Standard Chartered to hire, promote 3,000 as it targets business clients, rising incomes in Asia
- Standard Chartered seeking to service clients across their life cycles, from affluent to ultra-high net worth customers, as part of wealth push in Asia
- The bank added more than 400,000 new clients in its affluent business in the 12 months ended in March
Unlike some competitors who are only aiming for the region’s wealthiest, the London-based bank is putting a significant focus on so-called affluent clients in Asia – customers with US$100,000 to US$125,000 to invest - according to Samir Subberwal, the bank’s head of consumer, private and business banking segment in Asia.
The market for the affluent and the “emerging affluent” represents a “sweet space” for the bank, which operates in more than 59 markets globally and is focused on emerging markets, Subberwal said.
“There are certain banks that are just true-blue private banks, who operate in US$20 to US$25 million [segment]. They are trying to come down in their value chain in some ways,” Subberwal said. “We are a big retail bank with a big footprint in our markets. We participate in all segments from mass market to mass affluent to affluent to ultra-high net worth. It gives us the advantage of a continuum of customers as we are acquiring customers at various life stages.”
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In 2020, Standard Chartered generated about US$3.5 billion in global income from about 2 million affluent customers, in line with its prior-year results despite economic challenges from the coronavirus pandemic. In the 12 months ended in March, the bank added more than 400,000 new affluent clients, with about two-thirds coming from its existing mass retail clients. The lender counted about 7.6 million mass market customers at the end of 2020.
As part of its greater focus on the affluent segment, Standard Chartered has focused on expanding its digital capabilities, using a hybrid of digital services and traditional advice by relationship managers, Subberwal said. The bank recently introduced a new product called My RM in Hong Kong, Singapore and United Arab Emirates, allowing clients to interact with their relationship managers electronically and expects to roll it out elsewhere soon.
“We continue to expand our RM and specialists capacities in all markets,” Subberwal said. “The affluent customer [and] the ultra-high net worth customer like to have an RM, an adviser to manage their wealth, [so] we continue to invest in that.”
Depending on the market, Standard Chartered offers relationship manager services to clients who have about HK$1 million (US$129,000) or more to invest. Clients with between US$1 million and US$5 million are eligible for its priority private service, which offers a higher level of personalised solutions, while clients with more than US$5 million can access its private bank.
“We’ve built our platform for enabling Wealth [Management] Connect. We also have our product suite ready to offer to customers in the GBA as and when that opens up. We’re obviously working with the regulators on both sides for appropriate approvals to be in the first batch. We are already a bank identified to be in the first batch of banks,” Subberwal said. “It’s a huge opportunity for us.”
Wealth Management Connect alone offers the opportunity to market to as many as one million new customers in the immediate term and presents a broader opportunity as the GBA and other parts of China as capital controls ease over time, he said.
As part of its efforts in the GBA and across Asia, Standard Chartered is exploring potential partnerships with other banks to attract and drive customers.
“Partnerships are a cornerstone in our mass-market strategy. Cost of origination is significantly lower through a partner,” Subberwal said. “Cost to serve in many of these partnerships is also lower because the partner serves, in some models, the customer as well.”
The opportunity is huge, as mainland onshore wealth is expected to grow at a faster pace than offshore wealth, particularly in the ultra-high net worth segment, according to Citigroup.
“Through reforms, mainland China is increasingly opening up its capital market to foreign financial institutions (FIs), which poses potential new growth opportunities for foreign FIs to serve the emerging middle class onshore,” Citigroup analyst Tian Yafei said in a research note on Wednesday.
“The onshore market is dominated by domestic banks that have a broader customer base, wider distribution network and economies of scale. Domestic banks are also narrowing the product and service gap with international FIs,” she said. “Hence, head on competition with domestic players so far is proving to be challenging.”
“The market opportunity [in wealth], the revenue pool is very large,” Subberwal said. “Even in a very crowded market, we can grow our own revenues and we have been. Over the last five years, I think our wealth income on a [compound annual growth rate] CAGR basis is growing at 8 per cent. It’s not small in the context of markets we operate in.”
