PRIVATE BANKER

August 2015 Issue 323 www.privatebankerinternational.com

A class act

Multifamily offices and private serve up bespoke solutions for the ultra wealthy

• The value of succession planning • Interview: Citibank Singapore • Voice biometrics in wealth management • Country Survey: UAE

PBI 322.indd 1 03/09/2015 16:27:17 Connect to Wealth Through Intelligence

About WealthInsight WealthInsight provides detailed data and insightful analysis on We work with and provide solutions for: the world’s High Net Worth Individuals (HNWIs) and wealth  Wealth Managers sector. With decades of experience providing business  Private Banks information, WealthInsight helps organisations make informed  Family Offices decisions and win new business.  Technology Providers  Professional Services – Consultants, Accountants, AtA WealthInsight’s core is our proprietary HNWI Lawyers, Real Estate Professionals Database of the world’s wealthiest individuals. Around  Fund Managers, Asset Managers, this database we have built a number of valuable research Venture Capitalists based products and services that make WealthInsight much  Non-profits and Educational Institutions more than just a rich contact list.

For more information contact us at [email protected] T: +44 (0)207 406 6553

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IAB 545v2.indd 25 20/02/2015 16:55:07 Private Banker International

EDITOR’S LETTER ANALYSIS

Connect to Wealth Through Intelligence Big data, big breaches and big CONTENTS question marks

NEWS n a day and age where clients are used to time data access when it comes to investments 2: NEWS DIGEST the likes of Amazon, Google, and PayPal, and performance. 3: NEWS BRIEFS it is obvious why customers expect the Advisers, too, benefit from time efficiencies 12: TECH ROUND-UP same level of service and intuitiveness if the client data is up to date. Keeping on top I of data is also increasingly important for suc- from their banks. 13: REGULATION ROUND-UP However, as the banking industry has sev- cessful regulatory reporting. 15: PEOPLE MOVES eral lessons to learn in terms of good practice Most importantly, analysing data success- from other industries, there is more to learn fully is crucial, now more than ever, from a ANALYSIS from other sectors when it comes to the mis- risk management point of view.

6: WEALTHINSIGHT: EXPERT COMMENT takes that have been made. However, the mining of data and usage of Data breaches have been a running theme analytics tools in the space is 14: LIQUIDITY PROFILES across industries in the last few years, from not as advanced as it could be or is in other the WikiLeaks episode to the Target data vio- industries. FEATURE lation to the recent Ashley Madison data hack Do private banks really have all the tools 4-5: MULTIFAMILY OFFICES AND PRIVATE scandal. in place to navigate the complex data eco - BANKS Such events come to every industry, partic- systems, tackling the high volume and As multi family offices expand and private ularly the private banking sector, in form of velocity, and making use of the structured banks progressively enter the bespoke, loud alarm bells as customers - for whom data as well as unstructured data in effective family office services market, the lines security is of utmost importance - get a blaring ways? Are private banks making use of third are blurring between offerings from these different financial institutions. John reminder of how every bit of their personal party organisations and solutions that are Schaffer speaks to industry experts to get a information that is in the digital space can be available in the market enough in this regard? clear picture accessed, misused or manipulated. Additionally, have private banks and wealth 7: CITIBANK SINGAPORE The significance of data in the financial ser- managers deployed watertight security sys- Rapid growth of the mass-affluent segment vices sector is paramount. tems to tackle highly sophisticated cyber secu- in Singapore offers strong business The usage of big data and analytics is a true rity challenges that continue to come up in opportunities for banks to differentiate differentiator in terms of offering relevant relation to the dynamics of data management? themselves. Citibank Singapore has a products and services to clients on the retail Now is the time to put in place appropriate robust strategy in place to gain and retain a spectrum of wealthy clients banking side. The credit card market has been frameworks and review strategies, yet again, even more proactive about the effective use of when it comes to managing data, cleaning 8: VOICE BIOMETRICS data and analytics, tailoring offers in real time data, and truly making big use of big data Complex and cumbersome authentication to consumers that perfectly fit clients’ taste to predict and mitigate risks, whether that's processes can often be a burden for private banking clients when speaking to an advisor, and in immediate response to their needs. internal or external. with the requirement for multiple pass-codes On the private banking and wealth man - Before becoming the Amazon of banking, or PINs. Voice biometrics offers a way to take agement side, however, the handling of data it’s most important for institutions to go back some friction out of the equation. and the usage of analytics is blanketed with to basics to protect themselves and their cus- 9: SUCCESSION PLANNING an extra layer of privacy concerns, which is tomers, and make their security and risk man- John Schaffer investigates how well the UK totally justified considering the net-worth of agement teams as well as systems as robust and European wealthy are prepared for the each of these clients. and effective as possible. As the cliché goes, transfer of their wealth A lot of banks have invested heavily in their and recent incidents amply prove, it is indeed About WealthInsight 10: AL RAYAN IT and software capabilities, overhauling their better to be safe than sorry. Britain's first fully Sharia-compliant bank back-end systems and using mature analytics WealthInsight provides detailed data and insightful analysis on We work with and provide solutions for: Al Rayan is gaining momentum. It has tools in order to offer agility to customers, Meghna Mukerjee undergone a major revamp following the through their digital channels, in terms of real- [email protected] the world’s High Net Worth Individuals (HNWIs) and wealth  Wealth Managers acquisition by Qatar's Masraf Al Rayan (MAR) QSC in 2014 sector. With decades of experience providing business  Private Banks information, WealthInsight helps organisations make informed  Family Offices COUNTRY SURVEY decisions and win new business.  Technology Providers 11: UAE  Professional Services – Consultants, Accountants, AtA WealthInsight’s core is our proprietary HNWI WealthInsight's report looks into the trends Lawyers, Real Estate Professionals of wealthy individuals in the UAE Database of the world’s wealthiest individuals. Around  Fund Managers, Asset Managers, this database we have built a number of valuable research Follow Private Banker International Venture Capitalists COMMENT based products and services that make WealthInsight much  Non-profits and Educational Institutions more than just a rich contact list. 16: LINKEDIN LinkedIn’s Henry Clifford Jones discusses how banks can harness digital technologies Search for ‘Private Banker International to attract a new generation of wealthy young Search for @BankerNews customers – Timetric ’ For more information contact us at [email protected]

T: +44 (0)207 406 6553 www.privatebankerinternational.com August 2015 y 1

PBI 322.indd 1 03/09/2015 16:27:24

IAB 545v2.indd 25 20/02/2015 16:55:07 Private Banker International NEWS DIGEST

STRATEGY of financial services software The latest license will take (OMGI) will report to Baines. and software-enabled services, the total number of restricted Also, Warren Tonkinson Citibank to expand has agreed to acquire Citi - license banks in Hong Kong to will become managing direc- wealth management group's alternative investor ser- 24. tor of OMGI to allow Bux - business in Korea vices business for $425 million. The subsidiaries will enable ton to remain focused on his Citigroup's alternative inves- the bank's customers to transact fund whilst providing overall Citibank Korea has unveiled tor services business includes with local entities, rather than investment leadership as CEO. plans to expand its wealth man- hedge fund services and private deal cross-border with the par- Tonkinson will report to Buxton agement business and focus on equity fund services. ent bank in another jurisdiction. in his new role. investments in mobile banking Bill Stone, chairman and Old Mutual Wealth CEO, CEO of SS&C Technologies, to manage low growth and low DEALS Paul Feeney, said: "I can think margins. said: "This acquisition is solidly of no better person to appoint "We will focus more on afflu- in line with SS&C's strategy of RBS offloads as CEO of OMGI than Rich - ent segments in Korean mar- combining organic growth with Luxembourg funds ard - his experience, exceptional kets," said Citibank Korea select, high quality acquisi - business to BlackFin investment skill and his princi- consumer business head and tions. Citi Alternative Investor ples will take our asset manage- senior executive vice president Services clients can be assured State-backed British lender ment business forward with a Brendan Carney. of SS&C's commitment to con- Royal (RBS) clear focus on delivering the Carney added that the bank tinue to serve them with world has sold its Luxembourg-based wealth creation that is at the will help customers manage class people, process and tech- funds business to private equity heart of our business.” their assets with right model nology. firm BlackFin Capital Partners portfolios. "We are excited about adding for an undisclosed amount. STRATEGY As part of the move, Citibank these talented employees and The business included RBS' Korea will reclassify its custom- look forward to the ideas and Luxembourg UCITS and alter- Swiss private bank ers into four segments based on passion they will bring to our native investment management organisation." Reyl & Cie opens first their total assets and investment company and funds governance office in US tendencies. Citi started moving to exit its business. The four groups include hedge fund and private-equity At the end of 2014, the busi- Reyl Overseas, a subsidiary of Citigold private client, for units several years ago, spurred ness had EUR28.5bn ($31.43 Reyl & Cie bank, has opened clients with assets of over by both new regulations and billion) of assets under admin- its first branch in Santa Barbara poor performance. KRW1bn, Citigold, for those istration, according to Reuters. (Los Angeles) in the US. SS&C is one of the leading with KRW2bn to KRW10bn The sale is part of the lender's The new office will be led by fund administrators for both and City priority (KRW50m to global retrenchment strategy Simon Clark, who is registered onshore and offshore hedge KRW200m), and Citibanking under which it is pulling out of as an investment advisor with the funds, fund of funds and private (less than KRW50m). 25 of the 38 countries in which Securities and Exchange Com- equity funds. "We are putting a bigger focus it operates to focus primarily on mission (SEC). The transaction, which is sub- on attracting more high-wealth the UK commercial and retail REYL Overseas said that ject to approvals by relevant reg- earners in order to increase the banking market. the new office will aim to take ulatory authorities, is expected market share to 10 percent," advantage of the American econ- to close in the first quarter of Citibank Korea CEO Park Jin- 2016. STRATEGY omy and the attractive entrepre- hei told The Korea Times. neurial microcosm. Citibank is also planning to Old Mutual Wealth sets The new office is expected to open a comprehensive bank - PRODUCTS AND SERVICES up new investment provide closer support to Ameri- ing hub in Banpo in November, Hong Kong regulator division, restructures can entrepreneurs who wish reported The Korea Herald. management to extend their business affairs This hub will enable customers awards banking license and banking relations globally to choose their financial product to Goldman Sachs unit Old Mutual Wealth has estab- as well as foreign investors who at a glance. The Hong Kong Monetary lished a new investment division, want to establish or strengthen Additionally, Citibank Korea Authority has granted a restrict- which will be headed by Quilter themselves in the US. will make an investment to ed banking licence to a wholly- Cheviot CEO Martin Baines. REYL Overseas CEO Roger promote financial technology, owned unit of Goldman Sachs The new division will include Groebli said: "It is a comprehen- or fintech, partnerships with Group under the banking ordi- discretionary manager Quilter sive and original proposal that information-technology compa- nance. Cheviot and asset manager enables REYL Overseas to rely nies such as IBM, Microsoft and The US investment bank Old Mutual Global Investors on the different areas of expertise Uber, according to The Korea will be able to book its trades (OMGI). that the Group has been able to Times. through this subsidiary David Loudon will replace develop internally, in a transver- Goldman Sachs Asia Pacific Baines as CEO of Quilter Che- sal way." DEALS Company Limited (GSAPCL), viot, while Richard Buxton will Founded in 1973 in Geneva, reported Reuters. become CEO of OMGI. Buxton REYL & Cie developed a regu- SS&C Technologies The license will allow will be succeeding Julian Ide, lated offer of financial services to buy Citigroup's Goldman Sachs to take deposits who is stepping down from the for North American clients from alternative investor of HK$500,000 ($64,495.32) firm. October 2011. The group mainly services business and above, but is normally used Old Mutual said that the targets international entrepre- for investment banking and cap- CEOs of Quilter Cheviot and neurs and institutional inves- SS&C Technologies, a provider ital markets activities. Old Mutual Global Investors tors.<

