Recruitment drive central to HSBC’s Asian expansion plans

HSBC has long been the pre-eminent wealth manager in Hong Kong, serving billionaire Chinese tycoons and local high net worth entrepreneurs, achieving record net inflows of $14.5bn in 2019. The first six months of 2020, a troubled year for many, saw $6.8bn of net new money.

Now the bank wants to use its expertise in both commercial and private banking to reach out to a broader constituency of Asian business elites, encompassing mainland China in the north and Indonesia in the south.

Central to this ambitious reinvention is Jackie Mau, head of HSBC Global Private Banking’s Asia-Pacific ultra-high net worth business since December 2019. His unit serves clients with assets of $30m plus, accounting for the lion’s share of HSBC’s $150bn Asian client book.

“Today, our position is uniquely in Hong Kong,” says an ebullient Mr Mau, speaking over a Zoom link from the bank’s 47-floor iconic steel and glass building on Queens Road Central, designed by British architect Sir Norman Foster. “Elsewhere, we have not been able to rely on our franchise value, as we are competing with big regional banks.”

Under the leadership of regional private banking head Siew Meng Tan, who recently outlined a blueprint for HSBC to become the “leading wealth manager in Asia”, it will be Mr Mau’s role to deliver a refreshed ultra-high net worth pan-regional offering. He plans to achieve this through a combination of digitalisation, talent acquisition and addition of new diversifiers to client portfolios.

The first challenge will be to improve the client experience. While HSBC has prospered from tight relationships with Hong Kong’s industrial conglomerates, it has sometimes lagged local and regional competitors in digital innovation. HSBC has invested $100m in Asia over 2019/20 in order to improve this digital delivery, including implementation of a new core ‘Avaloq’ banking platform.

Silver lining

The Covid pandemic is also helping change the trajectory. “It was previously very difficult for us to catch up with our frequently-travelling clients,” remembers Mr Mau. He vividly describes a loyal base of Hong Kong tycoons, demanding regular face-time with bankers, yet unable to commit to time slots due to hectic regional travel schedules, visiting remote manufacturing facilities.

Now, members of this wealthy elite, newly restricted in their business itineraries and, like Mr Mau, missing their winter skiing sojourns in France and Switzerland, are left with ample time to discuss asset allocation and wealth planning. “When Covid first hit this part of the world, everyone started working from home,” recalls Mr Mau with a smile. “This has provided a golden opportunity for us.”

It is an opportunity which requires an acceleration of digitalisation, achieving the economies of scale demanded by the bank’s cost-conscious bosses, while maintaining the face-to-face relationships for which the bank is famed. “Although we need to speed up our digital agenda, you can’t expect Asian tycoons to do all their trading online,” he reflects, conscious of his clients missing the “human touch” during the pandemic period.

“The Philippines, Indonesia and Malaysia are all living through significant lockdowns,” with bankers missing the family meetings they previously relied on for extra insights into client behaviours. “Hopefully this is something we can resume again soon.”

Recruitment strategy

Achieving this “delicate balance” in the ultra-high net worth space will involve sharpening recruitment strategy. Traditionally, HSBC has promoted from within, “upscaling” bankers from the $1m to $5m ‘Jade’ space and the $5m plus high net worth segment to deal with the wealthiest families and entrepreneurs.

But Mr Mau knows he must cast his net wider, seeking retail and commercial bankers, both internally and externally. “A corporate banker of 10 years’ standing coming into a private bank can have a much more fruitful dialogue with entrepreneurs than just a pure play private banker,” he insists, keenly aware of the intense competition for this lucrative ‘ultra’ space, fought over by the likes of UBS, JP Morgan and Julius Baer. 

“Although HSBC Private Bank in Hong Kong and Asia as a whole has a great reputation with bankers and clients, it is not somewhere senior bankers would immediately be drawn to joining,” says Simeon Fowler, a leading private banking recruitment consultant in Hong Kong and Singapore. “On the UHNW side, under Jackie, they have done well in hiring a few people for the solutions team. However they never seem to attract the biggest and best names when hiring RMs.”

Mr Mau acknowledges he needs more external hires to boost innovation. To this end, he is targeting key strategic hires from rivals, rather than poaching whole teams and leaders. The way which the industry approaches this recruitment and training of young bankers will be crucial to its survival and growth, he believes, particularly for his own faster-growing segment.

“Every bank, especially in the ultra-high net worth space, because of the pace of wealth growth, is competing for the same talent, the front-line RMs and the second-liners in compliance and risk control,” he says, with newer wealth emerging increasingly from China and Indonesia. “We need to ask ourselves: do we have people in Hong Kong, an offshore private wealth centre, with the capability, know-how and culture to be able to resonate with these people?”

It is not just Hong Kong, however, which accounts for most of the 300 new roles created since 2018, where he must boost staff numbers and resources. The bank has another 400 hires to make in its plan to overhaul its Asia private banking business by 2022, having promised a “key focus on Greater China and the Asean region”.

HSBC must respond to diversification requirements of local tycoons fearing they could fall victim to the political clampdown from mainland authorities. While most of these families have already acquired foreign citizenships, they continue to set up accounts outside Chinese jurisdiction. 

“People are trying to diversify by thinking about Plan B, due to Covid, geopolitics and the need for trust and family wealth planning,” says Mr Mau, highlighting the work of Singapore’s authorities in trying to attract family office business. 

Spreading out

Increasing HSBC’s presence in Singapore and throughout the surrounding Asean region, encompassing resilient economies including Indonesia, Thailand and the Philippines, is central to the bank’s regional strategy. 

Diversification in investments includes both a renewed focus on European markets, especially in real estate, and more detailed attention to opportunities closer to home. The “interconnectivity” of various units of the bank is vital to this vision and Mr Mau talks about his willingness to use HSBC’s commercial bankers in China to create links between TMT and healthcare start-ups on one side, and his private equity-hungry family office clientele on the other. This also plays into HSBC’s key regional investment theme of ‘Shaping the new China’. 

While China has been in the forefront of this technological revolution, the bank’s clients have not previously enjoyed adequate access to the returns it has created. Mr Mau, who revamped the product offering from 2018 to 2019, vows to change this. 

During the last 12 months, HSBC’s Asian private bankers have facilitated an inflow of more than $1.3bn into alternative investments, including private equity, distressed debt and real estate. He expects a surge of investments into this asset class over the next five years, reflecting industry predictions of Asian family office allocations to alternatives rising towards 40 per cent.

Familiarity with cultural factors is vital to this journey. Having arrived from the investment banking field, where Mr Mau saw a “decent” pool of talent, serving mainland Chinese clients, speaking Mandarin and well-schooled in all aspects of cultural and social affinity, Mr Mau would like to encourage the same kind of progress in the private banking world.

This cultural requirement also applies to the Asean economies. “We need to put this mindset in place in private banking, grooming talent with that know-how, with that culture and understanding of people,” says Mr Mau, calling for the transfer of more talented young people from sell-side banking roles to servicing private wealth in order to match market growth and demand. “The talent pool is something all of us, as an industry in Asia, need to address.”