World Wealth Management Trends & The Vietnam Market

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Addressing World Wealth Management Trends & The Vie tnam Market

Lance TaySenior Director, Financial Services Global Business Unit

Ho Chi Minh City, Vietnam14 October 2010

2VN Wealth Mgt Press Conf-101014-LTay-v03

Buổi gặp mặt báo chí

Giới thiệu xu hướng

”Quản lý tài sản” trên thế giới

và Việt Nam


The preceding is intended to outline our general product direction. It is intended for information purposes only, and may not be incorporated into any contract. It is not a commitment to deliver any material, code, or functionality, and should not be relied upon in making purchasing decisions.The development, release, and timing of any features or functionality described for Oracle’s products remains at the sole discretion of Oracle.

© 2010 Oracle Corporation – Proprietary and Confidential


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Program Agenda

• Facts & Indicators – Global & Vietnam

• Emerging Trends & Challenges

• Value Drivers for Wealth Management Firms (Private Banks, Retail Banks, Insurance Firms, Wealth Managers)

• Oracle Solutions

• Selected Customer Accolades



Facts & Indicators


Macro Economic Facts – Wealth ReboundHNWI Population, 2006-2009 *

In Million (CAGR 2006-2008 = -5.0%)

HNWI Wealth Distribution, 2006-2009 *

In USD Trillion (CAGR 2006-2008 = -6.2%)

Key Indicators:• Global HNWI population grew 17.1% in 2009 while wealth raised 18.9% to US$39 Trillion

• North America - HNWI population grew 16.6% and wealth jumped 17.8% • Europe – HNWI population rose to 12.5% after dropping 14.4% in 2008• Asia-Pacific – HNWI population rose 25.8% and wealth surged 30.9%• Latin America – HNWI population grew 8.3%, while wealth jumped 15%• Middle East – HNWI population and wealth grew by 7.1% and 5.1% respectively

“Global HNWI recovery was generally stronger in eme rging and developing nations than in mature ones”


* Source: World Wealth Report 2010, Figure 1. Capgemini-Merrill Lynch Global Wealth Management


.10.10

.10

.109.5 10.1 8.6 10.0 37.2 40.7 32.8 39.0

0.9

1.0

0.8

1.0


Vietnam Perspective – Top 3 Fastest Growing Rich

* Source: Vietnaminvestment.net, VietNamNet Bridge, Vietnam Business News


Local & Foreign Inst. Rush To Capture Segment

* Source: Nielsen VN_PFMPresentation 2010, Vietnam Business News, IBU Analysis

VN Segment est = 1% of 88m pop. = 900k

SG segment est = 5% of 5m pop. = 250k


Top Differentiating Factors *

Global Trends – Post Crisis: Gain Customers’ Trust


Emerging Business Model *

* Source: PricewaterhouseCoopers Global Private Banking & Wealth Management Survey 2009

Key Trends:• Customer Centric Advisory Model –(Proprietary & Third Party products)

• Comprehensive Financial Planning• Customized Portfolio Modeling• Aggregated Reporting• Commission to Fee based revenue

• Combination of Producer & Distributor led models

• To protect profitability against reducing commission based revenues

Key Trends:

• Client Acquisition & Retention is the top priority of Wealth Management firms

• Qualified CRMs• High Quality & Trusted advices• Tailored Services for customer segments • Due diligence• Pricing and performance is not a primary differentiator


Global Trends – Technology Perspective


Key Operational Strategies *

Key Trends:

• 66% of COOs plan to offer aggregated client reporting in next two years (consolidated statements)

• Online Client Platforms is a top five operational priority over the next two years

• Information Security, Client Data Protection and Privacy are critical legal and reputational priorities

• 63% of COOs expect to increase their IT spend in the next two years

• 82% of COOs will undertake major core system upgrade, including 36% introduce enterprise wide solutions for their organizations

• Majority of COOs expect to increase the use of regional and global hubs

* Source: PricewaterhouseCoopers Global Private Banking & Wealth Management Survey 2009


Emerging Trends & Challenges


Emerging Business Approach * - VN FSIs needs to decide


Marketing/Sales/

Advice

Product/Portfolio

Management

Operations/

Infrastructure

• Disintegration of Value chain by segments (eg OCBC)

