Taiwan has a plethora of affluent people, but some banks seem to have been ignoring them. There are over four million mass affluent individuals in Taiwan, and their assets have continued to increase by over 5% year-on-year.

 

Facing rapidly increasing property prices in the island, and with the liberalization of the country’s financial markets, Taiwanese affluent individuals are seeking banks that are able to help them allocate their resources strategically and help them become high-net-worth individuals (HNWIs). These individuals, who are working professionals, government workers and owners of small businesses, have yet to accumulate a US$1 million worth of assets, but many of them are seeking the same specialized products and advisory services of their HNWIs counterparts.

 

Fubon Taipei Bank has strategically been restructuring its wealth management department to ensure that it is able to capture and service the rising wealthy class in Taiwan, as many other banks have been focusing on the richest peoples in the country. Eric Wu, the SEVP of Taipei Fubon Bank, believes that by lowering the threshold of the wealth their private banking clients must have to access the bank, and create specialized programs for them, he can capture the rising affluent class before they become truly HNWIs.

 

 

Wu says that the bank has relaxed its minimum assets requirement to attract more clients, which helped increase the bank’s overall assets under management (AUM).

 

“In 2014, we decided to the minimum asset threshold for private banking clients was lowered from US$1 million to US$500,000 at the beginning of 2014. A year later, Taipei Fubon Bank had 40% more clients with AUM of over US$500,000, and the total AUM for these high-wealth clients had grown by 20%, indicating that the strategy succeeded in getting more clients with considerable potential to concentrate their assets with us,” says Wu.

 

This has given the bank a distinct advantage in Taiwan’s fragmented and highly competitive wealth management sector, as many of its foreign competitors, including UBS and J.P. Morgan, have been focusing on ultra-high-net-worth individuals (UHNWIs), and as Citibank and other major domestic Taiwanese banks focus on individuals that have at least US$1 million.

 

Wu and his team have positioned Taipei Fubon Bank to capture the emerging wealthy class by lowering the threshold of the assets they must have to enter the private bank, thus securing a niche market in Taiwan’s wealth management industry. Let’s take a look at exactly what the bank has done to do this.

 

 

When Fubon Financial Holdings’ “Project One” strategy was launched in September 2005, Taipei Fubon Bank’s operations were reorganized into a “Business Group” that stressed the integration of professional expertise and the strengthening of synergies with Fubon’s affiliates. The bank’s personal finance division was split into wealth management and consumer finance arms, and over the next eight years the two businesses saw their revenue grow significantly. Wu says, “The model also helped build a rich pool of talent and a sound management system for the bank.”

 

In October 2013, Fubon Financial Holdings reverted back to a “Business Unit” organizational model to lay the groundwork for its next stage of development, and Taipei Fubon Bank reintegrated the wealth management and consumer finance businesses into a personal finance division. As part of the reorganization, Taipei Fubon Bank adjusted its wealth management business based on its existing foundation by further emphasizing a customer-centric approach, and developing a fully functional branch network with “one-stop shop” service.

 

Around the same time of reverting back to a “business unit”, with the help of the institutional banking team, Taipei Fubon Bank attracted new customer segments by more vigorously promoting consumer finance services, such as offering preferential personal loans to employees of corporate clients, and by helping us expand our customer base. The institutional banking team also helped Taipei Fubon Bank leverage its sizable list of corporate clients to create wealth management and private banking opportunities through referrals to the companies’ owners or top executives.

 

“Overall, through the integration of the wealth management and consumer finance businesses, and with close cooperation with the institutional banking team, Taipei Fubon Bank’s private banking division made more efficient use of its marketing, helping us expand our range of services offered to clients and strengthen the bonds with private banking clients,” says Wu.

 

Although some banks in Taiwan’s financial services sector have also merged their wealth management and consumer finance departments, Taipei Fubon Bank’s size and operations and resources outpace most of their rivals, and provide a major competitive advantage to their wealth management business.

 

According to Wu, another one of Taipei Fubon Bank’s wealth management initiatives was to establish a customer segment management department. Through data analysis and applications, the department identifies customers from different segments--such as electronic platform customers, SME clients and salary transfer customers—who have potential to one day enter the bank’s wealth management arm, and then devise targeted marketing campaigns that encourage them to invest while helping branches attract new wealth management clients.

 

Wu gives an example of how this works, “One example that comes to mind is that we have created different wealth management products have been built to appeal to clients who pay high taxes, to the children of wealth management clients, or to big-spending credit card holders. These programs have helped improve product penetration rates and expanded our customer base drastically.”

 

 

Wu said in 2015, Taipei Fubon Bank plans to broaden and expand the initiatives that were put in place in 2014 to serve different client segments.

 

The private banking business will continue to offer a strong array of financial products and continue to build a strong transactional platform in 2015. But even more importantly will be the development of a customized advisory service that tracks clients’ portfolios on a regular basis.

 

To achieve this, Taipei Fubon Bank is updating and optimizing its wealth management systems in 2015, and it expects to provide a “single-view advisory service” to customers through online or mobile banking channels by 2016. According to Wu, “The digital platform will be used to provide even more complete and interactive wealth management services, including portfolio health checks, stop-loss/stop-limit notifications, insurance health checks, and real-time updates of market information.”

 

Another major initiative in Taipei Fubon Bank’s wealth management department is developing its big data applications to learn more about its clients and help their relationship managers make better decisions.

 

Wu adds, “We are currently working with an outside consultant and a systems solution provider on a project to create advanced analytics technology and develop sophisticated database marketing capabilities. These efforts will help financial advisors more effectively manage different client segments and enhance the customer experience and customer satisfaction.”

 

In terms of cultivating talent, a major challenge for many banks in Taiwan, Taipei Fubon Bank’s performance evaluation system encourages talented financial consultants to strengthen their professional skills and competitiveness, and earn promotions to the position of “Private Bank Financial Advisor”. Furthermore, following the reintegration of the wealth management and consumer finance businesses, consumer finance training has been strengthened to broaden the expertise of the bank’s financial consultants.

 

Another of the bank’s core priorities is to elevate the quality of service to its affluent clients. After three years of planning, Taipei Fubon Bank will formally begin renovating its branches in 2015, and every branch will have space dedicated exclusively to private banking services. These areas will provide high-wealth clients with the most comfortable of environments in which to discuss and manage their portfolio and give them access to a new generation of digital services and tools that provide convenient, real-time financial services.