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PBI 322.indd 2 03/09/2015 16:27:24 Private Banker International BRIEFS NEWS

Nearly 80% of institutional investors invest in at least one alternative asset class: Preqin

Approximately four out of five (79%) a positive or neutral view of each asset class. asset classes believes that fund terms are institutional investors invest in at least one For investors in private equity and real changing in their favour. Approximately alternative asset class, according to a Preqin estate, this stands at 95% and 94% respec- 47% of hedge fund investors, and 44% of report. tively. 20% of investors in hedge funds have private equity investors, feel that terms are Preqin's latest Investor Outlook has found a negative perception of the asset class. becoming more favourable for investors. that private equity, hedge funds and real Growth in investment also looks set to Preqin CEO Mark O'Hare said: "Institu- estate are the most targeted alternative asset continue in the longer term, as the largest tional investors allocate to alternative assets classes, with over half of investors having an proportion of investors plan to increase their to diversify their portfolios and to achieve allocation to each of them in their portfolios. allocations to each asset class. In particular, a broad range of other objectives. The high Although the benefits vary significantly 51% of private equity investors, and 44% of absolute returns generated by private equity, between asset classes, common reasons cited infrastructure investors are aiming to allo- hedge funds' ability to reduce volatility, the by investors for holding allocations to alter- cate more capital to these asset classes, the reliable income generated by private debt native assets include diversification, high report predicts. and the inflation-hedging characteristics of returns, reliable income streams and infla- More than 60% of investors in real estate, real assets are just some of the attractions for tion hedging characteristics. infrastructure and private debt target returns sophisticated investors. The study reveals that investment in of at least 8% annually. Just under 60% of "It is clear that the institutional community almost all asset classes is likely to increase private equity investors seek returns of at remains confident in the ability of alternative over the coming year. In particular, 42% of least 14%. A significant 15% of private assets to help them meet their return objec- private equity investors, 38% of private debt equity investors target annualised returns of tives. The majority feel returns are meeting investors, and 36% of infrastructure inves- 20% or more. or exceeding expectations and, as a result, a tors plan to invest more capital in the next The majority of investors in all asset much larger proportion of investors plan to 12 months than they have in the previous classes believe that their interests align with increase their exposure to alternatives than year. those of fund managers. Private debt and plan to reduce it. There remains huge scope A third of hedge fund investors are look- real estate have the highest level of investor for the alternative assets industry to grow ing to invest less capital over the coming year satisfaction, with 83% and 80% of inves- in future years, both as investors build up compared to the last 12 months, compared tors respectively stating that their interests existing allocations, and as they also further to 19% that are looking to invest more. are represented by fund managers. diversify their portfolios to include a wider Also, the vast majority of investors have The largest proportion of investors in all range of asset classes." <

Female entrepreneurs are more successful than men in the UK: Kleinwort Benson survey

Despite encountering more obstacles and a they had failed to set up a business, versus create long term value. This is beneficial greater likelihood of fearing failure, female 14% for their counterparts in both Scot - in two ways. Firstly they often avoid the entrepreneurs are more likely to successful- land and the North, and and the pitfalls that befall early stage businesses. ly set up a business than men, according to South. "Secondly, their businesses will have dem- new research commissioned by UK-head- However, the Kleinwort Benson and onstrated a more consistent track record quartered private bank Kleinwort Benson, YouGov study also found that 50% of Lon- and they will be more attractive to poten- in partnership with YouGov. don entrepreneurs face late payments from tial acquirers." Out of 500 business leaders who par - clients, against only 36% in the Midlands. According to Kleinwort Benson, there ticipated in the survey, only 11% of female At 34%, the 55+ age category reported has been a 30% rise in the number of respondents said they had failed to set up the lowest rate of fear of failing. This female entrepreneur clients over the last a successful business, compared to 17% of group also reported the lowest rate of hav- two years. men. ing to overcome obstacles, at 32%. "Our new female clients are from a Despite this, 40% of female respondents Additionally, 20% of entrepreneurs aged wide range of industries but we are see - confessed to having a fear of failing to set up to 45 felt that they had seen negative ing significant numbers from technology up a business in comparison to 36% of impacts on the business, such as being and property, which is borne out by the men. overlooked by investors, compared to just research. Overall, we can see that women Also, almost half (42%) of the women 4% for those aged 46 to 54. are increasingly embracing entrepreneur- respondents said that they had to overcome Kleinwort Benson head of entrepreneurs, ship and are successfully overcoming obstacles, compared to 32% of the men. Paul Bentley, said: "In our experience, obstacles, such as funding, late payments Region wise, 18% of small business female entrepreneurs tend to be more risk and generating sales, to become models of owners in the Midlands and Wales said averse and position themselves better to entrepreneurial growth," Bentley added. <

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PBI 322.indd 3 03/09/2015 16:27:24 Private Banker International FEATURE MULTIFAMILY OFFICES & PRIVATE BANKS

Blurred lines: multifamily offices and private banks The definition of a family office is becoming ever more difficult to pin down. As multi family offices expand and private banks progressively enter the bespoke, family office services market, the lines are blurring between offerings from these different financial institutions.John Schaffer speaks to industry experts to get a clear picture

he traditional perception of a family office centres on a pri- n GENERATION CURRENTLY SERVICED BY FAMILY OFFICE, IN % vate office for a family of significant wealth, with a team of employees catering to the specific and often complex needs % of an ultra wealthy family. T 80 Conventionally, a family office provides structures around all areas of family wealth including portfolio management, tax, suc- cession planning and philanthropy. 70 A report published by global wealth consultancy WealthInsight, in 2013 estimated the number of family offices globally at over 5,000, and accounting for $2.5trn worth of global HNW wealth. 60 These numbers have grown strongly since. In the 2013 report, WealthInsight broke the industry down into 2,700 single family offices (SFO), which work exclusively for one 50 family and its members, and 2,300 multi-family offices (MFO). In some cases, MFOs can service hundreds or even thousands of fami- 40 lies. Typically, those ultra high net worth individuals (UHNWI) in $30m and above range begin to access MFOs, while those with 30 $100m or above prefer SFOs. However, many of the large international private banks have 20 entered into the family office space, some even setting up separate subsidiaries that operate as family offices. As the pool of choices expands for the UHNWIs, David Wilson, 10 head of the strategic analysis group at Capgemini, says that the lines are blurring between the service offerings from MFOs, a private 0 bank and a private bank that holds itself up to having a family office. “The fundamental choice that faces a wealthy family is between 1st 2nd 3rd 4th 5th 6th 7th the control, privacy and customisation that you get with a SFO or a two or three family MFO, moving towards the cost effectiveness Source: Campden Wealth and UBS, The Global Family Office Report 2014 of spreading investments and operational costs across a larger asset base as you move into the MFO space. As they get larger, they do indeed start to resemble a private bank in many ways,” he says. in areas such as fiduciary, investments, banking and philanthropy. The US remains the centre of the family office universe. MFOs like Bessemer Trust and Rockefeller Financial make many private Institutional Wealth banks' propositions look like boutique offerings. US-based family Where the wealth of individuals reaches such vast levels, their offices, in fact, account for more than half of the top 20 family requirements can be akin to needs of an investment banking offices globally. client. The scale and access factors can often become integral Northern Trust’s family office proposition is aimed firmly at the differentiators. ultra wealthy client segment. The private bank services 400 families Fox, Northern Trust, tells PBI that family office clients, who internationally, each with a net worth of $200m or greater. require institutional expertise, have requirements that are “well Dave Fox, head of the global family office group at Northern beyond typical wealth management services”. Trust, tells PBI how the bank differentiates its family office proposi- “They are investing around the globe, often heavily in alternative tion: assets, which require access to customised solutions as well as the “Northern Trust’s business model differs from many large interna- technology platform and operational infrastructure to support this tional financial services firms in that we are not a retail bank, nor complexity.” are we in the investment banking and proprietary trading business.” Eileen Foley, managing director at BNY Mellon, further describes Fox adds that the number of clients that an advisor will handle this demographic. can vary greatly, depending on the innate complexity of each indi- “Think about family offices servicing the “insta-vidual”. These vidual client. He says that it ranges from 4 – 12 clients per advisor individuals’ assets are generally the size of many institutional cli- but that, due to the scale of the wealth, clients are not involved in ents’, and yet because they are ultimately individuals, they need all “single advisor relationships” and are supported by a team of experts the wealth management capabilities, the inter-generational transfer

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PBI 322.indd 4 03/09/2015 16:27:25 Private Banker International MULTIFAMILY OFFICES & PRIVATE BANKS FEATURE

Trust’s offering, the entry level for wealthy families is also lower. n AVERAGE FAMILY OFFICE ASSETS UNDER MANAGEMENT Firmly placed in the UHNWI category, families require $50m of Region Average AuM liquid wealth or $100m of net worth to receive Abbot Downing’s Global $890m services. Ginter adds that the fiduciary element plays a large part in the Europe $890m significance of Abbot Downing’s service model which he sees as North America $1180m one of the differentiators to the average private banking service, Asia Pacific $480m where the family office provides personalised relationships with Source: Campden Wealth and UBS, The Global Family Office Report 2014 clients.

