Asian banks continued to flex their muscles and use their local acumen. Philanthropic endeavours grew and passion investments, from fine art to watches, won more share of investors’ cash. Banks deepened the fight to retain relevance with the coming generations. Needless to say, regulations became tighter and even more ubiquitous. The task of hiring accomplished private bankers was as challenging as ever.

Overall, wealth is still being created in the region at a robust pace with China moving into the top economic slot and Asia continuing to be a major driver of global growth, although the US is doing its best to regain its old mantle. Certainly, China’s growth figures are slowing with some estimates for 2015 coming in below 7 per cent but the direction of policy from central government will likely see a higher quality of growth. And such growth is more likely to endure.

Technological advances and enhancements - all those “disruptive” innovations - are closing in from all sides on wealth management. Traditional banking methods are under huge pressure from technology and 2014 was the year it started to bite. We began to hear about the rise of the “robo advisor”. The use of mobile devices continues. The rise of alternative lending and funding models is notable and raising the threat of cutting banks out of the conversation, at least in some ways. Banks are seeking to repel this threat: big firms such as UBS are embracing the challenge if not head-on then doing so by their own in-house pitches to entrepreneurs and startups. (See here.)  

Singapore
In 2015, Singapore as an independent jurisdiction turns 50 years’ old and Singaporean banks have been quick to embrace “Fintech”. DBS in 2014 appointed a chief innovation officer and pushed out a flurry of Apps, garnering industry praise in the process. Moreover, its large financial commitment and its chief executive’s enthusiastic support in bringing cognitive computing into the wealth management sector has garnered serious attention. Going digital has no terrors for DBS. (See here.) The bank has a partnership with IBM to use Watson technology or cognitive computing to bring artificial intelligence into the field of wealth management. Watson is a cloud-based technology that can process enormous amounts of information with the ability to understand and learn from each interaction, allowing the bank to analyse, understand and respond to vast amounts of data. Plugging all this in to relationship managers will take time - but it is happening. DBS’s rivals will not want to let it steal a march.

As briefly mentioned earlier, reports show that the numbers of ultra HNW individuals continue to rise, and are splashing the cash on items such as diamonds, fine art and real estate trophy assets. Some of the more ostentatious spending may have been blunted by China’s anti-corruption drive, but 2015 should see the region remain a hunting ground for sellers of luxury products and services. Auction house results continue to confirm the pattern: a few days ago, a China-based media mogul shelled out $61.8 million for a Vincent van Gogh picture, Still Life, Vase With Daisies and Poppies.

Another trend is that while still in its infancy, there is a growing focus on potential for family office expansion in the region. Asia has also been attracting family offices from the US and Europe who see more opportunities in the region than in their own backyards. Northern European UHNW families have been steadily establishing links with their Asian counterparts as if to emphasise the strong gravitational shift of wealth towards the East. Expect to read more about family offices being set up in the next 12 months.  

Merry-go-rounds
It has been a busy time for we reporters on the wealth management scene, and this publication, we are proud to boast, had scoops on some high-level moves during 2014, such as the move of seasoned banker YN Nagendra, who left Bank of Singapore to bulk up the Bank J Safra Sarasin offering. He is gradually rebuilding his team in the new surroundings. Renato de Guzman, or “Bing”, having successfully integrated, developed and solidly established Bank of Singapore from the Asian ING Private Bank acquisition by OCBC, steps down in 2015. We certainly aim to be first with reporting the key hires in the sector in 2015.

In North Asia ABN AMRO, ANZ, Julius Baer and UBS all made senior hires in their Hong Kong offices. Also now based in Hong Kong is Michael Benz, who was appointed as the group head of private banking for Standard Chartered in February. We interviewed him this year. (See here.)

Merger and acquisition activity was a fertile area in the Asian region this year. One of the most widely-discussed events was when DBS acquired the Asian business of Societe Generale Private Banking in March. This exit by SocGen suggested that making a success of private banking in Asia is not a foregone conclusion for Western firms. Separately, BTG Pactual acquired the Asian offices of BSI Bank from Italy’s Generali. In Hong Kong, EFG took over the business of Falcon Private Bank. The sale of Coutts International, the non-UK part of Coutts that is owned by Royal Bank of Scotland, is imminent.  

Compliance
The regulatory/compliance juggernaut rolls on. Many regulators in the region have promised the US to comply with the Foreign Account Tax Compliance Act. Singapore and the US signed a FATCA Model 1 'intergovernmental agreement' in December, which is bound to place an additional burden on compliance officers at private banks as the Lion City is the only jurisdiction in the area to have outlawed foreign tax evasion, making it a predicate crime for money-laundering offences.

In August, regulators of Singapore, Malaysia and Thailand finally brought their rules for the cross-border offering of collective investment schemes into operation. A set of common standards applies and the three states have clubbed together to write a “handbook” to help fund managers comply. It is up to the home regulator to assess whether a collective investment scheme is suitable to be an “ASEAN CIS”. There must be an undertaking to submit to the non-exclusive jurisdiction of the host jurisdiction’s courts.

Regulators in Asia are still making up their minds about the usefulness and legitimacy of Bitcoin, the electronic peer-to-per currency, although there have been some harsh pronouncements against it. China and Vietnam have banned Bitcoin and the Japanese finance minister has called for a globally agreed policy to close all potential loopholes through which non-government-sponsored criminals might benefit. In July, the Financial Action Task Force, the world's anti-money-laundering standard-setter, praised Bitcoin as the way of the future and made it evident that it believes in its durability. It desired to standardise the terminology surrounding Bitcoin affairs, the better to regulate on a global scale later.

In August, the Monetary Authority of Singapore decided to stop issuing S$10,000 ($8,000) notes as an AML measure. Earlier in the year the Labuan Financial Services Authority ended the “period of grace” for observing its new money-laundering and terrorist finance guidelines, giving effect to the FATF’s revised “recommendations” that date from February 2012 and which require Labuan’s financial reporting institutions to take a risk-based approach to identifying, assessing and understanding their “money-laundering risks” for the first time.

A final thought: 2015 in Chinese astrology is the year of the Ram or Sheep. Will the flock be guided by a generous shepherd or will they be lambs to the slaughter?