Standard Chartered Bank’s Ali Hammad, Market Head – Private Banking at Standard Chartered MENA shares insights on attracting wealthy families in the Middle East, the role of nascent technology in banking and how private wealth is dealing with the impact of COVID-19. Below are the excerpts of our interview.
What differentiates your business in the Middle East and what attracts wealthy entrepreneurs and families to Standard Chartered Private bank?
Ali Hammad: Standard Chartered has a unique position in the Middle East. We are an international bank with a unique global footprint that continues to provide clients with access to some of the biggest growth markets around the world and expertise to make the most of every opportunity. Relationships with clients are at the heart of everything the Bank does, and its full spectrum of banking services offers clients the opportunity to grow and protect both their business and personal wealth, helping to build an enduring legacy for the future. This, importantly, is coupled with our deep-rooted history in the region, local insight, and on-ground capabilities. Additionally, despite our long-standing history, we remain innovative and are continually enhancing our services based on the current market and evolving needs of our client.
Our investment philosophy stems from the Bank’s commitment to empowering its clients to make unbiased investment decisions and make the most of their wealth, with a transparent process to curate and debate diverse insights for more objective advice. This is combined with open source access to solutions that meet their goals.
In 2019, the Bank’s growth was fuelled by strong income and Net New Money. It was the third consecutive year of top-line growth with the business generating income of $577m, which was up 12% YoY. It was also the third consecutive year that the business delivered positive inflows with Net New Money at $2.6bn.
Over the past year, the Private Bank has also continued to drive performance by incorporating environmental, social and governance (ESG) considerations into investment decisions, the foundation of sustainable investing. It is also one of the key pillars on which our sustainability aspirations are built to truly be a force for good.
As such, we’re recognised as an industry leader in wealth management across our key markets, specifically the MENA region.
How important of a role has nascent technology such as Machine Learning, AI and Big Data played in your firm?
Ali Hammad: From retail and private banking, to digital only banks, Standard Chartered has placed the integration of progressive and disruptive technologies at the fore of its robust offering. On the ground, financial institutions are feeling the heat of a sluggish economy. In particular, private banking institutions are heavily impacted.
Our use of state-of-the-art technologies stems across the entirety of our operations. For instance, across eight markets on the African continent, client onboarding is fully digitised and takes less than 15 minutes. A client can open a new account entirely through our award-winning SC Private Banking app anytime, anywhere – from the comfort of their own home or while on the road, thanks to the accessibility and ease of our solution. It provides a secure means for clients to communicate with their Private Banker, access investment publications, view all registered activity and manage personal details and preferences online. As of June 2020, the Bank has recorded around a 40% increase in client usage over the past six months.
We are continually innovating our products and services to ensure we’re able to remain ahead of the curve. For example, the Bank’s proprietary open banking platform, aXess, serves as one of our many uses of progressive technologies, wherein the platform drives connectivity and partnerships between external developers, corporates and fintechs. The platform enables participants to co-create better client products and services through the sharing of APIs and libraries.
The Private Bank has also enhanced its trading capabilities for clients with a leading FX derivatives platform, called FXD Connect. It delivers the best solutions at competitive market prices while cutting response times by more than 90% to less than a minute. Standard Chartered Private bank is one of the first banks to launch the FXD Connect platform, positioning the Bank as a leading FX house in the industry.
Similarly, we were among the first international banks in the UAE to launch the major wallet solutions, including Apple Pay, Samsung Pay and Google Pay, giving customers the flexibility to complete mobile transactions faster, and through the wallet partner of their choice.
We will continue to invest in expanding these functionalities to evolve with our customers’ changing lifestyles and needs. These introductions, of course, could not have been plausible without the progressive abilities of tools such as AI, Big Data and Machine Learning.
Over the past year, Standard Chartered Private Bank has continued to drive performance by incorporating environmental, social and governance (ESG) considerations into investment decisions, the foundation of sustainable investing.
What is your outlook on the impact of COVID-19 on the private wealth landscape over the next 12-24 months, and what critical measures has SC Private Bank taken to navigate these waters?