The trust factor and the understanding of taxes,” she says. The financial crisis created an environment where many wealthy individuals lost their trust in big banks. The appeal of independent The independent advisory role MFOs became apparent as the banks went through a litany of legal However, Michael Zeuner, managing partner at We Family Offices, proceedings and controversies. tells PBI that many of the family office subsidiaries of private banks However Wilson, Capgemini, suggests that the impression of the are not “true family offices”. wealth management sector overall has improved markedly in recent He says that family offices should act in a purely advisory role years and that the wealthy are less dubious of their interactions with and that they must serve wealthy families with “no other agenda”. banks: “Basically, the family office is a buying role and a traditional finan- “A service that is independent of a normal bank or financial ser- cial institution is a selling role. Families need both but it’s important vices institution may still have some attraction, but the differentiat- to distinguish between the two.” ing factor is far less than what it was in 2009/10 in the peak of the We Family Offices adopts the advisory model. The Miami-head- financial crisis,” he says quartered multi family office advises 70 wealthy families, and the Although the financial crisis presented a challenging environment, typical client base has wealth of over $100m. it has not been all doom and gloom for the family offices that are Zeuner says that a family office is positioned to organise the associated with private banks. Ginter suggests that Abbot Downing whole suite of services that a wealthy family would need but that has performed well in the years following the financial crisis and independence is the key differentiator from other financial service there has been no faltering client base. providers. “Our experience is that clients are actively moving to us and frank- “The role of a family office is to help a family buy products and ly, seeking us out.” services, it is not to sell them products and services, and the com- Phillip Higson, vice chairman of the multi family office group at pensation that family offices receive is for their advice in assem - UBS, suggests that the larger institutions that benefit from the “too bling, managing, negotiating and putting together all the different big to fail” aspect, are, in fact, still favourable for the ultra high net providers.” worth individuals (UHNWIs) as these institutions can survive in Zeuner says that the current trend for private banks to brand the midst of a crisis. their services as family offices presents a conflict of interest, and is “I think the trust has moved back in favour of the bigger players.” “disingenuous” to clients. Higson tells PBI. “When a private bank positions itself as a family office – I think its disingenuous to the client, because it’s impossible given their busi- A collaborative approach ness system. Some private banks offer services to independent family offices and "Their business system is that they make money from selling prod- multi family offices with a collaborative approach rather than offer- ucts and services. They don’t charge an explicit fee for advice that’s ing a distinct family office service themselves. independent, objective and disconnected from the product, and so This is the case with BNY Mellon and Swiss banking giant UBS. I think it’s a marketing label in most cases.” Both banks provide services to independent family offices as well as However, Zeuner highlights that all of We Family Offices’ clients individuals who are involved with family offices. work with private banks, and often numerous different ones, in Banks can add to family offices by offering the banking services order to diversify. He asserts that We Family Offices’ place in the that wealthy individuals will no doubt require, as well as access to equation is to “buy correctly from the private banks”. wealth management services that can allow the smaller institutions Although private banks field the reputation of pushing products to compete on a global scale. towards customers, Jack Ginter, senior managing director at Abbot The relationships are often mutually beneficial as the private Downing, the family office division of Wells Fargo, tells PBI that the banks can benefit from the high-touch nature of the relationships company’s proposition is entirely service oriented. that family offices have developed with a handful of families. “Never will a client come into Abbot Downing and feel like they Higson, UBS, says: “We’re not actually a competitor to a family are being sold products, or feel like they’re being sold something office. We’re a catalyst to make a family office more effective. that’s not in their best interests.” “Mostly we are providing the picks and shovels with the market Abbot Downing concentrates its offering specifically towards the access, technology systems and custody processes for the family demands of multi-generational families. The Abbot Downing brand office to do all the work themselves. has recently celebrated its third year anniversary. "When a multi family office needs borrowing services, UBS is Ginter says that the Abbot Downing family office competes with there to provide a balance sheet.” the independent MFOs by offering a “customised and personalised Higson adds that a smaller institution will not have capabilities service”. such as lending against a client’s whole portfolio or will not have Abbot Downing’s senior relationship advisors work with up to 15 subsidiaries in international locations to make executions in local families. Although this is a slightly greater number than Northern market bonds or equities. <

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PBI 322.indd 5 03/09/2015 16:27:25 Private Banker International

ANALYSIS ANALYSIS WEALTHINSIGHT

Welcome to the monthly instalment of news and views from PBI’s sister company, WealthInsight – the leading provider of business intelligence for the wealth sector

What the emerging market currency collapse means for HNWIs Latest data from WealthInsight n BRIC HNWIS SOURCE OF WEALTH, BY PERCENTAGE, 2014 this week confirms a widely assumed fact: London is the most popular city in the world Basic Minerals for overseas second home Financial Services and investments Technology and telecommunications ownership among HNWIs. That Manufacturing is, HNWIs buying second homes Retail, fashion and luxury goods outside their home country Media would choose London 1.2 times FMCG over its nearest rival, New York. Transport and logistics A statistical finding such Healthcare as this would have been fairly Real Estate unremarkable to those familiar Diversified with the demographic make- % up of Sloane Street or Berkley 0 3 6 9 12 15 Square – until recently. Many of those selling homes to the rich Source: WealthInsight have noticed that demand was not what it once was. Prime real estate agent, Knight Frank, for example, reports that annual price growth in prime central London property flattened out at 2% in July, down from 7.9% in July last year. The number of buyers of £10million proper- ties also slowed this summer. Many factors are at play here but one which ties in the global economy in with London’s property market: The crash in emerging market currencies caused by major commodity markets. With the slump in many emerging country’s stock markets hammering currencies, HNWIs from abroad can no longer afford London. This is having a profound effect on central London since WealthInsight’s findings reveal that just short of 13% of second home owning millionairesblurbs from in emerging 7.4/6pt Officina Sans ITC book markets have a pad in London, a trend that would surely havecolour grown were is it Pantone not for 655 EC the current currency crises. As the gap between monopoly currencies and the sterling widens, estate agents can expect little activity from Malaysian, Indonesian, Thai, Turkish and South Afri- can HNWIs as the ringgit, rupiah, baht, lira and rand collectively flounder. But beyond squeezing penthouse shopping among landlubbing HNWIs, how else is the current currency collapse affecting HNWIs? Here are three trends:

Renaissance of Remittances With a widening gap between developed and emerging currencies, non-resident and diaspora HNWIs will capitalize on their unique position by increasing remit- tances. Favourable exchange rates between developed and developing nations will benefit those on the receiving end of remittances. Non-resident Indians will be at the forefront of this movement: With an average wealth of $3m each, NRI mil- lionaires are the wealthiest domiciled diaspora of their kind. However, as means of remittancing in other parts of the world are ‘leap-frogged’ by mobile technology this could be the beginning of a much larger flow of wealth.

Manufacturing not Middle Classes the way forward It is not only HNWIs in the oil, gas and mining sectors that will see fortunes wiped off their wealth as a result of the global commodity slump. Much of the recent growth in emerging markets has been from an enlarged middle – and therefore consumer – class. The number of HNWIs from the BRIC countries involved in FMCG and retail, for example, grew 29% and 26% respectively between 2010 and 2014. Gold and Switzerland are Back However, this will be unlikely to grow much further as the emerging middle classes As always in times of turmoil, HNWIs are turning to gold and Switzerland as safe are hit by the vicious domino effect that starts with commodities. Instead, manu- bets: The price of gold and the Swiss franc have both risen exponentially over the facturing is likely to be the biggest money maker for HNWIs as emerging countries devalue their currencies to favour exports. past week. Singapore might also see an influx of refugee wealth as its stock market (Reduced spending power among the emerging middle classes will not only hit has proved less volatile than those of its neighbours. HNWIs in the emerging markets : Apple’s share price has taken a hit as speculators Oliver Williams: Head, WealthInsight question China’s appetite for the iPhone) [email protected]; www.wealthinsight.com

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PBI 322.indd 6 03/09/2015 16:27:25 Private Banker International CITIBANK SINGAPORE FEATURE

