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Tapping Asia Pacific regulatory opportunities with private banking

In Asia Pacific’s booming private wealth market, regulatory management is key to growth.

Overview

The large, rapidly growing private wealth market in Asia Pacific presents opportunities for wealth management businesses to grow, both organically and inorganically—as financial providers navigate the region's highly regulated environment.

But regulatory hurdles, some resulting in hefty fines, should be managed proactively if the banking sector is to thrive. Some banks are beginning to understand and undertake the necessary steps to address this challenge. For these banks, actively managing the regulations and compliance requirements of this dynamic region will position them to service the needs of the fastest growing private wealth market.

 

DOWNLOAD PRIVATE BANKING IN ASIA PACIFIC - TURING REGULATORY CHALLENGES INTO OPPORTUNITIES [PDF]

Background

The private wealth market in Asia Pacific has grown rapidly for the past several years. This growth is bolstered by an increase in high net worth individuals (HNWI), a population expected to grow and surpass all other regions around the globe this year.

But the Asian regulatory landscape drives increased pressures and costs as the banking sector works to remain compliant.

Regulations in Asia cover three key areas: tax and regulatory compliance, financial crime prevention and market conduct. Initiatives in each of these areas have an impact on the business, operations and technology in the private banking sector.

Key findings

New and evolving regulatory requirements pose multiple challenges for the banking sector. Among the new concerns:

  • Fragmented or siloed Know Your Customer (KYC) technology leads to duplicated effort and inefficiency.

  • KYC practices diverge widely across the industry, bringing another layer of complexity.

  • To address Common Reporting Standards (CRS) requirements, existing compliance engines may need to be enhanced.

  • Under the CRS regime, customers with multiple tax residencies will need to be identified using information other than what is available in the bank’s database.

  • Legacy system integration issues create barriers to automation checks.

  • Standardized requirements across jurisdictions for HNW clients who are managed across different countries are lacking.

The rapid growth of the Asia Pacific HNW market presents important opportunities to the private banking sector. This new wave of regulatory initiatives would also impact the private banking sector’s business, operations and technology areas. In our view, banks offering a full range of differentiated private banking services should support these with a strong compliance framework. In a heavily regulated environment, this can be essential for success.


DOWNLOAD PRIVATE BANKING IN ASIA PACIFIC - TURING REGULATORY CHALLENGES INTO OPPORTUNITIES [PDF]


Authors

Amit Gupta, managing director – Accenture Finance & Risk Services, Singapore

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Kevin Shum, manager – Accenture Finance & Risk Services, Singapore

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