Rise of the regionals

"Ten years ago, private banking was associated with international names only," says Alan Luk, head of private banking and trust services at Hang Seng Private Bank. He recalls as a local player, it wasn't easy to pitch for business to Asian investors who preferred having their accounts with the big names.

"The financial tsunami was the turning point," says Luk. "Safety, visibility and interaction became the criteria and there was a shift of assets to the local private banks."

Luk refers to a shift in perception to which the large international banks were vulnerable during the crisis. By comparison, many of the more moderately rated and capitalised regional banks sailed through the crisis, showing their capital positions and risk controls to be much more conservative than their global peers.

Meanwhile, much of the new wealth creation globally is happening in Asia. All private banks are competing for Asian clients, but the regional banks with long-standing relationships with locals through their consumer banks find themselves on a strong competitive footing. They know who is rich, and they know their investing styles, because they've had many of these people as clients for years.

Regional banks are staffed by people actually from the region, which arguably gives them a more natural relationship with their clients (the international banks seem to understand this as they are now appointing a lot of local people to management roles.

Finally, the regional banks work with low-cost structures that give them flexibility to deploy resources to services that make a maximum impact with clients.

All of which paints a picture of why regional private banks are emerging as worthy competitors to international institutions for the all-important Asian market.