Citibank Singapore creating a recipe for success with wealthy clients Rapid growth of the mass-affluent segment in Singapore offers strong business opportunities for banks to differentiate themselves in a competitive environment. Citibank Singapore has a robust strategy in place to gain and retain a spectrum of wealthy clients. Meghna Mukerjee speaks to Shrikant Bhat, MD and head of wealth management, and Zal Devitre, head of investments, at Citibank Singapore

he emerging affluent have been a ris- minimum transactional banking needs, and New clients almost always come through ing force in Singapore, and across as they go up the wealth spectrum their needs referrals, on the CPC end, whereas the sheer Southeast Asia. The pursuit of gain- from the bank evolve. Hence our proposi- scale helps with client acquisition on the ing mass-affluent clients’ wallet-share tions evolve accordingly,” says Bhat. consumer banking side. Devitre points out T Since Citibank Singapore launched its that several customers grow through their and building sticky relationships with them is highly competitive. Keeping this in view, segmented value proposition, several other lifecycle with the bank, starting out with a Citibank Singapore, that operates as a local banks in Singapore have strategised similarly. student account to eventually becoming a player on the island, is creating value for its The Citibank InterestPlus account, launched CPC customer. clients in several ways. in 2013 and designed to provide affluent cli- Technology is a big mover for Citibank Servicing the entire spectrum of custom- ents with higher returns as well as rewards, Singapore. “We’re in a new phase of provid- ers, Citibank Singapore has strategised and has been a successful product, and has also ing smart banking,” says Bhat. A priority on segmented its client base in a manner that been replicated by some banks. the IT side, Bhat informs, is to build scale. enables it to provide best-of-breed products Zal Devitre, head of investments at “Our go-to-common strategy is crucial. We’re and services to every user. Citibank Singapore says that Citibank has building a common platform via which every Citibank Singapore has well defined been associated with many firsts in the single customer is able to get similar features, propositions for its customers in the afflu- region. “In Singapore, thus, we’re seen as accessible anywhere in the world. ent or Citigold segment, and high net worth the bank that innovates and is customer “For instance, if we have the Citibank Inter- (HNW) or the Citigold Private Clients (CPC) focused,” he adds. estPlus account that’s built in Singapore, it segment. In terms of investment vehicles, Citibank should be accessible to customers in other Shrikant Bhat, managing director and Singapore has a robust platform cutting markets through the common platform. This head of wealth management, Citibank Singa- across all customer segments. According to is a challenge, though, as we’re developing pore, says these segmentations were created Devitre, in the post financial crisis world, cli- our unique businesses in specific markets and, in 2010 in response to the changing customer ents demonstrate a lower risk appetite and at the same time, trying to serve a common dynamics – not only to address the growing prefer products that offer transparency and platform globally.” mass affluent client needs but also the needs liquidity. Bhat also affirms that the customer prefer- of those Citigold customers who were fast “We also see clients wanting steady ence is strongly geared towards simplicity – evolving into even wealthier clients, but were income – be it from fixed income or equi- another IT priority for Citibank. “Customer not yet ready for true-blue private banking ties. But at the same time, we differentiate surveys often show that there’s too much services. between our client segments and have propo- choice, and processes are too complex. “These customers may not need the full sitions that speak to the needs of each seg- “We find that the transaction banking bespoke solutions of private banks, and pre- ment. customers like easy, DIY-type solutions. We fer customised services over priority services. “Our Citigold Private Client segment gives have built on that by leveraging our global Our CPC proposition is therefore geared for access to the full range of investment prod- strengths,” says Bhat. The results have been just the right level of exclusivity,” he says. ucts such as private equities, hedge funds, functionalities such as Citi Global Transfers Citibank Singapore defines private bank- derivatives, and more. For Citigold clients, – allowing instant transfer of funds cross bor- ing customers as typically those with assets we offer products such as mutual funds, and der. In Singapore, the feature enables instant under management of anything beyond begin to introduce more sophisticated offer- fund transfers across banks. $25m. “These are the ultra high net worth ings such as structured products,” he informs. “On the wealth side, we are one of the individuals (UHNWIs), and the solutions Citibank Singapore prides itself in few banks with a full suite of products they need have more in common with the leveraging its advisory capabilities for the online, covering foreign exchange, broker- investment bank, whereas, for the most part, mass affluent customers. “We assign each age, mutual funds, and a portfolio tracker our customers are better served through the customer with a personal banker. We also that provides an interactive overview of cli- consumer bank,” he explains. have a structured advisory process and ents’ holdings and performance across asset The HNW customers are defined by investment councillors on each team,” adds classes,” adds Bhat. Citibank Singapore as those with at least Devitre. However, despite “closely watching and S$1m in investable assets with the bank. To Citibank Singapore boasts staff strength of working on the technology space”, according be a Citigold client, the customer has to have 10,000, as well as approximately 25 branch- to Bhat, wealthy customers still rely heavily at least S$200,000 with the bank and S$1m es and over 1,000 ATMs across the country. on the human touch – particularly customers upwards in assets under management for cli- Additionally, it has multiple touch points in Asia. “That’s why we are the only bank ents from Citigold Private Client. across Singapore – having tied up with AXS that provides a personal banker for even the “Emerging affluent clients start with the – enabling over 1,500 points of distribution. emerging affluent clients,” he says. <

www.privatebankerinternational.com August 2015 y 7

PBI 322.indd 7 03/09/2015 16:27:26 Private Banker International FEATURE VOICE BIOMETRICS

A secure voice Complex and cumbersome authentication processes can often be a burden for private banking clients when speaking to an advisor, with the requirement for multiple pass-codes or PINs. Voice biometrics offers a way to take some friction out of the equation. John Schaffer explores how and why the wealth management sector is embracing this technology

he usage of biometrics is certainly can really define the identity and signal that West says that reception from wealthy cli- becoming more commonplace, from information to the person inside the bank.” ents to the voice biometrics capability has iris recognition at airport pass - Reeve adds that the banker is given a sig- been largely positive. “I’ve seen some clients port controls to Apple’s fingerprint nal on his or her desktop in a traffic light sys- who were originally a bit sceptical. They T tem format, where a red light signifies a poor were not against it, but hadn’t really under- authentication for its new Apple Pay mobile payments service. Biometrics is an attractive match with the voice print and encourages stood it and wanted more details. We’ve had proposition in terms of security, as the data the advisor to ask questions to challenge the discussions with these clients and they’ve provided is completely unique to the individ- client’s identity. Conversely, a green light gone ahead with it, and we’ve seen them ual and the need to remember a PIN or com- signifies that the client is a good match and enjoy the technology,” he says. plex passwords is foregone, thus presenting the interaction can continue without friction. West adds that clients are able to access all advantages for both clients and businesses. According to Ant Allan, research vice pres- of Investec’s services over the phone. “We Voice biometrics provides a platform for ident at Gartner, the initial investment for may, depending on the nature of the trans- authenticating customers over the phone banks to implement a voice biometrics sys- action, put upper limits on what we’re pre- without a tirade of security questions. tem may be high but a secure system could pared to do over the phone and require extra The technology has been attractive for the offset many costs associated with clients call- security or verification. But for the most part, financial services sector, with banks such as ing in to change their passwords or report clients that are calling us have access to a full the UK’s Wealth and Investment security breaches. He suggests that a robust suite of services.” Management and South Africa-headquar- biometrics system could mitigate some of A concern that comes to mind around a tered Investec adopting the technology in the phishing attacks that are associated with voice-based authentication system is wheth- the wealth management space. Pennsylva- knowledge-based systems such as PINs. er an impostor could record a voice and hack nia-based mutual fund manager, Vanguard Voice biometrics comes as a growing move into an account. However, Allan suggests Group, is also among the many firms using towards progressive security, where the that a well implemented voice biometrics voice biometrics. stringency of authentication levels is tailored system can be extremely secure, as long as On the retail banking side, the list of lend- to the risk level of the interaction or transac- the technology tests properly for “liveness". ers using voice biometrics is long, with ING tion. For instance, a balance enquiry would “It’s about making the system harder for in the Netherlands to Garanti Bank in Tur- come under far less scrutiny than the transfer an attacker by incorporating things indicat- key to Santander in Mexico, being examples.. of an unusual sum of money. ing that the real biometric subject is actually Massachusetts-headquartered software Reeve says: “It’s really part of a whole presenting that sample in real time. With company Nuance provides voice biometrics security solution. It’s complementary from Nuance’s system, you need interaction with authentication systems for a variety of com- a usability standpoint because a lot of the the operator. You can't fake that with a panies, ranging from telecommunications to transactions occurring with banks are actu- recording, not easily anyway," Allan says. financial services. It’s also the organisation ally not high risk.” Another potential shortfall of the medium behind Apple’s Siri technology. Institutions using Nuance’s technology is the occasional difficulty to authenticate a The first private bank to adopt Nuance’s can decide how tight they want the security client if there is an excess of unwanted noise. voice biometrics technology was Barclays measures to be. Reeve says: “You can make Reeve says: “Clearly acoustic effects – very W&IM in 2013, and has reported high levels the system much more or less aggressive. noisy traffic in the street or a heavy cold for of customer satisfaction with regards to the Banks tend to take a very aggressive stance example from the user – would potentially solution ever since. Investec rolled out the in comparison to a telecommunications car- lower the matching score. The system would service in February 2015. rier, for example.” be likely to rebuff you, and you would fall Nuance’s “FreeSpeech” technology, that Craig West, UK banking head at Investec, back to answering security questions.” has been adopted by private banks, analy- feels that the potential user experience Allan suggest that although voice biomet- ses the client’s voice consistently throughout advantages of authentication through voice rics may “not be the most secure biometrics the call, rather than requiring a password or are particularly attractive to private banking system”, it is currently more feasible, as cli- phrase. According to Seb Reeve, director of clients who represent a “particularly time- ents only need access to a phone. It doesn’t product management at Nuance, authentica- hungry client base”. require the same hardware as fingerprint tion using Freespeech takes approximately Investec has rolled out voice biometrics recognition does – such as a scanner – that eight to ten seconds. Reeve tells PBI: capabilities for South Africa, as well as its only a small group of clients own. However, “Quite early in the conversation we can internationally serviced regions such as the Allan adds that lenders, particularly private make an accurate assertion as to whether or UK and Mauritius. Investec's call centre is banks, will adopt a variety of biometrics sys- not it’s that person, and that's a continual based in South Africa where all incoming tems in the future, including face and finger- process. As the conversation progresses, we calls are handled, irrespective of geography. print recognition, alongside voice. <

