Citigroup Challenges UBS in Asia

UBS is the biggest manager of assets belonging to private investors in Asia. The No. 2, Citigroup, wants to take the top spot from the Swiss bank and has changed its strategy to achieve this goal.

Switzerland's UBS has 274 billion francs in assets under management in Asia. Citi Private Bank, which had to cede the No. 1 position to UBS two years ago, has 255 billion.

All foreign banks in Hong Kong and Singapore are hunting the very rich clients, people with 30 million plus in their pockets. The reason is clear: Ultra High Net Worth Individuals (UHNWI) tend to yield excellent profits for their bankers.

Chase for the Affluent

Citigroup has now changed tack: As well as managing the wealth of the very rich, it has also started the chase for the «merely» affluent clients, people with relatively modest assets of 35,000 to 140,000 francs. The U.S. giant started the new offer in Hong Kong in August, now it has extended it to Singapore, as «Hubbis», a wealth management portal reported.

The new strategy by Citigroup is unusual for a foreign bank. Hitherto, these left the mass market business to the local institutes, concentrating instead on investment, corporate and private banking. The change in strategy looks viable because banking without high street branches has become possible with the technical solutions offered by the digital revolution.

Citi Priority - Automated Adviser Tool

Citigroup is pinning its hopes for a profitable management of affluent customers on Citi Priority, an automated and standardised adviser product. It will introduce the online tool step by step in emerging markets.

The tool is aimed at 20- to 40-year-old, highly educated clients, with a penchant for investing their money and good perspectives for rising incomes. Through the digital platform they can access investment advice and acquire a series of standardised bank and insurance products. In addition to that, they profit from higher interest on savings and lower credit rates.

UBS Put Under Pressure

Citibank has been using the digital platform in countries such as Brasil, Poland and Russia since 2014. The offer will be extended to other markets later. Citi Priority is an example of how a digital platform can be used - opening it to customers in numerous countries with only slight adjustments.

UBS, thus put under pressure by its competitor, is working hard to come up with a digital platform for use around the globe. The bank only then will be able to attack the segment of affluent customers in Asia and other emerging markets, hitherto left to the competition.

Citigroup has now taken the technological lead in trying to gain the No. 1 spot for the bank with the most assets under management in Asia. UBS, wanting to keep the top spot, has promised to catch up with a platform in Singapore and Hong Kong next year, as reported.


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