“Although the West may have driven many of banking’s evolutions, its future is in Asia,” says Philip Kunz, Head of Global Private Banking for South Asia at HSBC. Kunz’s career in finance spans 20 years in Asia, and he has witnessed first-hand the remarkable transformation of the region’s banking sector.
Backing Kunz’s two decades in the region are roots that stretch even deeper. In March 1865, HSBC opened its doors for business in Hong Kong, helping to finance trade between Europe and Asia.
“HSBC was born from one simple idea—a local bank serving international needs. Since then, we have always been focused on helping our clients around the world capture opportunities. Our purpose remains true to this day, even in a new era moulded by digitisation, Environmental, Social and Governance [ESG] adaptation, shifting trade and supply chains, and rising wealth,” Kunz asserts.
Look No Further Than Home
According to McKinsey & Company’s Asia-Pacific Banking Review 2019, personal financial assets in Asia-Pacific will total US$69 trillion by 2025. “This represents three quarters of the global total,” Kunz says, adding that “two thirds of Asian households will move into the middle-income brackets over the coming decade.”
HSBC is poised to capture this new wealth to become Asia’s leading wealth manager. “To capture the opportunities across Asia, we’re adding more than 5,000 people to our retail and private banking front lines over the next three years,” Kunz reveals. “We’re also improving our digital capabilities and platform, and developing new wealth solutions, particularly for high-net-worth and ultra-high-net-worth clients.”
“HSBC was born from one simple idea—a local bank serving international needs. Since then, we have always been focused on helping our clients around the world capture opportunities.”
Growing an Intergenerational Nest Egg
With the increase in wealth in the region comes an increase in the number of family offices. “We’re seeing greater interest from Asian clients, who are turning to family offices to ensure a smooth transfer of wealth,” confirms Kunz. “The task of creating meaningful legacies for affluent families is becoming more complex and challenging.
To meet this demand, HSBC set up the new Institutional Family Office in Hong Kong and Singapore last year. The service allows single-family-office clients access to the bank’s investment banking specialists and solutions, on top of private banking benefits.
“We believe that the enhanced coverage will better serve the growing needs and levels of sophistication of family offices, especially with the increased demand for sustainable investment solutions,” Kunz says.
There is indeed a generational change in investment attitudes, and proper management of a family’s legacy cannot be achieved without bridging the gap between one generation and the next.
“The new and rising generation of wealth owners are increasingly driven to influence the world and exert a positive social impact,” Kunz shares. “Our goal is to give this unique group of individuals the support they need to plan strategically for the wealth and businesses they will come to manage or influence.”
Putting Money Where It Matters
Sustainability has become a hot button topic that permeates every aspect of society today. “When people think about going green, they probably don’t immediately think that it has anything to do with the way they bank,” Kunz admits.
In 2020, research by Ernst & Young found that 52% of banks view environmental and climate change matters as a key emerging risk over the next five years. This shift in mindset is one that reflects demand on the investor side, too.
Likewise, going green has become a strategic priority at HSBC. The bank has released ambitious plans to transform its operations and supply chain to net zero by 2030, and to do the same for financed emissions in the portfolios of its clients by 2050 or earlier, in line with goals set out in the Paris Agreement.
It’s a transition that will involve an investment of between US$750 billion and US$1 trillion over the next 10 years. Financing of coal-fired power and thermal coal mining will also be phased out by 2030 in markets under the European Union and Organisation for Economic Co-operation and Development (OECD), and in other markets by 2040.
“Climate change is a serious concern, especially in Southeast Asia,” says Kunz. HSBC research has shown that out of the 20 cities most vulnerable to rising sea levels globally, 15 are in Asia, of which five are in ASEAN. “This is alarming,” he notes, “because cities are where populations and resources are concentrated. If left unmitigated, climate change can threaten to wipe out decades of hard-won economic growth in Southeast Asia.”
HSBC is taking the initiative to lead the transition to a global net zero economy, not just by financing it, but by helping to shape and influence the global policy agenda.
Among the many regional initiatives it has a hand in are Green Deposits, a programme it launched that puts investor dollars into environmentally beneficial projects and businesses; Indonesia’s Green Sukuk, sharia-compliant bonds that finance climate change mitigation; and a partnership with Temasek in Singapore to catalyse sustainable infrastructure projects, with an initial focus on Southeast Asia.
“A bank like ours has a huge responsibility to lead on climate change—not just for our shareholders, but more importantly for our clients, colleagues and the communities we have been operating in for over 155 years.”
For the Greater Good
Green investing isn’t the only way wealth can be mobilised for good. For clients with more varied philanthropic interests, HSBC Global Private Banking has been helping wealthy individuals and families with their pursuit of important social causes for more than 65 years.
“We believe one’s philanthropy plans and charitable structures belong at the heart of the overall wealth management strategy. In turn, we’ve helped the growth of a thriving philanthropic society.”
Simply put, it is much like an end-to-end solution for investors who wish to do good but are not quite sure how—from helping the client find a focus and drawing out a strategy to running a charitable trust and reviewing outcomes, and the provision of dedicated specialists who will provide guidance, based on sound philanthropic practices, every step of the way.
“A strategic approach, with researched, planned and directed activities built around the issues that the client supports,” says Kunz, “is likely to achieve significantly more for the causes they care about.”
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