8 y August 2015 www.privatebankerinternational.com

PBI 322.indd 8 03/09/2015 16:27:26 Private Banker International SUCCESSION PLANNING FEATURE

The uphill task of succession planning Succession planning is often a sensitive topic for wealthy individuals at the best of times, but as the world’s wealthy become progressively more international, conflicts in cross-border legislation can make the process seem like an insurmountable task. John Schaffer investigates how well the UK and European wealthy are prepared for the transfer of their wealth

here are numerous issues involved in wealthy individual, especially when the pro- new trusts in the UK has become less com- succession planning that can often cess can be long drawn. monplace and problematic as individuals “get cause wealthy individuals to stall plans Guy Simonius, managing director of a 20% tax charge going in”. He further adds, for the transfer of their wealth to the wealth and tax planning at Julius Baer, sug- “If an entrepreneur is in their 30s or 40s, they T gests that building a plan for individuals who probably won’t have a trust.” next generation. Wealthy individuals in the UK and Europe are often faced with chal- have assets spread across different countries The significant differences between succes- lenging inheritance tax (IHT) legislations and can take between three and five years in par- sion laws in the UK and the majority of Euro- complex systems that can deter them from ticularly complex instances. pean countries are due to the UK’s common implementing proper provisions. Julius Baer has a specialised department of law jurisdiction vs Europe’s civil. High net worth individuals (HNWIs) are approximately 100 people who work on suc- In Europe, many countries invoke a policy becoming increasingly globalised and face the cession planning. Simonius feels that, due to of forced heirship whereby the next of kin challenge of having assets in multiple jurisdic- the Switzerland-headquartered bank’s global are entitled to a significant portion of the tions, causing further difficulty as they battle focus, it can offer a unique service to the inter- deceased’s estate. In some jurisdictions this through a minefield of cross-border laws that national wealthy. “There are points where a can be as large as 75% of the estate, leaving frequently contradict one another. local lawyer who is not so much internation- an individual with little choice as to whom to A recent EU directive (Brussels IV) has ally specialised might have less experience, transfer their wealth to. attempted to make succession planning in that’s where we step in.” Simonius tells PBI. Forced heirship rules can become problem- cross-border situations more transparent; Even when wealthy individuals have made atic when individuals have properties in mul- however succession plans are often a bespoke succession plans, the need for regular review tiple European jurisdictions as there can be affair when it comes to the wealthy and indi- is key. Barry Adamson, partner at Berkeley confusion as to which country’s law applies viduals need to work closely with advisors to Law, suggests that individuals should revisit at the time of transfer. make the process as painless as possible. their wills every five years due to frequent In response to the cross-border confusion, Caroline Garnham, CEO at Family BHive, changes in legislation. He tells PBI: EU’s succession directive Brussels IV, applied an exclusive online community for wealthy “If you think about emigrating or have addi- on 17 August 2015, allows individuals to clients and advisers, tells PBI that she has tions to the family, it is important that you stipulate whether succession law applies in been “really shocked” by the lack of prepa- keep your will under review because what is the jurisdiction where the assets are held or ration for succession planning amongst the relevant and appropriate at the time the will the country where they are domicilied. The UK’s wealthy. was made may cease to be so in the future. EU regulation comes as an attempt to stream- “We’re talking about people with hundreds “I’ve seen wills from back in the 1970s, for line the law across Europe. of millions of pounds who have inadequate example, which made perfect sense at the The UK, Ireland and Denmark have chosen arrangements. Any arrangements that I have time, but can cause a lot of problems because to opt out of the new legislation. Individuals seen are leaving huge holes and gaps, which they just haven’t been kept under review. Or, in the UK and Ireland can, for the most part, is quite surprising.” for example, they’ve been revoked because leave their wealth to whoever they wish. But Garnham adds that many UK advisors someone got married and hasn’t realised that this is not the case in Denmark as forced heir- suggest that clients transfer their wealth to the marriage would revoke it.” ship rules apply in the jurisdiction. successors seven years before their deaths in David Kilshaw, private client partner at EY, However, the new legislation could have order to mitigate against IHT charges. How- suggests that although it is also well known significant implications on succession plans. ever, she points out that this strategy can be a that many clients “don’t have wills”, the pre- Julius Baer’s Simonius says: risk in itself. “It’s all very well but you don’t dicament is less stark for ultra wealthy indi- “Brussels IV is going to have a huge impact. know when you’re going to die so when viduals as many of their succession plans are It’s the first time where the law is defined a should the seven years begin?” dealt with through trusts (UK) and founda- little bit. Normally international law is not Michael Pagliari, partner at investment tions (Europe), therefore limiting the need for coordinated and laws of individual jurisdic- management, tax and accountancy firm a will for successful wealth transfer. tions can conflict with each other.” Smith & Williamson, also has concerns as Trusts and foundations are certainly provi- However, Simonius adds that many advi- he says that although wealthy individuals are sions for succession planning that are asso- sors are not fully informed on the intricacies “mulling” succession plans over, “less than ciated with wealthy individuals, especially if of the new legislation and that it will take a half of them have even started the process” they belong to multi-generational families. few years until the changes are fully recog- in his estimate. Kilshaw suggests that trusts and founda- nised. Berkeley Law’s Adamson says that The subject of mortality is not a favourable tions are often heavily integrated into Euro- although the new legislation is “laudable”, topic for anyone. However, a well thought pean multi-generational families. there are a number of issues that still need to out succession plan is paramount for a However, according to Kilshaw, creation of be clarified. <

www.privatebankerinternational.com August 2015 y 9

PBI 322.indd 9 03/09/2015 16:27:26 Private Banker International FEATURE AL RAYAN BANK

It even has a YouTube channel, with a selec- Britain's Sharia-compliant bank Al Rayan tion of slick animations as well as pieces-to- cameras with bank executives. It is all very undergoes a major revamp Generation Y, but what about the substance of the matter? Britain's first fully Sharia-compliant bank Al Rayan is gaining Sinclair, as the individual brought in to momentum. It has undergone a major revamp following the acquisition oversee Al Rayan's transition, says: "[3 - 4 by Qatar's Masraf Al Rayan (MAR) QSC in 2014. Franchesca Hashemi years ago] our online strategy was frankly appalling. asks Tim Sinclair, senior head of sales and marketing at Al Rayan, about "We rebranded all our digital assets in the bank's transformation and table topping products 2014, and that has supported us a lot." The online offering comes in three parts: part one is mobile enabled, where the cor- l Rayan, founded in 2004 under the ent and ethical standards, while interest – in porate website informs the audience about name Islamic Bank of Britain, has any shape or form – is forbidden. Funds are, products. At the same time, an online acqui- reinvented itself as a digitally-apt instead, generated on the Islamic finance sition platform has been developed through A financial institution. It boasts nine principle of Mudaraba, meaning the bank a sales force- all of which is coupled with a bases in England, a robust parent compa- and customer share an agreed percentage on broader investment in digital marketing. ny, and posted its first annual profit since the deposit. This calculation, according to Al Rayan has aimed to create a fluid one- inception for the twelve months preceding Sinclair, is set by the profit allocation com- stop shop for customer's internet-banking December 2014 of £1.2m. It is a modest mittee every month. needs. yet impressive figure, up from a £5.5m loss Currently, the customer's expected profit Could there be fist-flashing payment tools in the previous year. Yet the financial insti- rate (Gross P.A) stands at 0.15% for a Direct on the horizon? Sinclair gives nothing away: tution owes a large part of its success to a Savings account, 0.05% for On Demand "Last year we were the first people to launch £75m investment from Masraf Al Rayan Savings and 0.10% for Young Person's a Sharia-compliant notice-cash ISA, this year (MAR) in early 2014. Instant Access Saving (YPSA). While the we launched a fixed term ISA and an instant Tim Sinclair, senior head of sales and mar- accounts shown are subject to T&C, Al Ray- access ISA. Two of which are notice ISAs, keting at Al Rayan, believes the acquisition an's expected profit share is 40% for Direct while our fixed ISA is top of the tables." has been emblematic of MAR's desire to Savings Account, 50% for On Demand Sav- Alongside the existing nine branches, Al expand its global reach, as it is “looking to ings, and 50% for YPSA. Rayan is planning to open another three help individuals from the Gulf Corporation Customer deposits are invested in line branches in 2015, with Ilford and Slough as Council, Qatar in particular, invest in Lon- with UK regulatory requirements, as Sinclair key contenders. Yet other territories such as don but farther afield as well". explains: "The bank does not offer a prod- Leeds and Bradford are under consideration. The bank anticipates a 35/ 65 split in com- uct which enables the customer to choose Sinclair explains areas with 'relatively mercial/ retail assets in the short term, with only to invest in the London property mar- high Muslim population density' and 'sat- both areas expected to see further growth ket. Instead, it invests savers' deposits in Sha- ellite hubs' are strategically important. He going forward, according to Sinclair. ria compliant assets, such as property via Al says: "We are also looking into a model Al Rayan's flagship Knightsbridge branch Rayan's own Home Purchase Plan, Buy to where we have a HPP advisor that can do will cater to this commercial property goal Let Purchase and products and metals." transactional banking services on a smaller and, specifically, Private GCC clients. Yet in terms of the difference between a scale than a regular branch." He says the Knightsbridge branch is “tai- Sharia compliant business account and that Potential 'satellite hubs' include Birming- lored around the individual's personal and of any one of the UK business ham, Midlands and different parts of the financial needs”. accounts, Al Rayan's senior head of market- North, with Manchester as the focal point. "Staff at this branch can help with prop- ing and sales explains that in principle, both erty searches, as well as helping customers are similar: Adaptation and ethics understand how to identify property and the "The arrangement we have is that your Though there is a high percentage of Mus- UK processes." capital is always protected. In any case it is lims living in the UK, Islamic banking is not Sinclair explains Al Rayan has three cli- protected under the Financial Services Com- exclusive to the community. Al Rayan found ent-based propositions: standard, premier pensation Scheme. If we were ever - and to 87% of applications for its Fixed Term and private. emphasise we never have - unable to pay Deposit accounts from December 2012 to While the exact eligibility categories are the expected profit, a customer would still 2013 were non-Muslims. still a work in progress, premier requires retain their capital and profit earned up to Moreover, Al Rayan's figures show 81% high net worth individuals (HNWIs) to have that point, or exit the deal entirely." of its Muslim and non-Muslim customers £75,000 or more worth of Al Rayan depos- In both April and May 2015, Al Rayan will use Sharia finance in the future, and the ited savings or investments, a joint or sole paid more than double its expected profit bank is relying on its ethical standards and income over £100,000, or home finance in rate to its On Demand and YPSA customers, competitive products to speak to an inter- excess of £500,000. while Direct Savings account holders were national audience and gain support from all Interestingly, private clients will deal paid 73% more than expected in May. demographics. almost exclusively with GCC citizens how- Sinclair says: "We have an external ethics ever Sinclair reasons "crossovers" may occur. Digital and products committee [which is] the Sharia supervisory The most striking aspect of Al Rayan is its committee. They regularly audit us, much Interest versus Profit-Sharing Agreements smooth web design. This includes a presence like the external auditors KPMG. We also The crux of Islamic banking lists transpar- on practically every social media platform. have the head of Sharia compliance.” <

