Analyses, Commentary, Perceptions

Banks are going through one of their toughest times in history. The subprime crisis and resulted credit crunch has led an economic slowdown with many banks breaking down and others struggling for growth. As the interest and investment revenues are becoming more and more undependable, banks are turning to fee income for growth. Thus, banks are turning into corporate banking which brings them the major share of fee income.

Being one of the fastest growing segments, the significance of UMAs (Unified Managed Accounts) in managed accounts is increasing exponentially and the industry is showing a clear journey towards UMAs from SMAs (Seperately Managed Accounts). UMA is a professionally managed fee-based private investment account that is rebalanced regularly and can encompass every investment vehicle (e.g. mutual funds, stocks, bonds and exchange traded funds (ETF)) in an investor's portfolio, all in a single account unlike SMA, in which the investor will have to open separate accounts if he wants to diversify his portfolio among different investment vehicles.

With the rise of consumerism and the credit boom, the property development sector has been witnessing a tremendous surge across the world in the last decade. Cashing in on this trend, property developers have started to build up landmark projects to lure global investors and prospective buyers, thus increasing competition in the segment. In this highly fluid landscape, developers face the demands for more luxury and convenience, due to increased disposable income and the evolution of the rent-to-own concept. Given these circumstances, developers and in-turn their property managers require powerful planks such as sharp service differentiation and aggressive customer acquisition to tame competition.

Market is converging with telcos, banks, utilities, retail all targeting one single customer segment. As providers cross their vertical boundaries and make themselves adept with an umbrella of services to include banking, insurance, gas, water, electricity, communication, retail – they are more positioned to be a virtual organization. Here the only game is branding and customer ownership is the only objective.

Financial institutions are going through a tough time. Heavy competition, product commoditization, increasing regulatory burdens and increased demand from customers are urging banks to look for new avenues for organic growth. This has brought about a shift from the traditional product-centric strategy to customer-centric strategy, giving prime importance to their customer relationships.