• Focus on Scale in Lower Segments

• Specialization in Upper segments

• Niche Players (eg J.Bear)

• Focus on upper segments and advice backed sales

• Emphasize on product platform; No Commission and No Product push

• Large, Integrated Players (eg HSBC)

• Team-based sales & service

• Increased Cross-selling & cost synergies

• Separate Branding (Upper segments) to increase credibility

Approaches

UHNWIUHNWI

HNWIHNWI

AffluentAffluent

SegmentsSegments

Value Chain

Standardization

Cus

tom

izat

ion

Specialization Strategies

Standardization Strategies

Depends on Segment &

Focus of Player

* Source: Booz & Company

“Balancing revenue with cost to serve is driving Specialization and Standardization Strategies”


Evolving Advisory Process * - Customer Centric, Granular


Traditional Advisory Process Target Advisory Process

• Simple Checklist-based Client-need analysis process

• In depth view of Short & Long term goals and expectations was not captured

• Simple Checklist-based Client-need analysis process

• In depth view of Short & Long term goals and expectations was not captured

• Moving beyond simple Investment Portfolio Strategy

• Ongoing review and refinement of client needs and objectives, integrating emotional factors into process

• Moving beyond simple Investment Portfolio Strategy

• Ongoing review and refinement of client needs and objectives, integrating emotional factors into process

• Client’s risk profile was calculated as per the existing risk models, e.g., conservative, risk-averse

• Client’s risk profile was calculated as per the existing risk models, e.g., conservative, risk-averse

• Portfolio Scenario Analysis

• Simulation of hypothetical/actual historical events to see effect on portfolio

• Portfolio Scenario Analysis

• Simulation of hypothetical/actual historical events to see effect on portfolio

• General risk tolerance was the primary driver for target asset allocation

• General risk tolerance was the primary driver for target asset allocation

• Multi-Model Asset Allocation for addressing various types of risks, and goal orientation

• Moving to more diversified and global allocations

• Multi-Model Asset Allocation for addressing various types of risks, and goal orientation

• Moving to more diversified and global allocations

• Products offered based on product risk and not the client risk

• Products being offered were selected before analysis of client needs

• Products offered based on product risk and not the client risk

• Products being offered were selected before analysis of client needs

• Products innovated toward client goals & demand

• Product disclosure: Transparent & Simple

• Products innovated toward client goals & demand

• Product disclosure: Transparent & Simple

• Correlation of asset classes was utilized for assessing risks and rebalancing portfolios

• Correlation of asset classes was utilized for assessing risks and rebalancing portfolios

• Multi Models across portfolios

• Continuous risk analysis & active rebalancing

• Clients engaged in revisiting and rebalancing their portfolios

• Multi Models across portfolios

• Continuous risk analysis & active rebalancing

• Clients engaged in revisiting and rebalancing their portfolios

• Providing clients with a complete view of their portfolios has been a challenge and was a customized service for higher-band client segment

• Providing clients with a complete view of their portfolios has been a challenge and was a customized service for higher-band client segment

• Risk-Adjusted reporting of Client portfolios

• Regular Portfolio Alerts

• Multi-Channel Integration

• Risk-Adjusted reporting of Client portfolios

• Regular Portfolio Alerts

• Multi-Channel Integration



Business Standpoint

• Trusted Advice

• Segmented Approach

• Customer Centric

• Periodic Review of Clients needs & Rebalancing

• Multi-model global allocation of assets

• Risk Analysis

Operations Standpoint

• KYC Compliance

• 360 Degree View of Customer Wealth

• End to End Aggregated Reporting

• Advisor – Friendly

• Process – Oriented

• Consistency & Scalability

• Client Data Protection & Privacy

CHALLENGES

Business Standpoint

• Comprehensive Financial Planning

• Parameterizeable Service Differentiation

• Online client access

• Deviation & Multi Dimensional Exposure Tracking

• Automatic Portfolio Rebalancing

• Risk Adjusted Reporting

Operations Standpoint

• Proven Integration to document management system, Product Processors and Reporting Systems