10 y August 2015 www.privatebankerinternational.com

PBI 322.indd 10 03/09/2015 16:27:26 Private Banker International SURVEY UNITED ARAB EMIRATES COUNTRY

UAE: Strong growth market for HNWIs The UAE is one of the largest wealth hubs in the Middle East and presents a growing opportunity for the wealth management and private banking industry. A recent WealthInsight report looks into the trends of wealthy individuals in the UAE in a review from 2010-14, and provides forecasts for growth in the period up to 2019

here is strong growth in the wealthy UAE’s total HNWI population n population of the UAE, which pre - in 2014. The number of UHN- UAE HNWIS – POPULATIONS BY EMIRATE, 2014 sents a captive market for the wealth WIs in the UAE increased by Rank by HNWI Number of HNWIs, Percentage of management and private banking 22.8% during the review peri - Population 2014(Thousand) HNWIs, 2014 T od, from 536 in 2010 to 685 in Dubai 29.6 58.40% industry. In 2014, there were 50,595 high net worth individuals (HNWIs) in the 2014. Abu Dhabi 13 25.70% UAE holding $263bn in wealth. Sharjah 3.1 6.10% The UAE HNWI population rose by Wealth management in UAE 4.8% in 2014, following a 7.6% increase Despite unfavourable world Ras Al Khaimah 1.8 3.60% in 2013. market conditions, the wealth Umm Al Quwain 2.4 4.80% According to WealthInsight, growth management market in the Ajman 0.5 1.00% rates for both HNWI wealth and numbers UAE is rising. The UAE market Fujairah 0.2 0.40% are expected to improve moving towards is attractive not only for local 2019 where the HNWI population is development but also to foreign Total 50.6 100% forecast to grow by 8.6% to reach 57,451. institutions, as it holds $95 bil- Source: WealthInsight Total wealth of HNWIs is projected to lion in wealth. grow by 30.7% to reach $364.1bn. WealthInsight expect private The ultra high net worth individual banks and institutions to rein- n ALLOCATIONS OF HNWI ASSETS (%), 2010–2019 (UHNWI) population was also significant force and centralize their opera- Asset Class 2010 2014 2019 with 685 resident individuals in 2014, with tions over the forecast period, Alternatives 11.50% 10.50% 10.80% an average per capita wealth of $157.4 m. and allocate more resources to Real Estate 19.80% 23.90% 20.70% The make up of this demographic included better understand their client 14 billionaires, 88 centimillionaires and base and provide higher levels Local cash 11.60% 8.80% 7.00% 556 affluent millionaires. of services. Foreign cash 12.80% 9.90% 7.90% UHNWIs accounted for 1.3% of the The leading domestic private Local bonds 1.70% 1.40% 1.10% banks in UAE are Emirates Foreign bonds 2.60% 2.00% 1.60% NBD Private Banking, Emir - n ALLOCATIONS OF HNWI ASSETS (%), 2010– ates Investment Bank, ADCB Local equity 11.10% 13.30% 18.20% 2019 Wealth Management, Union Foreign equity 8.90% 10.40% 12.90% Financial services & investments 25.9 National Bank Private Bank - Business Interests 20.10% 20.00% 19.90% ing, Mashreq Private Banking, Source: WealthInsight Energy & Utilities 13.1 ADIB Wealth Management, Diversified 12.2 National Bank of Abu Dhabi Private Banking, Sharjah Islamic Bank, during the review period, at respective Real Estate 8.4 Dubai Islamic Bank Wealth Management rates of 23.9% and 23.7%. Basic Materials 6.1 and Emirates Investment Bank. The proportion of alternative assets Construction & Engineering 5.9 Foreign banks are also active in the held by UAE HNWIs decreased during region and include Societe Generale, ABN the review period from 11.5% in 2010 to Retail, Fashion & Luxury Goods 4.9 AMRO Private Banking, Credit Suisse, 10.5% in 2014. HNWI allocations to com- Others 4.5 HSBC, Citibank UAE, Standard Charted, modities decreased from 2.8% to 2.4% Transport and Logistics 4.1 Barclays, UBS, Pictet, JP Morgan and over the same period. Arab Bank Plc (Dubai). According to WealthInsight, allocations Tech & Communications 3.5 in commodities are expected to decline FMCG 3.3 Asset allocation of HNWI investments over the forecast period to reach 1.9% Manufacturing 2.4 In 2014, real estate was the largest asset of total HNWI assets by 2019, as global class for UAE HNWIs, with 23.9% of liquidity tightens due to a forecast near- Healthcare 2.3 total HNWI assets. This was followed by term drop in demand for raw materials Hotels, Restaurants and Leisure 2 equity with 23.7%, business interests with from China. Media 1.2 20.0%, cash with 18.6%, alternatives with UAE HNWI liquid assets valued 10.5% and fixed-income with 3.4%. US$120.4 billion in 2014, representing Source: WealthInsight Real estate and equities recorded growth 45.7% of total wealth holdings. <

www.privatebankerinternational.com August 2015 y 11

PBI 322.indd 11 03/09/2015 16:27:27 Private Banker International NEWS TECHNOLOGY

Let’s talk technology: monthly update DST Systems and the bank don't change very action, FIS will take over 100% super funds with an easy to use completes purchase of much." of the equity of SunGard. The roadmap for growth by enabling Although the bank is focused $9.1bn cost includes the assump- more relevant and personal com- Wealth Management on a personal approach, Hoare tion of SunGard debt, which FIS munication between funds and Systems says that over 80% of transac- intends to refinance. members." DST Systems, a provider of tions go through the private The deal will lead to the crea- Mercer Edge is now available sophisticated information pro- bank's online channel. tion of a company offering a to any super fund administered cessing and servicing solutions, wide range of enterprise banking by Mercer. has completed the purchase of LPL Financial selects and capital markets capabilities Wealth Management Systems Advisor Launchpad for financial institutions and launches online (WMSI), a New York-based for digital marketing businesses worldwide. concierge service for employee benefit and technology solution The combined entity will have Silk Card users services company. annual revenues of over $9.2bn, DST Systems agreed to acquire LPL Financial has selected Advi- over 55,000 employees and Coutts has launched an online WMSI for $64m in July 2015. sor Launchpad, a digital market- thousands of clients in over 100 concierge service for customers WMSI offers retirement plan ing solution provider for finan- countries across the globe. of its Silk Card, in a partner- rollover technology, content and cial advisors, for its new Vendor The deal, subject to regulatory ship with Ten Group, a Lon - communications, and practice Affinity Program. approvals and other customary don headquartered lifestyle management solutions to the Under the deal, Advisor closing conditions, is scheduled concierge company. Coutts financial services industry. Launchpad will be responsible to close in the fourth quarter of customers already have access It services more than 33 mil- to help LPL Financial's advisors 2015. to a concierge service via phone lion participants and delivers create and execute advanced dig- Commenting on the acquisi- and email and the online service automatic rollover services to ital marketing strategies in order tion, FIS president and CEO extends this proposition. Cus- over 25,000 plan sponsors. to continually attract and retain Gary Norcross said: "This is a tomers who are using Coutts' WMSI's wide range of services clients. significant milestone for FIS. By Silk Card, a charge card that is and rollover solutions will now Advisor Launchpad said that bringing together two innova- available to all customers, will become part of the DST Retire- its digital marketing solution will tive companies with common automatically be eligible for the ment Solutions business unit. enable LPL Financial's advisors business models, similar cul- service, which allows custom- DST Retirement Solutions to publish fresh, targeted content tures, strong leadership and ers to gain access to special dis- offers defined contribution tech- that empowers and educates cli- complementary solutions, we counts and offers across travel, nology, strategic advisory, and ents, and promote their content are enhancing our ability to entertainment and dining. business processing solutions to with social media and email mar- empower our clients and deepen The online service will be the retirement industry. keting. client relationships through an accessible on desktops, tablets LPL Financial managing direc- expanded full-service offering.” and smartphones. There is cur- C. Hoare & Co. to tor and chief information officer rently no dedicated app for the launch mobile app Victor Fetter said: "Being able to Mercer introduces service but Stephen Light, direc- connect LPL clients with lead- super data analytics tor of digital private banking at C. Hoare & Co., is set to launch ing technology solution provid- platform Coutts, tells PBI that the service a mobile app in the first quarter ers adds a new dimension to the will be delivered via a "respon- of 2016. level of service and support we Superannuation consulting firm sive website that will be acces- The private bank, launched in can provide to clients to help Mercer has launched a new data- sible on a range of devices. The 1672, is the oldest bank in the them manage and grow their driven analytics, marketing, and online service also allows cus- UK. The news comes as clients businesses." strategy platform to increase tomers access to bespoke articles continue to have expectations of The Vendor Affinity Program super funds' understanding of on luxury lifestyle topics. comprehensive digital channels is a initiative designed to help their members. The new platform, Mercer from their banks. advisors reduce the complexity Other tech headlines Alexander Hoare, partner at C. and cost of running their busi- Edge, can predict, in near real- Hoare & Co., tells PBI that the time, members' behaviours, the nesses. The program offers a eVestment launches retail app will enable clients to "check company claims. centralised repository of vendors investment solution for advi- their balances and perform trans- According to the company, its who have been reviewed by LPL sors fers between accounts and to and have agreed to provide their new platform will provide super registered beneficiaries". Hoare products and services to LPL funds with a one-stop interac- Brewin Dolphin unveils new adds that there will be function- advisors at discounted prices. tive view of member data and D2C offering enables advanced segmentation ality for clients to access port- Accudelta launches new regu- folio information in the future, FIS to acquire SunGard of member bases, including: geo- latory reporting solution for however this feature will not be for $9.1bn demographic, behavioural, value asset managers available at launch. based and psychographic models. The app will be available FIS, a provider of banking and It also measures member satis- Fieldpoint Private selects across both Android and iOS payments technology solutions, faction and retirement readiness Wolters Kluwer’ platform for operating systems. "We've been has agreed to buy US-based using Mercer's unique Retire- risk analysis in this business for over 340 financial software firm Sun - ment Readiness Index. Thomson Reuters, Solvency II years. Technology does move Gard in a cash-stock deal worth Mercer managing director and Wire launch regulatory diag- on and you have to keep cur- $9.1bn. Pacific market leader, Ben Walsh, nostic tool for asset managers rent, but the needs of customers Under the terms of the trans- said:"Mercer Edge provides

