By all forecasts, Asia is set to outpace the rest of the world in the coming decades in terms of economic growth and wealth creation. Which global financial hub will be the winner of this new era?
Based on various economic and demographic trends, Asia is projected by many to be the leader of politics and culture in the upcoming one hundred years. Dubbed the «Asian Century», such tailwinds are expected to fuel strong wealth generation relative to other regional peers.
As a result, private banks are actively eyeing such opportunities to support Asian high net worth individuals and their wealth management needs. But through which hub will they be best positioned to succeed?
Singapore: Geopolitical Advantage
In a panel at the «Wealth Management Summit» by FT Live and PWM, multiple top private banking executives chose Singapore as a leading hub for the present and future. In addition to some of the oft-cited benefits like a strong legal and regulatory framework or robust financial ecosystem, geopolitics was also mentioned as an advantage.
«This is the place to be in terms of tapping into the growth of the Asian century in wealth management,» said Joseph Poon, group head of DBS Private Bank. «Because of geopolitics, [Asian wealth] is deciding where to put their money if they want to sleep well. In some countries – no names mentioned – it’s no longer safe for them given what’s happened [with] the Ukraine-Russia war.»
Less «Boring» Lifestyle
Despite the advantages, there are nonetheless some downsides in Singapore. One popularly cited issue is the lack of vibrancy compared to rival hubs. But according to UBS APAC co-head of global wealth management Jin Yee Young, the city-state is an up-and-coming entertainment center with attractions such as the highly successful Taylor Swift concerts, a strong F&B scene, a world-class airport and options to travel to neighboring countries like Indonesia or Malaysia.
«I think we are really catching up in terms of vibrancy. I don’t think our clients complain that coming to Singapore is as boring as it used to be,» Young observed.
Hong Kong: Capital Markets
Nonetheless, the panelists noted that there will not be just a single winner with other hubs also benefiting from Asian growth, including Singapore’s regional rival.
«Anything to do with capital markets, Hong Kong is going to be the market to go to. It will not likely be Singapore. So when the capital markets become buoyant again, [clients] are going to reverse and go back to Hong Kong,» Young said.
Dubai: India Flows
Outside of the APAC region, the Middle East is also benefiting from Asian flows, most notably from India.
«There’s a natural affinity for Indians to go to Dubai,» said Nitin Singh, head of Barclays Private Bank, Asia. «Even if you don’t know English, you will typically survive if you know Hindi. You will tend to see a more South India bias towards Singapore and a more North India bias towards Dubai.»
Europe: NextGen Wealth
The panelists also did not rule out the continued role of European hubs. According to San-San Chan, Citi Private Bank's global market manager for Singapore, the growing number of global citizens is an «unstoppable trend» especially with regard to the next generation and private banks need to position themselves with a corresponding platform. She used an example of a Singapore entrepreneur with a son who has studied and settled in the UK.
«The father would set up a family office for the son in London,» she explained. «What we do is we have a dedicated banker out of Singapore because that’s where the dad is based. We then complement that with a banker team in London to help the family office. Together, they look at the entire consolidated accounts on a total relationship basis across the jurisdictions.»
