2012-09-03 04:08:09 - 2012 Private Banker International Yearbook - a new market research report on companiesandmarkets.com

The world´s private banking industry is in the midst of a tectonic shift. Like earthquakes, these seismic shakes have been of differing strengths with a variety of effects. Some of this movement is constant and subtle, slowly shifting beneath the surface and rumbling along without creating great ripples. The well documented re-balancing of global wealth from West to East is a classic example of this, a gradual process of wealth creation in new markets. Yet some of these effects have been violent and abrupt structural changes have shaken the industry severely. Several regulatory shocks have rocked the industry in 2011, and look set to continue in 2012. This has increasingly been led by US authorities, looking to claw back taxable

 

 

assets from their citizens.

As many as 15 private banks are understood to be being investigated by the US Department of Justice and Internal Revenue Service. Wegelin & Co, one of Switzerland´s oldest banks, was a victim of sustained regulatory pressure early in 2012. Credit Suisse, HSBC, Julius Baer and others are all known to be in conversation with US authorities and the effects of other regulators are also being felt. European regulators blocked the sale of KBC´s private banking unit, KBL, in 2011. The UK´s Financial Services Authority also stepped up the number and severity of fines it dished out to a range of wealth managers in 2011. The Foreign Account Tax Compliance Act (FATCA) is also waiting in the wings. This external pressure is having a knock-on effect on banking businesses as whole operating models are re-aligned to adapt to new environments. These changes are driven in part by regulation but also by wider macro-economic trends such as the Eurozone crisis. It is far from business as usual for wealth managers. It´s more akin to business unusual.

What is clear is that regulation, compliance and stricter enforcement are part of this new operating environment. In 2012 and beyond, wealth managers will need to focus on transparency and performance to increase client asset bases. Private banking strategists should be wary of these challenges, but not be overwhelmed by them. Global high net worth wealth continues to rise and international banks are recognising the intrinsic value of their private banking client bases. Embracing the struggle and adapting to this new operating environment is crucial for successful, sustainable businesses. These tectonic shifts also provide the chance for some much needed introspection.

Report Scope

• A bottom up review, with many top level interviews with senior industry figures
• A number of country surveys and market analysis are also included
• Excerpts from two wealth sector reports
• Interspersed with charts and tables tracking the key events during 2011

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