12 y August 2015 www.privatebankerinternational.com

PBI 322.indd 12 03/09/2015 16:27:27 Private Banker International REGULATION NEWS

The latest in regulation A monthly round-up of the big regulatory announcements that impacted the private banking and wealth management industry across the globe

Two more Swiss banks reach individuals and companies access subsidiary was sold. cantonal and communal inheritance tax evasion deal with US DoJ to banking facilities if they fail to Also, German Hypo-Vereinsbank and gift taxes. For Belize, the Swiss banks Bank Zweiplus and register with the tax authority, in (HVB) has reached a EUR20m agreement will cover income tax, Banca dello Stato del Cantone a bid to curb rising cases of tax settlement for helping clients business tax, and general sales tax. Ticino (Banca Stato) have evasion. evade taxes through Luxembourg. The pact, which has to be signed an agreement with the The move comes in the wake SEB deploys Axioma’s risk approved by the Swiss parliament, US Department of Justice (DoJ) of a revelation that despite the management platform will be subject to a referendum over the tax evasion cases under presence of more than 440,000 Skandinaviska Enskilda Banken before it comes into force. the department's Swiss bank companies in the country, only The cantons and business (SEB) has implemented Axioma's programme. about 120,000 paid taxes. associations have already multi-asset class risk-management The programme requires Swiss As per law, tax evaders can be expressed their support for the deal. platform Axioma Risk. firms to reveal how they helped punished with up to five years in The new agreement brings the Axioma’s platform enables wealthy American citizens evade prison. total number of TIEAs signed by SEB's risk managers to establish taxes. FIRS chairman Sunday Switzerland to nine. alignment between the risk- Under the deal, Bank Zweiplus has Ogungbesan said it was difficult Switzerland's TIEAs with Jersey, management team and the agreed to pay $1.08m and Banca to track the financial activities of Guernsey and the Isle of Man have investment team. Stato will pay $3.39m in penalties those who did not pay taxes, most come into force and have been The platform helps in meeting to the US to avoid prosecution of whom said their firms were not applicable since 1 January 2015, the needs of both SEB's risk-and over allegations accusing them of active. while its agreements with Andorra, investment-management teams helping Americans evade taxes. "We are collaborating with the Greenland, San Marino, and the by providing multiple ways of As per the terms of the non- central bank to enforce compulsory Seychelles entered into force in looking at risk for multi-asset class prosecution agreements, the registration with the tax authority July and will be applicable from 1 portfolios - granular and factor bank has agreed to cooperate by companies and individuals January 2016. models, stress testing, VaR and in any related criminal or civil before they can access their sensitivities – in one system sitting proceedings and demonstrate bank accounts," Reuters quoted UK, Ghana sign tax deal to on top of a consistent data source. implementation of controls to Ogungbesan as saying. clamp down on tax evasion Rikard Andersson, asset class prevent misconduct. The UK government has signed a tax The DoJ said that Bank Zweiplus HSH Nordbank reaches EUR22m head - equities at SEB, said: "With deal with Ghana to help the West maintained and serviced 44 US tax evasion deal with Cologne Axioma Risk, we now have one African nation step up its efforts related accounts with an aggregate prosecutors common system, with everyone to clamp down on tax evasion, value of $12.1m since 1 August German lender HSH Nordbank talking about risk using the same boost revenues and enhance public 2008. has reached an agreement with numbers and looking at those services. The bank said that it cooperated Cologne prosecutors to settle a tax numbers in the same system. That The pact will enable Ghana with the DoJ under the US tax investigation. has really moved us forward, not to automatically receive tax program and encouraged its US Under the settlement, the bank only in terms of knowledge, but in information from HM Revenue and customers to enter the IRS offshore has agreed to pay about EUR22m terms of cooperation within the Customs (HMRC) on UK holdings voluntary disclosure program. ($24m) to settle a tax probe. organization itself." of Ghanaian taxpayers to detect Bank Zweiplus maintained News about the settlement SEB, which has more than undeclared assets, catch tax numbered accounts and structured was first reported by newspaper EUR180bn in assets under evaders and deter potential tax accounts which were owned by US Sueddeutsche Zeitung and management, has been a client evaders. persons including structures in broadcasting networks NDR and of Axioma since 2010, when it This deal will help Ghana to the British Virgin Islands and the WDR. implemented the Axioma Portfolio combat tax evasion and reclaim Bahamas. The investigation found that the suite. millions of pounds in lost revenue. Banca Stato had maintained a bank helped rich clients dodge As part of the deal, HMRC will total of 187 US related accounts taxes by setting up offshore shell Switzerland signs tax team up with Ghana Revenue with a total value of approximately companies in Luxembourg to hide information sharing accord Authority (GRA) to develop their $137m. The bank offered banking assets from tax authorities. with Belize expertise on tax legislation, services including hold mail and Sources familiar with the matter Switzerland and Belize have compliance and data privacy so that code name or numbered accounts to told Luxemburger Wort that signed an agreement for automatic they are ready for the automatic help US clients in concealing assets HSH Nordbank approached the exchange of tax information in exchange of tax information, due to from IRS. It also allowed US clients prosecutor's office to report the London on 10 August 2015. start in 2018. to direct repeated wire transfers activities of its former Luxembourg The tax information exchange Through this tax agreement, between $9,000 and $9,900. subsidiary. agreement (TIEA) governs the Ghana can maximise domestic Media sources said that the bank exchange of information upon resources and ensure people pay Nigeria to bring new rules to assisted clients to hide assets via request. their fair share of tax, allowing curb tax evasion its Luxembourg branch, by setting The deal will include Swiss federal, revenues to be invested into public Nigeria's Federal Inland Revenue up dummy companies in Panama cantonal, and communal taxes services such as health, education Service (FIRS) has decided to deny between 2005 and 2011, when the on income and capital, and the and infrastructure.

www.privatebankerinternational.com August 2015 y 13

PBI 322.indd 13 03/09/2015 16:27:27 / Private Banker International

ANALYSIS LIQUIDITY PROFILES: RILEY PINAULT

Liquidity profiles PBI has teamed up with sister company WealthInsight to provide monthly liquidity events that have piqued the interest of its analysts. This month, founder and Chief Executive Officer of Daisy Group plc,Matthew Riley, and CEO and Chairman of PPR, François-Henri Pinault

Matthew Riley Profile: Matthew Riley is a British entrepreneur and a supporter of UK enterprise. Oakley Capital Private Equity He is best known as the founder and Chief Executive Officer of fast-growth II (Fund II), a private equity firm Daisy Group plc, an AIM-listed IT and technology provider to businesses in based in Bermuda, has acquired the UK. minority stake in Daisy Group Riley is a supporter of UK enterprise and has delivered career advice for Holdings Limited, a provider of those in secondary education. Riley’s technology-focused involvement has telecommunication and managed now diversified to include a number of small growth businesses, each with services, from Matthew Riley and training and career development at its core. Toscafund Asset Management He continues to support business start-ups through his work as a fellow LLP, for a purchase consideration with The Prince’s Trust. of approximately £39m ($60.9m). Full Name: Mr. Matthew Riley Daisy Group and Toscafund are Gender: Male based in the UK. Toscafund Asset Management is Citizenship: a private equity firm. Daisy Group Languages: English is a supplier of business communi- Liquidity Event: 3 August 2015, Oakley Capital Private Equity has cations and IT services and solu- acquired minority stake in Daisy Group Holdings Limited for £39m tions to mid-market businesses. ($60.9m).

