Wealth Management and Private Banking

Cross-border wealth management and private banking players will need to adapt to a new competitive landscape, as the industry has entered an unprecedented era of transparency. Growing scrutiny from tax authorities—at a global level—has been at the origin of a significant client re-domiciliation trend which, in turn, has urged Wealth Management firms and Private Banks, notably from international wealth management centres, to follow their clients to their home countries.

In parallel, a series of substantial evolutions in the cross-border environment has rocked the industry to its foundations. Indeed, political tension has been intensifying in some regions of the world and new client types, of a more global and mobile nature, have emerged. These phenomena have led to a rise in asset volumes in cross-border markets. On top of that, in a context of fierce domestic competition, onshore players are looking for new customers in foreign markets.

Simultaneously, the industry has witnessed a regulatory avalanche over the last few years. Many new restrictions have been implemented, ranging from the marketing of products and services, to customer protection, distance selling, and financial advice. Furthermore, the fast-changing fiscal environment continues to redesign the cross-border wealth management and private banking market. This translates into additional costs and investments for the players.

Many wealth managers and private banks foresee that the future of cross-border markets will be subject to further regulatory and fiscal developments. The players will need to demonstrate their ability to comply with such developments and to adapt their business strategies accordingly. In our view, there remains much to be done. Our analysis shows existing challenges revolving around the value proposition delivered to cross-border clients, and more importantly, how this value can be delivered, through a combination of multi-channel interaction, appropriate product and service offerings, at a fair price, and supported by optimal operating and organizational models.

We believe that these considerations will shape the industry for years to come. For this purpose, we have collected data from executives of over 75 institutions through an online questionnaire. In addition, we have conducted extensive interviews with recognized professionals from the industry and combined their input with our own consulting expertise, developed through a broad range of assignments across the wealth management and private banking industry around the world.