Private banks vie for Asia's rich as wealth shifts

Sources: Financial Times, Forbes, Merrill Lynch

While hot spots such as Hong Kong, Singapore and Shanghai have been epicentres for wealth generation for the past few years, the rate of growth is now rising fast. The number of millionaires in the Asia-Pacific region grew by 25% in 2009, catching up with Europe for the first time, according to the latest annual World Wealth report from Merrill Lynch and Capgemini. Meanwhile, the combined wealth of Asia-Pacific’s rich individuals rose by more than 30% to US$9,700 billion in 2009, surpassing the US$9,500 billion held by Europe’s richest people. As for Asia's billionaires, Forbes estimated that they have a combined worth of US$729 billion in 2010, up from US$357 billion a year ago.

The rapidly rising number of affluent individuals has left financial institutions struggling to keep up with the booming demand for private banking services. Big global banks are now ramping up investment in their private banking operations across many emerging markets. The majority of this growth will be in the core Asian markets – Hong Kong, Singapore and China – with big expansions plans for their Indian businesses. Banks are also trying to differentiate themselves by offering increasingly global services to clients. They are now focusing more on transparency, risk management, custom advice, advice-based compensation models, cross-selling, and client education communication and reporting as well as diversifying the client base.