• Open Architecture

• User Friendly

• Scalability

• LDAP & database authentication

• 360 Degree view of Customer Wealth

• Transparent Client Servicing

• Tailored Services to specific segments

• Increased Advisor Productivity & Cross Sales Opportunity

• High client touch

• Lower time to market

• Quick Usage Ram-up & Faster Customer Service

• Increased operational control

• Reduced Total Cost of Ownership (TCO)

• Lower cost of future upgrade

• Re-use of existing IT assets

• Quick & Easy Deployment

• Future proof technology

Oracle Differentiator

CAPABILITIES VALUE

Challenges – Capabilities – Value Proposition


Key - VN priority


Oracle Solutions



Integration with World Class CRM

Financial Advisor Desktop

ORACLE CRM Wealth Management

ORACLE FLEXCUBE Private Banking

Contact Household

Financial Plan

Financial Product

Financial Account

Financial Holdings

Portfolio Planning & Construction

Portfolio ReportingPortfolio Analysis & Monitoring

Portfolio Execution Portfolio Administration

Portfolio Simulation

ORACLE Application Integration Architecture


Functional Architecture – Plug & Play


EX

TE

RN

AL S

YS

TE

MS

Oracle FLEXCUBE Private Banking

Financial

Planning Order

OriginationPortfolio

Management

Oracle or 3 rd Party Core Banking

Current & Savings Accounts

Structured Deposits Lending

Foreign Exchange Local PaymentsCross Border Funds TransferSWAPS & FRA’s

Standing Instruction Teller Services

Relationship

PricingElectronic Messaging

NostroReconciliation

Securities (Equities &

Bonds)

CIF Security – Access Mgmt Limits MIS General Ledger

Oracle Business Intelligence Enterprise Edition

Standard Reports OBIEE Reports

360

Deg

ree

Wea

lth

Man

agem

ent

Com

preh

ensi

ve P

rodu

ct

Pro

cess

or

End

to E

ndR

epor

ting

Risk & Compliance

Customer Relationsh

ip Mgmt

Product Catalog, Core Maintenances, Reconciliation s

Revenue Mgmt

Biz Perf. Mgmt

Term Deposits Money Market

Broker

Bloomberg

Custodian

SWIFT

MarketData

Oracle Universal Content Manager

Scanned Customer Documentation & Correspondence – St orage & Retrieval

Doc

umen

t M

anag

emen

t



Integrated Process Architecture Customer


Customer Accolades


“We are using Oracle FLEXCUBE Private Banking because it enables us to provide innovative products and services to our customers in a cost effective manner.”William Purdy, Head of IT, Bank of London and the Middle East

What Bank of London and the Middle East Is Saying



“…gives us the opportunity to address high net worth individuals comprehensively and provides us with a competitive edge. The implementation is in line with Kotak Mahindra Bank's commitment to offer quality service to customer needs.”KVS Manian, Group Head Retail Liabilities and Branch Banking, KotakMahindra Bank

What Kotak Mahindra Bank Is Saying




Lance TaySenior Director, Financial Services Global Business Unit [email protected]

• Lance Tay is the Senior Director for Banking across Asia Pacific in Oracle’s Financial Services Global Business Unit (FSGBU).

• In this role, Lance is responsible for providing de ep domain expertise to Oracle’s financial services customers across all of Oracle’s applications and technology products. Lance brings to this role a wealth of exp erience and valuable insight gained through over fifteen years of experience wor king with some of the region’s largest financial services companies. His domain ex pertise includes retail banking, wealth management, and trade finance. Lance has wor ked with major financial institutions in Australia, New Zealand, South East Asia, India, China, and S. Korea.

• Lance is considered a retail banking IT strategy th ought leader within the financial services sector and is a regular commentator in lea ding industry publications. He is often invited to speak at industry seminars about b reakthroughs in banking IT strategy.

• Prior to joining Oracle, Lance held management posi tions at The Boston Consulting Group, Accenture, and Cisco Systems. Lance also wo rked at Fidelity-NIS, and Procter & Gamble.

• Lance holds a MBA from Cornell University, and a Ba chelor of Science from the Southern University of New Hampshire. He has also lived in Sydney, Bangkok, Mumbai, and Geneva.



World Wealth Management Trends & The Vietnam Market

Business

hnwi wealth distribution

world wealth management

world wealth report

global hnwi population

vn fsis

nielsen vn

oracle corporation proprietary

europe hnwi population