“Banks still have to find a niche and stand out to win clients”
The Grid: Do you think wealthy families have aligned their mindset to the new status quo globally i.e. the inevitable shift towards more disclosure of information?
Pankaj Narain: The sense is that it is all too early at this stage for everybody to take in the entire impact of what’s going to come. At Hinduja Bank we have started speaking with clients on this subject. CRS will impact pretty much everybody with a bank account.
Have clients understood the whole piece? Perhaps not. My sense is that clients require an education process to get there. Our relationship managers are explaining to them why this is happening. All stakeholders have an important role to play, including the Regulators.
The Grid: How is the advent of the CRS beneficial to clients? Does the industry have their buy-in?
Pankaj Narain: Transparency is key and this process will bring about transparency across all stakeholders. The process of opening a bank account will be clear to both the Bank and the client. Moreover, since there are a fair amount of cross border transfers that happen, the more information the bank has, the more likely client transactions will be settled quickly and efficiently in future. Communicating this to clients will give them comfort.
The Grid: Are clients from certain geographies finding it easier to adapt?
Pankaj Narain: Singapore banks have discussed this in an open forum, much like we at Hinduja bank have . Some large domestic banks in the UAE have also started the process.
The Grid: As you mentioned, the Bank is proactively seeking information updates from its private clients to improve the CRS implementation process. What other steps are you considering?
Pankaj Narain: Outreach is important. This is why we took the initiative to educate the market through our Global Sophistication: Information Sharing and the New Common Reporting Standard event we held recently at the Capital Club, DIFC. Other means of informing our own clients through customized individual support via one-on-one meetings will also help.
Hinduja Bank event on CRS in collaboration with Deloitte Private and Crowe Horwath at Capital Club, DIFC
The Grid: How is Hinduja Bank preparing in terms of infrastructure and systems?
Pankaj Narain: At the back end, we have to ensure the following:
- Documentation is re-designed to capture the required information
- Staff is trained to field questions that are relevant and recorded in a proper way
- Technology upgrades may become necessary to manage the data
- Robust data warehousing and security within the organization as transfer of data to the Central Bank and regulatory authorities in the end will be of utmost importance
A lot of work, I can see!
We went through something similar when FATCA took place in 2010 and that entailed a lot of work for all industry stakeholders. Lessons were learnt and perhaps as a result the CRS implementation should not be as tedious.
The Grid: Would you say that the advent of the CRS puts fully-licensed offshore banks on par with onshore banks then? Are you expecting more interest from domestic clients, as a result?
Pankaj Narain: I think the issue here is not just about the new reporting standard across banks onshore or offshore. Banks still have to find a niche and stand out to win clients.
On the other hand, there are customers who have diverse requirements better satisfied by different banks. A HNWI, for example, will have a need for an offshore bank as much as they will for a regular transactional bank for day-to-day needs. I think the banks offshore have their own place to work with customers.
The Grid: What would that niche be for Hinduja Bank?
Pankaj Narain: We are boutique and family owned and very different from large multinational banks with whom we co-exist. Does a customer want a small boutique or large international bank? This ties back to each individual’s diverse needs. We have a more personal relationship with our clients. We can devote more time per account and decision-making is quicker. While large banks may provide proprietary research and products, their smaller peers outsource these. I see that as an advantage. We can pick and choose our providers by asset class performance, while larger banks must showcase their own.
Also, given that Hinduja Bank has an Indian heritage and is family owned, we have an affinity with that particular set of customers and we understand their requirements better perhaps than others in the marketplace. Our wealth management practice began as a natural extension some years ago in Switzerland on the back of our success in industry (oil, manufacturing, telecom, healthcare and banking). Group companies like Ashok Leyland, PD Hinduja Hospital, IndusInd Bank and Gulf Oil are well known amongst our client base.
Our Dubai presence, now eight years in, became a natural link through the Swiss – Indian connection. Given our direct connectivity with investment opportunities in India through our brokerage arm in India, we can offer that to our clients in Dubai too.
This is an extract from an interview with Pankaj Narain, Chief Executive Officer, Hinduja Bank (Middle East) Ltd
Hinduja Bank Middle East Ltd (HBME) is member of the Hinduja Group and a Category 1 licensed Bank in the DIFC. HBME is authorised and regulated by the DFSA. It offers a full suite of Private Banking and Wealth Management solutions to its niche clientele and, amongst others, is authorised to accept deposits, trade in International Bonds and Stocks covering major markets, provide loan facilities against the investments and arrange custody of assets.
Interview byTasneem Mayet, Research Director, The Grid Media Ltd
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