Analytical Diaries

Conquering a new market – that is the appropriate headline over our last few days activities. We set sail to approach the Indian Private Banking & Wealth Management market with our methodology & technology platform. Mass Affluent, High Networth and Wealth Management are three universal descriptions of Private Banking client segments that have made their way to Mumbai, India’s financial center. But while the names are the same their meaning is largely different: Anybody how has funds he can place with his bank is considered Mass Affluent, the HNWI segment starts with funds over 2000 Euros and the Wealth Management domain at roughly 20.000 Euros.

So does this mean the services these clients expect are also of lower standards than their European equivalents? On the contrary: “Our clients are tech savvy and know their products”, says Head of ICICI’s Private Client function Mr. Balamurugan Ias. Hence Indian Private Bankers have to excel in a number of areas and they are learning fast. Some statements of hands on Private Bankers:

- You can’t offer our clients any fancy structured products if the ordinary domestic growth rate offers anything between 12 and 17% p.a.

- Our clients have a Do it Yourself mentality born out of years of individual stock-picking. If they buy mandate services you have to show absolute value add.

- Indian customers are very volatile – they are used to switching bank relationships 2-3 times a year and it is not appropriate to rebalance their portfolios simply because they switched the bank.

And even in these testing and competitive circumstances it is two areas Indian banks are investing in most: The improvement and standardization of client profitability reports and the establishment of proper investment suitability frameworks.

Hence we are on the right track, but clearly need to open up to a whole new level of service thinking. If the Indian marketplace is one thing, then it’s a training-field for what banks in the western countries are yet to expect: Emancipated clients.