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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