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Organizer Global Finance
Region All

For most of the past decade, private banks struggled to keep up with an unprecedentedly mobile and global clientele. Board rooms loaded up on whiz-bang technology to transform the oak-paneled personal touch into anywhere-anytime, iPhone-sized financial management. Hands-on family counseling gave way to pop-up networking events in world capitals, one more calendar date for a jet-setting high net worth class.

In 2020, something funny happened. The jet setters had to stay home and began to crave—what else? The personal touch of trusted family counselors. Private bankers had to dust off old skills.

“We always had a close relationship with clients,” says David Bailin, CIO of Citi Private Bank. “This year I would describe it as truly intimate.”

Clients had plenty of appetite for trusted advice. Prevailing moods on the coronavirus pandemic swung from complacent to panicked and back more than once. Financial markets crashed, soared, then gyrated, more or less in tandem with that mood. Geopolitics did not take a rest either, with bitterly contested US elections, an assertive China and a still unsettled Brexit hanging over markets and personal destinies. Guidance on how to interpret this whirlwind of events grew more cacophonous as key world leaders scoffed at scientific consensus and media divided into partisan silos.

Against this background, private banks began to adopt an additional role as information source. Citi, Global Finance’s Best Private Bank for Net Worth of $25 Million or More, bombarded customers with online seminars featuring structured investment experts one day and epidemiologists the next.

“Clients absolutely loved our programming,” Bailin says.

“We had up to 1,800 people a week joining.” Competitors across the world followed suit. Brazil-based Banco Itaú Unibanco, our Best Private Bank for Digital Client Solutions, held some 200 webinars and virtual meetings with everyone from the bank’s own top executives to national politicians.

That doesn’t mean private bankers stopped leaning into technology as the Covid pandemic forced them to turn their business more fully virtual. Behind the scenes, evolving fintech and artificial intelligence systems kept speeding up and slimming down clunky back-office and compliance operations, handing a competitive advantage to the most adroit adopters. One example: Singapore’s DBS Bank, a perennial vanguard institution that takes this year’s award for Best Use of Technology, debuted an all-digital account opening system, short-circuiting reams of paperwork and giving it an inside track on new clients.

But private banking’s relationship with tech is maturing, says Anna Omarini, professor at Italy’s Bocconi School of Management, who studies fintechs; automated systems will neither disrupt high net worth advisers out of existence nor yield the killer app that enables them to overwhelm their competitors. Technology is back to being the cart, she argues, which every bank adapts to the horse of its clientele and brand.

“Tech is a force changing the industry, but not the only one,” says Omarini. “Banks should have a holistic approach to developing value for their customers.”

Battling Back

Rising competition at all levels is another force changing the industry: last year, this year and the next. At the upper end of the wealth scale, the ultrarich continue to migrate from private banks to family offices as their primary wealth management vehicle.

“Family offices are exploding now more than ever,” says Lauren Cohen, a professor at Harvard Business School who follows them. “Families don’t want to be one of 20 clients.”

At the lower end, mass-affluent brokerages keep shifting their goalposts and enriching their offerings to retain clients who cross the traditional $1 million private-banking threshold.

The best private banks are battling back. For ultrahigh ne worth individuals, that means symbiosis with family offices, doing what they can’t do for themselves: which is a lot.

“Family offices are trying to replace an organization of 1,000 people with a staff of maybe three,” Cohen says. “Many of the services private banks can provide are still incredibly valuable to them.” Northern Trust, our winner as Best Private Bank for Intergenerational and Family Office Services, understood this niche long ago. It extended its dominance this year by founding an internal think tank, the Northern Trust Institute, and expanding management options for philanthropies.

But the most decisive industry shift of 2020 was moving down market, blurring or obliterating lines between mass affluent and private banking to capture the soon-to-be-rich. Morgan Stanley, our Best Private Bank for Net Worth Under $1 Million, was already a leading mass-affluent “wirehouse” in the US. It stole a march on the competition this year with two major acquisitions: pioneering online brokerage E*TRADE and Eaton Vance, a midsized asset manager that combines institutional and high net worth accounts.

Other Wall Street giants followed the same trend. JP Morgan, which repeats in 2020 as the Best Private Bank in the World, redrew divisional lines to group clients from $250,000 to $25 million in net worth within one wealth management structure. Goldman Sachs, recognized this year as the best North American Bank for Entrepreneurs, reshuffled similarly to integrate private banking with its fast-growing Marcus online retail unit.

