future of private sector banks in india

7/30/2019 Future of Private Sector Banks in India

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FUTUREOF PRIVATE BANK

IN INDIAPresented To: Presented By:

Mrs. Neena Sareen Ashima GargB.Com- Prof.-I

Roll No. 5908


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Aims of Presentation

Examines the future prospects for the private

banking / wealth management industry

Recaps key trends

Focuses on sources of new profitable growth:

Geographical areas

Client relationship deepening.

New areas / propositions Future industry structure

Critical success factors.


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Key Future Trends

Private banking firms need to develop their

businesses models and change (or enhance) their

strategic focus in order to take advantage of the

opportunities afforded by higher growth markets

and product segments. Global private banks are

actively developing activities in the three key

markets of India Growth in the offshore wealth

management area is expected to lag that of

onshore business.


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Transformation of wealth management


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Sources of new profitable growth

Geographic participation. Potential growth

opportunities in established and new markets

Client relationship deepening. Increasing the

penetration and loyalty of existing clients, andtargeting new client segments

New propositions. Developing product and

service innovations and personalising thewealth management advisory role.


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Geographic participation

New emerging wealth markets:

Particular attention has focused on the BRIC economiesSuch as India has projected economic growth over the

coming decades. Indias economy could be larger than Japans by 2032

Chinas larger than the US by 2041 (and the secondbiggest economy in the world by 2016)

Goldman Sachs forecasts show that the combined BRICeconomies will be larger than the current G6 (US, Japan,UK, Germany, France and Italy) by 2039.


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Overtaking the G6: when BRICs

US$GDP would exceed G6

Source: Goldman Sachs (2003).


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The largest economies in 2050

Source: Goldman Sachs 2003.


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HNWI financial wealth forecast by region,

20042009E (US$ trillions)

Source: Capgemini Merrill Lynch (2005), World Wealth Report Capgemini.


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Growth of multigenerational client

relationships, by client type, 20022004

Source: Capgemini Merrill Lynch (2005), World Wealth Report. Capgemini.


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New Clients

New clients will emanate primarily from those

economies expected to have the greatest

economic growth potential, namely Russia,

India and China These will have created their wealth through

entrepreneurial activity and will seek services

that reflect their greater familiarity with morecomplex financing options coupled with

relatively strong protection elements


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Non-financial lifestyle services

Lifestyle services are an umbrella term referring to a wide rangeof services designed to support, facilitate and improve thelifestyles of wealthy clients

Includes: 1. Lifestyle organization services aimed at assisting in organizing

and facilitating aspects of individuals lives such as leisure,entertainment, shopping and event planning.

2. Travel services aimed at supporting and arranging individualstravel requirements.

3. Property and home services aimed at assisting withindividuals household and property requirements including

finding, purchasing, moving and maintaining the home. 4. Luxury asset acquisition services aimed at helping wealthy

individuals in the purchase and management of large-scaleluxury items.


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Increasing client penetration and loyalty

Understanding the needs and aspirations of clients

Focusing on higher-value clients

Creating value-added services for clients.

Focus on delivering relevant value to targeted clients. That,of course, requires wealth managers to understand the

needs and expectations of clients and also really demands

that the relationship manager understands more precisely

what clients value.

Confidentiality

Security and

Performance are important value-enhancing propositions.


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Lifestyle services

Source: Datamonitor, Incorporating Lifestyle Services into the Wealth Management Proposition Survey, May 2003,


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Aggregator role

The industry is increasingly being viewed (and talked about) asan aggregator, whereby a whole range of suppliers, bothinternal and external to the bank, offer a range of services thatcan be offered individually or bundled together to meet clientneeds.

Such aggregation activity means that wealth managers have tobe much more nimble and efficient in sourcing, distributing andidentifying value-enhancing services (for both the client and thebank).

The aggregator function of wealth managers, and the growing

focus on value-added advice led sales, has encouraged (orforced) the industry to consider developing their business alongsimilar lines to the family office, with the aim of offering holisticand independent advice.


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Industry Structure - Evolving to the next

level of a global trusted advisor?


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Winners and losers in European wealth

management over the next 3 to 5 years

Source: Mercer Oliver Wyman (2005).


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Key is to develop common skills in

building relationships

Source: IBM Consulting Services (2005).


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Conclusion

Examines the future prospects for the privatebanking / wealth management industry

Focuses on sources of new profitable growth: Geographical areas China, India, Russia

Client relationship deepening focus on mid-wealth HNWIsand intergenerational wealth planning services + focus onholistic advice

New areas / propositions women, ethnic groups, lifestyleservices, family office style services

Future industry structure

Critical success factors - building on relationships, morevalue-based approach to business and clients

future of private sector banks in india

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