State Bank of India (SBI), the country's largest commercial bank, has taken the lead among State-owned banks and formally entered the wealth management market with the launch of SBI Exclusif on July 29.
The new service will be targeted at the 'upwardly mobile' and not the ultra-high networth individuals (HNWI), said Manju Agarwal (pictured), deputy managing director, SBI, in a statement.
SBI Exclusif is aimed at the fast-growing affluent segment in the country and is design to provide a 'comprehensive and best-in-class' banking experience to retail customers. SBI Exclusif customers will have access to a dedicated relationship manager (RM) supported by a team of investment experts which will take care of all their banking and investment needs through various channels i.e. in-person, a first of its kind 'e-Wealth' channel (remotely via a call or video conversation) or through future ready digital (internet banking/mobile) channels.
As a bank and now a wealth management outfit, SBI is aware that investor awareness is the key to run a sustainable business, according to Shantharam Pai, deputy general manager, wealth management, SBI.
"We have plans to organize multiple investor awareness camps and workshops in association with the bank branches and our subsidiaries," said Pai, adding that SBI Exclusif's wealth management service will include investment advice on debt, equities, G-Secs (government securities) and also structured products. For structured products, SBI has already tied up with leading market players such as Reliance Capital and Citibank.
"At this stage, our product offering is limited to mutual funds (availed through the bank), equity, real estate and secondary bonds (available through our subsidiary) and portfolio management services (on a referral model, to third party manufacturers). Exposure to structured products is under consideration," said Pai.
SBI's one-year target is to plug-in 5,500 customers and achieve assets under management (AUM) of Rs7,500 crore. The new wealth management platform will also be made available to corporates, trusts, temple funds, army funds and other organisations with surplus funds in the near future.
The Indian bank launched the offering in Bengaluru on a pilot basis in January and will be rolled out to other cities during the course of the year.
SBI Exclusif is a premium offering by the bank and is currently available for retail resident investors only, who are clients of SBI, according to Pai. "This service basically serves the purpose to cater the needs of demanding clients who were being serviced by other players in the financial services market in India," said Pai. "With an array of product portfolio [services] being offered through the bank and its subsidiaries, we're able to now offer a comprehensive wealth management solution to our clients."
To ensure a high quality of service, the bank has ensured that RMs and investment experts have significant prior experience and also have undergone extensive training with leading global institutions. SBI customers will have access to the 'best products across categories from market leading institutions', as SBI Exclusif is based on an open architecture basis and there is no restrictions for customers to choose products from few specific institutions.
SBI Exclusif will introduce a number of firsts in the country's wealth management segment including the first 'e-Wealth Center' which can deliver quality relationship management services remotely for extended hours, as well as digital mobile and internet channels for users to be able to view their investment portfolios, and transact and invest via those digital channels. The bank has partnered with several technology and product partners to provide an extensive suite of products and other services such as top tier credit and debit cards, tax and legacy planning services, among others.
In India, public sector banks have traditionally not been in the area of wealth management as a dedicated service. SBI's move to introduce comprehensive wealth management services is testimony of the need for such specialised wealth management services in India given the growing affluence of people in the country.
IISL releases new private bank benchmark
Edelweiss: India has the ingredients and appetite for a strong structured products market
IISL expands 'smart beta' offering
AIPL gears up to launch suite of Indian benchmarks
BSE and S&P DJ Indices launch Asia Index joint venture