François-Henri Pinault Groupe Artemis, a company owned by Pinault family, has agreed to acquire Compagnie du Ponant, a luxury cruise line, from Bridgepoint Advisers Limited, a private equity firm based in the UK. Both Artemis and Ponant are based in France. Compagnie du Ponant with 189 employees, transports over 30,000 passen- gers per year and reported a sales of EUR140 million (USD151.58 million). Earlier in 2012, Bridgepoint has acquired Compagnie du Ponant from CMA CGM Group, a French container shipping group. JPMorgan Chase & Co., and Ernst &Young are acting as financial advisors, whereas Ashurst LLP and Boston Consulting Group are acting as legal advisors to Bridgepoint. The transaction is subject to standard Works Council and other EU clearances.

Profile: Francois-Henri Pinault serves as the CEO and Chairman of PPR, French multinational holding company having a worldwide portfolio of brands in luxury, retail, sport & lifestyle. Currently the company operates as a fashion conglomerate that owns high-end fashion houses including Gucci, Stella McCartney, Alexander McQueen and Yves Saint Laurent. It also owns sports and lifestyle brands Puma and Volcom. Full Name: Mr. François-Henri Pinault Known As: François-Henri Pinault Citizenship: France Languages: French Liquidity Event: 27 July 2015, Groupe Artemis has agreed to acquire Compagnie du Ponant from Bridgepoint Advisers Limited.

14 y August 2015 www.privatebankerinternational.com

PBI 322.indd 14 03/09/2015 16:27:28 Private Banker International PEOPLE MOVES NEWS

People moves This month, Jimmy Lee, former market group head of Hong Kong at Credit Suisse, became the head of Asia Pacific for Julius Baer, and Nicholas Angilletta, former director of capital markets at Morgan Stanley, was made the managing director and head of wealth management capital markets at Deutsche AWM. Here are the key people moves that recently made news

n PEOPLE MOVES Name Moved from Moved to Old position New position executive director and senior UK Loughlin Magowan UBS Julius Baer senior investment adviser investment adviser

Harpenden Building UK Hugh Titcomb Brown Shipley head of private banking non-executive chairman Society

Rathbone UK Nick Liddle Brewin Dolphin Investment divisional director investment director Management

McCue Wealth UK Mark McCue Barclays W&IM director, Aberdeen office Founder Management

UK Paul Pascoe Barclays W&IM N/A director, London office N/A

Nicholas managing director and head of wealth USA Morgan Stanley Deutsche AWM director of capital markets Angilletta management capital markets

Ascent Private Capital head of family office and strategic planning USA Eric Sanderson Bank of the West managing director of wealth strategy Management services

CFO of consumer banking and global USA Paul Donofrio Bank of America Bank of America wealth and investment management chief risk officer and chief financial officer (GWIM)

head of tax services for Europe, the USA Mariano Giralt BNY Mellon BNY Mellon head of global tax services Middle East and Africa

head of EMEA and Swiss distribution for Switzerland Harald Reczek Deutsche AWM Credit Suisse co-CEO of DeAWM Switzerland asset management

Switzerland Barend Fruithof Credit Suisse Julius Baer head corporate clients region head for Switzerland

Hong Kong Jimmy Lee Credit Suisse Julius Baer market group head for Hong Kong head of Asia Pacific

head of Trust Company and head of wealth Singapore Harry Ng Julius Baer Nomura North Asia head of wealth planning planning strategy & solutions

managing director, head of client managing director and regional head of Singapore Enoch Tan RBC solutions, Asia UHNW clients, ASEAN

Singapore Kelly Ng Permal AXA IM vice president director of private banking, Asia

CEO Global Investment Management Asia Hong Kong Michael Falcon JPMorgan JPMorgan Head of Asia Pacific Funds Pacific

Luxembourg Dennis Nygren Swedbank Catella managing director of asset management head of wealth management

www.privatebankerinternational.com August 2015 y 15

PBI 322.indd 15 03/09/2015 16:27:29 Private Banker International COMMENT HENRY CLIFFORD JONES, LINKEDIN

How to reach and influence Affluent PRIVATE BANKER Millennials and the power of social media Editor: Meghna Mukerjee LinkedIn’s Henry Clifford Jones, Director, Marketing Solutions - UK, Email: [email protected] DE and ES, discusses how banks can harness digital technologies to Tel: +44 (0)20 7406 6713 attract a new generation of wealthy young customers Correspondent: John Schaffer Email: [email protected] Tel: +44 (0)20 7406 6703 Delivering innovative Contibutor: Franchesca Hashemi

Group Publisher: Ameet Phadnis ver the last twenty years, we’ve seen The really good news for banks is Tel: +44 (0)207 406 6561 mobile & online financial services a dramatic shift in personal banking that this group of wealthy clients see Email: [email protected] with a move away from the High greater value in having financial advis - Sub-editors: Kev Walsh, Nick Midgley Street to online. ers and seek more involvement in finan - solutions to organisations that O Subscription Enquiries: Sharon Howley This is most pronounced among today’s cial decisions than their Gen X counter - Tel: +44 (0)20 7406 6615 generation of young adults – the Millennials parts. Once they select a provider, they are Email: [email protected] – many of whom have rarely visited their local also 50% more likely to remain loyal to that need to provide secure access bank branch. provider. Director of Events: Ray Giddings As the wealthiest of today’s young adults Tel: +44 (0) 203 096 2585 Email: [email protected] prefer to bank online, financial brands need Developing a social strategy to transform the way they engage with this There are four key strategies that banks should Business Development Manager: Alex Aubrey important group of new customers. consider when targeting the Affluent Millen- Tel: +44 (0)20 3096 2603 We conducted a study to better under - nial client. Email: [email protected]

stand how ‘Affluent Millennials’ - an emerg- WealthInsight Account Director: Matt Dowsett To find out more about us please visit: ing group of 18-34 year-old LinkedIn mem- The power of the peer Tel: +44 (0)20 3096 2592 bers with investable assets of over £75,000 With 70% of Affluent Millennials seeking Email: [email protected] www.intelligentenvironments.com - view banks, how they manage their finances opinions from their peers (compared to 50% Customer Service and what factors influence their choice of of Affluent Gen Xers) a key strategy should be Tel: 020 3096 2636 or 020 3096 2622 provider. the building of sharable content to encourage Email: [email protected] this valuable endorsement. For more information on accessing Private Banker The young, the rich and the socially-savvy International content online, or to subscribe, please telephone +44 (0)20 7406 6579 or email customer. Affluent Millennials are tech savvy, social Inform and influence [email protected] media experts who are actively engaged online This Affluent Millennials group devours and use a variety of digital channels. Thought Leadership – it was one of the most London Office 5th Floor, Banks that want to target this group must sought out pieces of content on social net - Farringdon Place, have a strong social media offering as a third works. Financial brands should share insights 20 Farringdon Road, of those surveyed said it was a ‘must have’. packaged into bite-sized accessible pieces of London, EC1M 3AP In fact, they are five times more likely than insight. Asia Office any other age group to expect social networks 1 Finlayson Green to be their source of future financial informa- Share your personality #09-01 Singapore, 049246 tion. People like personalities and Affluent Millen- Tel: +65 6383 4688 nials are no different. Fax: +65 6383 5433 Interested and invested By actively engaging through social media Email: [email protected] Affluent Millennials are hungry for informa- financial brands can demonstrate empathy Financial News Publishing Ltd, 2015 tion and actively seek content that educates and project your personality and a clear point Registered in the UK No 6931627 and empowers. They want peer reviews, of difference. ISSN 0265-0223 Unauthorised photocopying is illegal. expert commentary, published thought leader- The contents of this publication, either in whole or part, ship, product and service information provid- Fish where the fishes are may not be reproduced, stored in a data retrieval system or ed in a timely and relevant way. Can’t deliver? Social networks are destinations for Affluent transmitted by any form or means, electronic, mechanical, photocopying, recording or otherwise, without the prior We are an international provider of innovative mobile and online solutions for financial service No problem, they already know a brand that Millennials – in fact they are five times’ more permission of the publishers. can, even if they’re new entrants to the finan- likely to agree that they’re the hub for future organisations. Our mission is to enable our clients always to stay close to their customers. For information on additional copies or syndicated online cial industry. financial information than Gen X respondents. access to this newsletter, please contact Customer Services. The key task for banks is to identify which We do this through Interact®, our single software platform, which enables secure financial applications, Prudent, confident and loyal are most prominent social networks and use Millennials have been strongly affected by the smart segmentation to engage the right audi- engagement, transaction and servicing across all digital channels. Today these are predominantly financial downturn and are the group that ence at the right time. focused on mobile, PCs & tablets. However Interact® can and will support other form factors, as and most expects there to be another financial Ultimately, the companies that can align crisis in the future (39%). Yet they have con- their social engagement strategies with the when they proliferate (as seen by our work to develop digital banking for the Smartwatch). fidence in their future finances and are finan- demands of young wealthy professionals will cially prudent, saving more than the previous enjoy greater levels of trust and influence over We provide a ready alternative to internally developed solutions, enabling our clients with a faster generation. a key demographic. < route to market, expertise in managing the complexity of multiple devices and operating systems, and a

16 y August 2015 www.privatebankerinternational.com constantly evolving solution.

PBI 322.indd 16 03/09/2015 16:27:30 IE-Advert-Dec-2014.indd 1 16/12/2014 12:25:21 Delivering innovative mobile & online financial services solutions to organisations that need to provide secure access

To find out more about us please visit: www.intelligentenvironments.com

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We do this through Interact®, our single software platform, which enables secure financial applications, engagement, transaction and servicing across all digital channels. Today these are predominantly focused on mobile, PCs & tablets. However Interact® can and will support other form factors, as and when they proliferate (as seen by our work to develop digital banking for the Smartwatch).

We provide a ready alternative to internally developed solutions, enabling our clients with a faster route to market, expertise in managing the complexity of multiple devices and operating systems, and a constantly evolving solution.

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