The executive roundtable in Geneva to reveal findings from the white paper Tryst with Transparency: How private banks in Switzerland and Singapore are ensuring best-of-breed service in a demanding regulatory ecosystem led to enlightening discussions, potent questions and valuable insights. Meghna Mukerjee provides an overview of the event
The exclusive executive roundtable, hosted at the Mandarin Oriental in Geneva, Switzerland, was aimed at select representatives from Switzerland’s banking industry. The afternoon was dedicated to revealing key findings from the whitepaper Tryst with Transparency: How private banks in Switzerland and Singapore are ensuring best-of-breed service in a demanding regulatory ecosystem as well as encouraging discussion and debate around the themes that the whitepaper tackles.
Written by Private Banker International and sponsored by DTCC, the whitepaper highlights how both Switzerland and Singapore are ensuring client centricity in an era of increased transparency and regulatory pressures, as well as establishing future best-practices. The presentation of the key findings was carried out by Meghna Mukerjee, editor of Private Banker International.
"Switzerland and Singapore are arguably two of the world’s most important wealth hubs, and they personify two distinctive financial markets. While Switzerland is the world’s largest destination for cross-border wealth management with centuries of traditional private banking experience, Singapore represents a fast-growing and consistently flourishing wealth hub, supported by the rapid rise in regional wealth, the number of wealthy individuals, and global popularity.
"Despite facing their unique industry dynamics, our research found that C-level executives at private banks in both Switzerland and Singapore are grappling with the same concerns," said Mukerjee.
The whitepaper presentation was carried out in two sections. The first half discussed two key themes from the whitepaper – Successfully coping with a multitude of regulatory demands and Ensuring client centricity while meeting reporting obligations. After revealing insights from these two sections, the topics were opened up to the executives around the table for further discussion and scrutiny, which led to insightful conversations and observations.
The conversation started with the discussion around cross border wealth management.
"The banking industry in Switzerland has made its peace with the fact that there will be more transparency, but details around cross border wealth management are stifling small banks. The big global banks can rationalise booking centres and client segments and find ways around profitable and effective cross border wealth management, but there are many small banks in Switzerland that have to abide by several rules across different countries and they don’t have a physical presence in all these countries.
"These small banks don’t know how to do cross border banking anymore and most of private banking will remain cross border. These small banks don’t have ways to set up operations in more countries or service clients of nationalities and residence. Additionally they have restrictions around all the products they can offer as well. That is a considerable issue," said an executive.
The topic of outsourcing was also widely discussed by the executives as a function that is gaining popularity among tier 1 private banks as opposed to only being preferred by tier 2/tier 3 banks. An important point mentioned was that due to the increased move towards transparency, outsourcing is getting a boost among private banks. Historically, a primary hindrance to outsourcing was the several layers around client confidentiality that banks needed to adhere to.
According to the executives participating in the roundtable, despite recent reputational issues, Switzerland remains the premier hub of private banking, and its wealth of expertise and quality of service set the country apart from all the other financial centres across the world.
These conversations were followed by a coffee and networking session. Going back to the key highlights from the whitepaper, the second half of the event discussed three crucial topics that have been explored in the research: Importance of efficient data management in an era of transparency, Riding the KYC and AML wave in stormy regulatory times, and The value of promoting a culture of innovation.
Talking about the amount of data that private banks need to collect, refresh and report regularly due to recent rise in regulatory demands, the advent of banks working together in a collaborative environment was considered. This approach would particularly be useful for the commodity-type, reference data that private banks need for its KYC functions.
An executive also pointed out that the technology department at private banks and particularly the data management units are not aligned with the business side, and there needs to be more interaction between these units so that IT strategy and operational strategy are working together as well as gaining from one another.
The topic of innovation in private banking was also touched upon. Everyone agreed that innovative thinking needs to become part of the DNA of the private banks for them to remain relevant and forward thinking. This was completely in line with the findings of the research as well. The engaging afternoon ended with a networking and drinks reception.