — for instance, by formalising the investment structures, promoting the hiring of professionals, and overall moving towards a clearer definition of what a family office is.
Where they differ is that each jurisdiction offers unique advantages for families and family offices that cannot be replicated. Therefore it bears careful consideration as to which — if not both — jurisdiction could serve a family’s best interests and fit its longer term strategy.
In the turmoil of 2020, the family office became much more than an investment management operation. Increasingly, we saw families seeking to further formalise their ownership structures, putting in place family governance rules, diversifying locations, diversifying from core businesses, seeking new growth opportunities, both for their businesses and their wealth.
In this light, the role of the family office has taken on a new maturity, and regulators would do well to continue to listen to the families, seek feedback from industry practitioners, so as to expand their focus over and above the legal, taxation, human resource and education fronts currently.
Technology | Where do you see the best application of data analytics/machine learning in private banking?
More than ever before, our clients are looking to us to help them manage their wealth and navigate markets. Having a digital platform that supports this goal is critical to this mission. We are looking at developing a hybrid engagement model where technology will handle all of the administrative client touchpoints, opportunity assessments, portfolio risk alerts and other important information touchpoints for our clients.
We see artificial intelligence as critical to our strategy, with a wide range of potential applications in flux across our private banking business. As we continue to digitise client journeys, we see benefits in the use of AI across these experiences — from the delivery of relevant and insight-driven content, to conversational interfaces, to portfolio and risk management. In all instances, using AI to track, detect and predict patterns across enormous amounts of complex data, in combination with our human experience and expertise – our human intelligence – is a key differentiator.
Meet 2020’s industry leaders in the full round up of of Asian Private Banker‘s The Final Word 2020.