Retail, not corporate, clients hold the key to the future for Asian banks, says Dick Kovacevich, former chairman and chief executive of US bank Wells Fargo.
'Right now, I think Asian banks are taking a lot of deposits and lending the money to commercial clients,' Kovacevich said.
'They should focus more on consumers and small businesses before it becomes obvious [that it is the way forward], and when it's maybe too late.'
Kovacevich, who held the top jobs at Wells Fargo for nearly 25 years, said wealth accumulation in Asia was picking up as the growth of the middle class translated into increasing demand for consumer products such as personal loans, insurance and mutual funds, and boosted the debit and credit card businesses.
In some parts of Asia, such as the mainland, most of these products are still mainly distributed by non-bank financial institutions because of regulatory requirements, although changes are in the air.
There are certain changes, however, that Kovacevich does not expect to happen in the Asian retail banking sector any time soon. These changes include an increase in lenders' exposure to investment banking, which is quite limited at present.