Private banking has not always been accessible to all. Private banks have traditionally catered to an extremely exclusive clientele. Specifically, wealthy individuals are targeted. But what is private banking exactly? What distinguishes it from traditional banking, and what makes it so compelling? And how might you have access to it in the future?
Private banking in a nutshell
Private banking is intrinsically linked to the origins of the modern banking system, established in 12th-century Venice. Private bank advisors are tasked with managing the finances of wealthy individuals and families. They provide financial advice, perform banking tasks, and assist with other services.
Private banking includes investment, real estate, and concierge services for high-net-worth individuals (HNWIs). These specialized services and the assistance of genuine financial advisors distinguish it from mass-market retail banking.
Private banks are appealing because you virtually joined a club.
Retail banking vs. private banking
Private banking customers can access seasoned financial advisors who tailor financial strategies to their particular needs and objectives. Frequently, they would also make all financial choices on their behalf.
Retail banks, also known as personal or consumer banks, provide standard banking services to the general public, such as savings accounts, debit and credit cards, and loans. In addition to these services, modern digital banks enable customers to pay bills and transfer funds via mobile devices.
The advantages of private banking
Private banking is not limited to wealth management. Rather, Singapore private banking and other top banks also provide non-investment services that make it attractive to wealthy individuals. Here is a list of services that private bank customers can anticipate:
- Access to privileged investment opportunities (private equity deals, real estate opportunities, niche asset managers)
- Access to a global network of the most qualified industry professionals.
- Access to private events at some of the world’s most prestigious venues
- Conciergerie services
- Non-standard services (like art collection lending, jet and yacht financing, or setting up multi-jurisdictional trusts and philanthropies)
- Availability of networking options (through your banker, you have the opportunity to meet other millionaires/billionaires of your caliber, which is a very powerful benefit)
Breaking the private banking barrier
The high initial deposit restricts the number of clients who can access private banks’ expert financial advice, personalized services, and streamlined path to wealth.
However, the market is changing, including the Singapore private banking scene. Progressive banking services are increasingly taking steps to make these exclusive private banking services more accessible.
Emerging technologies like AI (artificial intelligence) also contribute to this shift. Globally, wealth management services are investigating ways to leverage technology to meet the growing market’s demands. According to a report by Refinitiv, 86 percent of wealth management firms view client service as a crucial digital capability to acquire.
In the coming years, financial services that combine the convenience of digital banking with the proficiency and personalized service of private banking have the potential to transform banking and investing as we know it, delivering on the promise of a truly personalized and democratized path to wealth for all.
For individuals and businesses looking to take advantage of Singapore’s private banking, it’s worth going with the top local bank as they will naturally have the best features.