At a time of turbulence and retrenchment, private banks increasingly seek success by narrowing their focus to design and deliver highly targeted wealth solutions.
Private banks promise safety and stability to the clients who entrust them with trillions of dollars, but no quantity of Italian marble and walnut paneling could shield the industry from the disruptions of the past few years. A business based on confidentiality, private banking continues to struggle with the glare of publicity since the Panama Papers laid bare the offshore arrangements of some of its biggest names. Its unhurried culture of personal attention is scrambling to adapt to the 24/7 digital age and provide always-on luxury with a contemporary image to the growing ranks of wealthy millennials and the emerging rich.
Asset growth has been hard to come by since early 2015, when world equity markets turned choppy after a steady six-year bull run and safe bond returns dwindled to near or below zero. An ascendant dollar has further eaten into portfolios in private banking’s European heartland. Eight of the global top 10 saw assets under management shrink in dollar terms for 2015, a trend that has likely continued this year. Without easy top-line gains, pressure grows to increase staff productivity and do more with less.
Some banks are winning by going where the new money is—like Silicon Valley, where BNY Mellon bought burgeoning wealth-management boutique Atherton Lane Advisers, or Southeast Asia, where industry retrenchment is lively. Singapore-based DBS Private Banking has been on an acquisitions spree, and earned top marks in Asia-Pacific (four awards overall), cementing its position as a rising challenger to the Western global giants. Others are providing traditional safe havens for client wealth threatened by erratic government—like Santander, whose award-winning Latin American operation draws heavily on Venezuela and Argentina—or laying bridges from an emerging region to the wider financial world, like Standard Bank, our top pick in Africa.The world’s best private banks, as determined by Global Finance, are finding ways to meet these challenges and recast their businesses for the future. Global champion UBS has delved deep into interactive technology to modernize a venerable brand. Citi Private Bank, winner in the Most Innovative category, took a leap toward transparency by asking clients of its Swiss branch to waive traditional banking secrecy.
There is more than one way to react to changing circumstances. Santander is trying to bring private banking to the mass affluent in the UK by lowering its minimum, while US powerhouses J.P. Morgan and Citi take the opposite tack: raising their antes to $10 million and $25 million, respectively. Not to react to changing conditions is to risk obsolescence. These awards show there are plenty of private banks moving toward the future without sacrificing the past.