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Wealth Management

Wealth Management

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Wealth Management

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  1. Wealth Management 1st June 2006 Banking Vietnam

  2. Agenda • No Time Like The Present • Back to the Future

  3. Wealth Creation in Vietnam • Wealth generated by entrepreneurial activity • Creation of Nouveau Rich “New Money” • General investment strategies tend to be: • Property Market • Stock Market • Savings • Cash / Asset Rich – “Time Poor”

  4. Vietnam’s Economic Growth • 2005 and 2006 GDP growth of 8.2% • GDP growth by: • Industry and construction sector’s 10.37% growth, • Service sector’s 8.29% advance, • Rising incomes and consumer spending driving retail sales up 20.7% year-over-year. • Q1 2007 GDP • 7.7% year-over-year • 7 year high.

  5. VN-Index History VNI Today  1039.6    VNI year high 1170.67    VNI year low 741.27    VNI life high 1170.67    VNI life low  100 Stock Markets Today

  6. Property Markets Today • Rising Property Prices • More 100% increases especially in high end property

  7. Back to the Future • Remember Thailand, Korea, Indonesia…….. • Booming economies • Entrepreneurial successes • In 1997……Wealth hit badly by the “perfect storm” • Collapse of stock market • Falling property prices • Falling interest rates • Collapse of the banking system

  8. The Realization • With the depletion of wealth, the lack of time to manage both business and personal wealth, proper management of wealth became increasingly important to those who want to achieve their financial and investment goals including: • Protection of Wealth for future family generation • Maximizing returns on investments through diversification • The need for a sound banking system to support the economic growth of the country

  9. Vietnam’s Banking Modernization Program Government’s intention • The Banking Modernization is being pursued by banks in Vietnam in the context of the national socio-economic development plan which is set at the level of the National Assembly. • Promoting public confidence in the banking system • Fostering efficiency and competition in the sector through equal treatment for all participants and through modernization of common systems. • Competition for banks- operating in open market conditions against both domestic and foreign competitors. •  Moving toward a market-based policy in monetary management: e.g. establishment of a stock exchange market

  10. General Focus of Banking Modernization Program • Broadening the Customer Base • Launching new Products and Services • By: • Expanding of the Branch Network • Grow total assets and the number of customers • Attain balanced portfolio of assets to strengthen the bank’s financial stability • Widen range of products and services beyond current set • Diversification of the bank’s sources of income

  11. Current IT Requirements Focus • Upgrade and Modernize the Core Banking System and related systems • Upgrade and extension of the current online network • Re-Engineering and Redesign of the current Operational Procedures

  12. Customer Segmentation 15-20% of customer base % of Fee Based Income % of Consumer Funding & Time Deposit HNW Priority Customer Mass Consumer

  13. In Asia • Asia-Pacific is the fastest growing market for wealth management services activities • Accounting for 25% of US$10.5 trillion • Bank providing such services expects • Profits growth of 15% • Asset under management grow by 20% What about Vietnam?

  14. The Gap • Following 80:20 rule – 80% of the wealth is held by 20% of the population • IT Budgets spent to develop banking infrastructure for the mass market • This gap is typically identified by foreign banks

  15. Bank’s Opportunity To: • Deliver flexible, customizable and customer-specific financial and non financial solutions • Provide structured, managed and advisory services on timely basis on the asset & liability of clients in order to achieve their financial and investment goals through: • Financial planning • Active Advisory • Portfolio management • Personal touch, trust and understanding between advisor and valued client as a foundation to a long lasting relationship

  16. Bank Opportunity Wealth Service management: • Provided a different market segment and potential • Recognized emerging needs of savvy high net-worth individuals for excellent services and sophisticated products • Tapped on steady stream of fee based revenue • Ability to retain and acquire new customers

  17. Product-Service Segmentation Priority Mass High Nett Worth Current Savings Time deposit Loans Unit Trust Bonds Securities Bancassurance FX Money markets Options Self Service Relationship Management Highly Personalized Service Customer Profiling /Asset Allocation Portfolio management / Consolidated Customer view

  18. WM Solutions to enhance and complement existing Core Banking system Branch Internet Phone Is this`enough for Priority customers? Delivery Channels • Portfolio revaluation • Portfolio benchmarking • Model Portfolio • Simulations / What if scenarios Portfolio Management • Need to: • Widen Product Offering • Understand the customer • Increase Service Levels • Proper reports • Reduce manual ops • Tarriff & conditions • Collateral Management • Order management • Broker-Custodian Relationship • Agents Fees • Risk management Order Management Client Management Sales Management Investment Products Financial Products Banking Treasury Securities Options MM Unit Trust Bonds Equities Deposits Payments FX Cards loans • Single view of customer • Consolidated statements Bank management Systems Core systems

  19. Managing the growth opportunities • Need to manage the relationships • Customer relationship • Portfolio management • Portfolio benchmarking • Partnership with fund managers and other 3rd party providers • Order management • Collateral Management • Settlement • Fees and commissions • Efficient and streamlined operations

  20. Functional Overview Banking Modules 3rd Party Products Providers Customers Wealth Management Modules Bonds Stocks &Shares Mutual Funds……. Clearing Houses Stock Exchanges Custodian

  21. Functionality and Modules Wealth Management Modules Client Relationship Management Asset & Portfolio Management Client Accounting & Reporting Clearing & Custody Order Management Settlement • Securities ID • Securities accounting • Bank portfolio • Model portfolios • Portfolio valuation • Orders • Paying agent • Corporate actions • Repos • Advanced private banking management

  22. Key Success Factors • Clear target market / customer segmentation • Established Customer Information System • Good MIS / reporting and Business Intelligence • Profitable Customer Relationship • Wide and innovative products and services • Product differentiation • Efficient Cost Management • Good IT infrastructure • Increased productivity /Reduce manual operations /Reduce human error • Knowledgeable staff

  23. Profile • More than 20 years in the Financial Services Industry • Previous Appointments: • VP Asia Pacific, Sungard System Access • Regional Director CashTech Asia • General Manager, Asia S1 Asia Pacific Managing Director, Asia Pacific Callatay & Wouters

  24. C A L L A T A Ÿ& W O U T E R S F i n a n c i a l S o f t w a r e Visit Us @ Banking Vietnam