Ali Hammad: The impact of COVID-19 on the realm of private wealth is sizable, specifically when accounting for the extreme volatility felt across various markets and the subsequent urge to ensure sufficient liquidity during these unprecedented times. As such, the next 12-24 months will be critical as we begin to emerge from the immediate crisis and clients begin to regain their financial health. However, it would be premature to make any definite predictions so early on.
Concerning our support efforts, the Bank has taken extraordinary measures to mitigate the health, financial, societal, and economic implications of the COVID-19 pandemic. The Bank’s support is geared towards ensuring the wellbeing and stability of our clients, our employees, and the community as a whole.
Understandably, many clients are concerned about the impact of the coronavirus pandemic on their wealth, particularly with the volatility we have seen across financial markets globally during this period. It has been a worrying time for most and, for us, being available and keeping in regular contact with clients has been critical. The strength of our relationships and the trust built with our clients have come into their own. We’ve been able to minimise any disruption to our client service and continue to provide expert advice and reassurance and keep clients up-to-date as the crisis evolves.
Across the wider AME region, including in the UAE, we have enacted a three-month payment holiday on existing personal loans, car loans and mortgages, with zero fees. Also, all clients can choose to pay only the interest component of their loan for a period of three months. Concerning credit card purchases, we have provided our clients the ability to receive a 50 percent reduction on cash advance fees and a refund on any foreign currency transaction fees on cancelled travel bookings. The Bank has also afforded clients the ability to convert selected fees and purchases, including hospital, school, utility, and grocery fees, into equal monthly instalments at 0 percent interest and no processing fees.
What are some of the digital capabilities your firm is investing in, as a result of client demand?
Ali Hammad: The Bank has kept its finger on the pulse of the emerging technologies sector. We are continually exploring opportunities for further integrating the latest digital capabilities to our portfolio of products and services. Our digital-only banks in Africa are a great example of this, as they were a direct-result of our clients’ demand for convenient and accessible financial services in the markets.
Amid the COVID-19 pandemic, a bank’s ability to provide its clients with uninterrupted offerings via digital mediums was of the utmost importance. Fortunately, Standard Chartered was an early champion of digital banking and was well-positioned to provide clients with its full suite of services through its many technological offerings. A prime example of this is our real-time onboarding service, a first-of-its-kind in the UAE, wherein customers of Standard Chartered are able to sign up for an account in as little as 10 minutes through an entirely automated process.
However, looking ahead of the current crisis, digital adoption will certainly be a popular undertaking across the regional banking landscape, specifically surrounding contactless payments and mobile banking.
The young generation of today is exposed to technology in their lives more so than ever. This brings about a certain level of expectation. They anticipate leading-edge technology solutions to manage and access their finances ‘on the go’. It’s fairly usual for say, High Net Worth Individuals, to have multiple investment relationships across several platforms and advisors, and to require consolidation of information at the touch of a button. Technology has made access to information much easier. Therefore, the requirement for sophisticated advice will continue to grow to help attract the next generation.
Although the Bank is a substantial player in the digital banking field, we look to further invest in emerging technologies, such as AI and Big Data, to ensure our offerings conform to the utmost standard.
Not only that but additionally being at the forefront of the latest technology helps to attract up-coming young professionals. These employees are looking for employers that are more innovative in nature, which provides a deeper sense of purpose and offers flexibility.
Which private products and services is your organisation focusing on innovating as a priority over the next year?
Ali Hammad: Across our various private services, including wealth solutions, legacy planning, and sustainable investments, we look to integrate the latest technologies, digitise our offerings, and provide our clients with flexibility that doesn’t compromise on efficiency.
However, as we slowly emerge from the current crisis, we are prioritising existing relationships with our private clients and ensuring that they are serviced and supported to the utmost standard. As I’ve previously mentioned, the Bank continues to heavily invest in the latest technologies, yet we’re also equally as invested in retaining the ‘human’ element of banking. Integrating top-of-the-line digital capabilities with elite customer service serves as the basis of our client-driven philosophy, ensuring that our clients are catered to the highest degree.
Customer satisfaction remains key to the success of our business and we are committed to seeing our clients through these turbulent times, as well as safeguard their wealth and investments. For our entrepreneurial clients, we aim to place our focus on their financial and operational health, as the current challenges continue to implicate their businesses.
The Bank’s drive to remain innovative will continue onwards, however, the current climate calls for increased attention on our clients and their endeavours.