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Pricing and monetisation in private banking: New trends in revenue management | hubbis

Hubbis and co-host Simon-Kucher & Partners assembled a group of wealth management experts in a private discussion to analyse the latest trends and anticipate future developments. The premise for the discussion was that the approach to pricing, monetisation and discounts in the wealth management sector in Asia need addressing in a more professional manner, for sustainable growth and superior service. As the business model migrates ever more towards advisory, rather than the former transactional model, this is ever more important for transparency, business planning and customer satisfaction.

But the transition to advisory revenues in Asia is not an easy one. The struggle around pricing in the wealth management sector in Asia is the continuing focus on transactional revenue as opposed to recurring revenue, which is proving more elusive than many had expected.

However, as Asian clients move onto their second and third generations of wealth management firms hope they might gradually be able to start charging the same fees as Swiss Banks.

The template for the future is in Europe, where there have been great strides forward, especially in that bastion of private banking, Switzerland. Two decades ago banks there knew little or nothing about pricing technology and strategy; today, private banks and other wealth management firms focus considerable effort on pricing structure and transparency within their organisation, as they know how vital it is for revenues and also for customer retention. In fact, pricing transparency has become a key selling point for many of the leading institutions.

Transparency in the Asia region will be ever more essential, partly due to the demands of regulatory reform and inspections. The wealth management industry in Asia has remained too opaque for too long, but with increasing disclosure required for clients and compliance, it is gradually becoming an internal priority for all the players in this industry that they focus on and willingly embrace transparency.

A more level playing field is the hope and expectation for the future, as private banks in the region are under pressure to clarify fees at the earliest stage possible and to justify discounting internally and externally. Firms that focus on professionalising their pricing strategies and structures will be better placed to prosper in the future.

Competition will only intensify and accordingly the drive towards monetisation and value pricing will also become more crucial, with innovations and smart pricing strategies central to protecting and predicting margins in the future.

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Asian Wealth Management and Asian Private Banking – Pricing and monetisation in private banking: New trends in revenue management.