Global banks with Asian offices are seizing the opportunity to manage both their clients’ businesses and the family wealth – and establish a relationship with them early on. As fees from selling products remain depressed and investment revenues continue to wobble, it is a way for the bank to profit from existing clients by recommending them to another part of the firm.

“All the banks in Asia are trying to increase the relationship between the corporate and private bank,” said Chris Wheeler, an analyst with Mediobanca.

“Banks are doing it everywhere but Asia has the ideal combination of a young high net worth community, many of which haven’t established relationships with wealth managers, and a high proportion of entrepreneurs who have a clear need for corporate advice,” added Wheeler.

Shayne Nelson, chief executive ofStandard Chartered Private Bank, told WealthBriefingAsia in an interview last week that cross referrals between different parts of the bank was one of its biggest growth areas. He said last year 17 per cent of new private banking clients came from internal referrals of existing corporate clients. Already referrals this year are on track to overtake last year’s total.

“Collaborations between the private bank and Wholesale Banking, and SME Banking have been very strong. Particularly in Asia where 63 per cent of high net worth individuals have their own businesses, this is an area of increasing focus for us,” Nelson toldWealthBriefingAsia on a conference call.

In April the StanChart launched the High Value Client Coverage business, which brings together its private banking, priority banking, Small Medium Enterprise banking, international banking, and Islamic banking client offerings.

He said the rationale to form the group lay in the growth of SMEs, the growth of local corporates in wholesale, and the massive wealth creation in the region.

“We have long term multi generational relationships with our clients. We needed to cross-sell across our own strengths. We already had the relationships but before we didn’t meet all their requirements. For us it was easier to gain market share from clients we already have than go cold calling and looking for new clients,” he added.

Other banks are focusing on cross-referring too. Earlier this year Citi became one of the first global banking groups to appoint a head to oversee cross-selling between its investment bank and its private bank in Asia. Ted Teo was appointed a managing director in the Business Development Group in the region, focused on facilitating cross-selling between Global Banking and Citi Private Bank. 

His job is to refer private bank clients seeking investment banking solutions to Global Banking and introduce Global Banking clients to the private bank for wealth management solutions. As part of his cross-selling role, he encourages wealth management clients to make use of Citi’s equity and debt capital market trading expertise.

Of course, staff need an incentive to recommend staff to their colleagues. Increasingly banks are rewarding employees who recommend clients to another division.

Last month, UBS followed its rival Credit Suisse be extending a financial incentive to all staff who successfully cross-refer from one part of the bank to another, with a scheme called the Group Referral Incentive Program.

Other banks, including Deutsche Bank, HSBC, JP Morgan, RBC and Barclays, have been looking at implementing similar schemes. StanChart says it does reward staff who cross-refer as part of their annual bonus. 

But the model has its drawbacks too. With everything under one roof, clients are more at risk should a calamity occur.

Yogesh Dewan, a former private banker who now runs multi-family office Hassium, believes there are risks involved to one-stop banking. He believes there is no guarantee of Chinese walls between departments at banks, which could result in information leaks.