A blurring of the line dividing private and priority banking services combined with advances in technology has some private bankers feeling the heat under their starched white collars. 'Some private banks, without a doubt, have been feeling [more intense competition from retail banks],' said Stephen Richards Evans, regional chief executive at Lloyds TSB in Hong Kong. 'The ones that have been feeling it are those that have not been able to clearly differentiate between a priority banking offer and a private banking offer.' However, others remain adamant that their business will be untouched even as more retail banks target wealthier clients. 'Private banking focuses on a different segment of clientele and customer requirements. As such we are not in direct competition with priority banking,' said SG Private Banking Asia-Pacific chief executive officer Daniel Truchi. JP Morgan Private Bank Asia chief executive Michael Fung said: 'The affluent and the ultra-high net worth segments are very different. We do not see players in the retail segment eating into our market.' In January, the Bank of East Asia launched its SupremeGold service, available to customers who have a combined HK$500,000 in their deposit and investment accounts. Dao Heng Bank unveiled its Treasures Priority banking service in November with a similar entry requirement, and Dutch-based ABN Amro recently made its Van Gogh banking service - already offered in Singapore - available to Hong Kong clients. At the other end of the spectrum, some private banks - such as American Express and SG - have blurred distinctions between the rich and the not-so-rich by requiring only US$1 million (HK$7.8 million) in investment to become a new client. Lloyds TSB last year began seeking out what it calls 'emerging markets', meaning clients with US$500,000 but whose assets are growing. 'Are the two services completely different? No, I think they are different parts of the same family in some respects,' said Mr Richards Evans. 'The difference between priority banking and what is termed private banking is a question of degree, and I think the degree is in terms of the relationship with the customer.' As the market for the affluent grows more crowded with priority banking services, retail banks come armed with an array of services and technology that gives the impression of more customised service. Retail banks also have the advantage of being able to cherry-pick the choicest clients from massive pools of customers. Private banks must respond by doing what they do best - focusing on the customer, according to Mr Richards Evans. 'In the true sense of private banking, the relationship with the customer can be so intensive that it branches off into other areas.' Private bankers usually are more experienced and serve fewer clients - typically fewer than 100 - who are on the whole, wealthier. They are also geared towards more sophisticated banking needs. Sometimes, this means offering help in non-banking matters. Lloyds TSB recently found a nanny in London for one of its local clients. The customer had wanted to send their child back to Britain for school. But when the school insisted on quarantining the student because of the Sars outbreak, the bank was enlisted to search for a caretaker. American Express, meanwhile, said it sometimes sent the children of its clients - some in their teens - to the United States to learn about financial planning. Priority banking services leverage on off-the-shelf products of their mass market-oriented cousins by providing dedicated bankers to manage specific customers' finances. This manager would normally oversee hundreds or even more than 1,000 clients - depending on the bank - and where regulations allow, suggest investments. In exchange for the vast sums of money customers park in their deposit accounts, priority banking usually provides perks such as 24-hour telephone hotlines, pre-approved credit cards, preferential interest rates on loans, and fee waivers on services such as bank drafts. Priority retail bankers acknowledge that even with the advances in technology, and their massive customer bases, what they can offer is not yet up to par with their more elite counterparts. 'With private bankers, they can tailor-make some products such as market-linked notes for the customers - we can't do [this level of customisation],' said Citibank's country marketing director Weber Lo. 'But for mass products like mutual funds and bonds, we can do everything that they can.' Bankers on both sides insist that how one chooses to bank depends on financial needs, not wealth. For example, if a client's needs are limited to a straightforward local currency mortgage in Hong Kong, the city's retail banks can adequately provide that service. However, the point where private bankers come in is when clients need to arrange, for example, mortgages for multiple homes in different places across the world. Customers get what they pay for, with private bankers using flexible fee structures adapted to individual clients' needs. Their retail siblings have more transparent charging structures based on transactions. Clients with a mere US$500,000 to invest are unlikely to see their money go far at a private bank in contrast to wealthier clients with more funds to invest. 'It's all about what you get for your money,' said American Express's David Wong. 'You can walk into Maxim's fast-food restaurant and put down HK$100, but they will still give you the same cup of tea that you would get if you paid HK$10. But you would expect to get a very different cup of tea if you walked into the Peninsula Hotel.' Some people hold a priority banking account in addition to banking privately to take advantage of some services - such as ATMs and telegraphic transfers - at which retail bankers excel. Citibank's Mr Lo said his clients are customers of an average of 1.6 banks. Mr Wong said: 'I won't be surprised if [Cheung Kong Holdings chairman] Li Ka-shing had a Citigold account.'