Staking Out the New Heartland

No less important than recognizing sub-$1 million clients was staking out a new private banking heartland in the (relative) middle tier of wealth, from about $5 million to $20 million, says Nalika Nanayakkara, who leads the wealth and asset management practice at Ernst & Young in New York. This is a challenging group to service because of its diversity: from athletes and entertainers to C-suite executives and law-firm partners. But it’s well insulated from raids by either wirehouses, which can’t offer sufficient services, or family offices, whose overhead is too heavy.

“Firms are finding out this neglected group is a gold mine,” Nanayakkara says. “All the big players are focusing efforts in this space.”

The pandemic seems to have accelerated another key concern of private banking clients: social impact. So-called environmental, social, and governance (ESG) funds kept growing even after the tumultuous start to 2020, according to Cerulli Associates.

Political events tilted in a socially conscious direction. The European Union and China both put ambitious climate-change targets at the heart of their post-Covid recovery strategies. Skeptics lost their global champion with Donald Trump’s reelection defeat in the US Markets also cooperated; stocks in “virtuous” industries like renewable energy and electric vehicles soared while oil and mining shares crashed.

More convincing for private bankers is the rising millennial generation’s faith in investing for good. UBS found that nearly three-quarters of high net worth 18-to-34-year-olds in the US mean to invest sustainably, compared to 6% of those over 65: a gap difficult to ignore as untold trillions pass steadily from the latter to the former.

UBS has been shifting toward ESG investment for a decade, and this year the Swiss industry giant formalized a “sustainability bias” as its “preferred solution” for long-term portfolio management. That earned UBS our nod as Best Private Bank for Millennials—now aged 24 to 39—despite no obvious hipster cred emanating from Zurich headquarters.

Past winners

2020 Winners

Best Private Bank In The World:
• J.p. Morgan Private Bank

Most Innovative Private Bank:
• Hana Bank

Excellence In Crisis: Client Services:
• Emirates Nbd

Best Boutique Private Bank:
• Lgt Bank

Best Private Bank For Social Responsibility:
• Bbva

Best Private Bank For Philanthropic Services :
• Credit Suisse

Best Private Bank Entrepreneurs :
• Credit Suisse

Best Private Bank For New Customer Segments:
• Credit Suisse

Best Private Bank For Intergenerational Wealth Management :
• Northern Trust

Best Private Bank For Family Office Services:
• Northern Trust

Best Private Bank For Digital Client Solutions:
• Itaú Private Bank

Best Private Bank For Islamic Services:
• Maybank Private

Best Private Bank For Business Owners:
• Btg Pactual

Best Private Bank For Millennials:
• Ubs

Best Private Bank In Emerging Markets:
• Ubs

Best Private Bank Use Of Technology:
• Dbs Private Bank

Best Private Bank For Net Worth Under $1 Million:
• Morgan Stanley

Best Private Bank For Net Worth Of $25 Million Or More:
• Citi Private Bank

Country Awards:

• Intesa Sanpaolo

• Andbank

• Banco Comafi

• Credit Suisse

• Schoellerbank

• Yelo Bank

• Soctia Wealth Management

• Ahli United Bank

• Ncb Capital Markets (Barbados)

• Banque Degroof Petercam

• Butterfield

• Btg Pactual

British Virgin Islands:
• Vp Bank

• Unicredit Bulgaria

• Rbc

Cayman Islands:
• Butterfield

• Larrainvial

• Ping An Bank

• Bancolombia

Costa Rica:
• Citi Private Bank

• Raiffeisen Bank International

• Eurobank

Czech Republic:
• Unicredit

• Nordea

Dominican Republic:
• Banco Popular Cominicano

• Cib

• Evli Bank

• Bnp Paribas

• Tbc

• Berenberg

• Zenith Bank

• Eurobank

Hong Kong:
• Hsbc

• Otp Bank

• Eleweiss

• Bank Madiri

• Aib

• Bank Leumi

• Banca Generali

• National Commercial Bank Jamaica

• Mitsubishi Ufj Morgan Stanley

• Arab Bank

• Equity Bank

• Nbk

• Lgt Bank

• J. Safra Sarasin

• Maybank

• Afrasia Bank

• Citibanamex

• Edmond De Rothschild

• Ckb Montenegro

• Cfg Bank