Kiat, what do you see as our APAC clients’ current objectives and challenges? Do they differ from other regions? And how do you see J.P. Morgan helping?
Asia clients face a key challenge -- balancing their need to consolidate service providers against their desire to maintain good relations with all interested parties. Asia may differ culturally from other regions given the value placed on peaceful and harmonious co-existence; but even with this cultural backdrop, every institution still wants to enhance its profitability, increase its efficiency and deliver more shareholder value. J.P. Morgan assists our institutional clients by acting in a consultative capacity – understanding the client’s needs and proposing a solution that is viable and at the same time sensitive to their other banking relationships.
Another key concern for us is the new regulatory environment. It is something we all have to deal with and something we all have to embrace. We have new consumer protection policies, new requirements for capital, and new tax and AML regulations, with compliance required from every region and every country in which J.P. Morgan is doing business. Given the globalized nature of the cash and trade business, these regulations have just as much impact in Hong Kong as they do in London or Washington, D.C. So we are very focused on helping our clients understand and navigate the global regulatory environment.
Client education and training can differentiate banks in your market. What are the client areas of interest and/or concern that can be addressed by J.P. Morgan’s thought leadership and expertise?
Asian clients’ training needs used to be very basic. They wanted to know how to format SWIFT instructions so that their transactions would be completed with straight through processing (STP). They wanted to know how to assess credit risk and how to set up risk management committees. All that has changed as Asian institutions have come of age. Many of them are now leading the field in terms of knowledge and best practices, especially as they embrace the technology that can best handle their workflows. Surprisingly, this automation development is a bit counter-intuitive given the fact that labor costs continue to be very competitive in Asia compared to other parts of the world.
It’s now not about client education and training but about the exchange of ideas. Clients ask us: How can we electronify our trade documentation? How should we use mobile technology to tap the “unbanked” space? How can we streamline workflows for batch file upload? They are asking us to help them think through their business strategy. They are looking to improve their efficiencies, and by doing so, to improve their profitability. They are asking J.P. Morgan to help them identify the ways they can best make that happen.
In 2013, J.P. Morgan won an unprecedented number of coveted awards from The Asset, a high-profile magazine that covers Asian banking and finance. In March, J.P. Morgan was also recognized as a Distinguished Provider by the market research firm, FImetrix, based on J.P. Morgan’s performance in client surveys. What do you think is the foundation for this kind of market recognition?
The foundation is our continuing commitment to deepening the value of the client relationship. We make sure we understand our client’s needs. We simplify and streamline their business with the solution we deliver. And just as important, we always deliver exactly what we have promised. Institutional clients continue to see the focus we have and recognize the value we bring when they partner with us. It is very gratifying to see the quality of our efforts acknowledged in polls and surveys when our clients are asked for their opinions.
Awards usually point to areas where there is potential for even stronger performance. Where do you think Asia financial institutions like J.P. Morgan have opportunities now? What countries, client segments and solution sets?
J.P. Morgan is the #1 U.S. Dollar provider to the top-tier banks in the APAC region, with approximately 30% market share of all USD payments traffic. But there are still opportunities for growth for us through client-focused solutions. Our approach will be to make solutions available via a globalized product suite, with certain offerings within that suite that are specific to our individual client's requirements. We already do this very well for financial institutions. We now need to export the same value to our solutions for non-bank financial institutions (NBFIs). This is perhaps a less well understood and under-penetrated segment where we see immense opportunities. Where NBFIs have traditionally only required cash management solutions to meet in-country requirements, their needs are expanding as they look at cross-border payments functionality and consolidation and begin setting up regional treasury centers.
The opportunities are certainly there, and we want to grow by tapping into these sectors. However, we also want to grow in a controlled environment where we understand the risks involved and how those risks are most effectively mitigated.
Can you describe how clients in Asia are feeling about European and U.S. regulatory developments? How are we expecting to help them within the new framework?
Dodd-Frank, Basel III, SEPA, the Payment Services Directive (PSD), and FATCA: all of these regulations are a huge concern to all of our Asia clients. Banks are rushing to ensure that adequate information is provided in order to be seen as being “in the know,” “up to date with the latest regulations,” and “helpful with regulatory updates.” The J.P. Morgan difference lies in our ability to interpret these regulations. We don’t just hand clients what is already public information.
Since you’ve joined us, have there been important changes in our approach to bank and non-bank financial institutions sales and relationship management in Asia?
A very strong demand for transaction banking services – both global and intra-regional—has evolved in Asia. So the way we are providing services has evolved as well. Our clients don’t make single product decisions now; they buy solution bundles and require plenty of consultation from us in order to address a wide range of underlying issues and concerns. We are providing that level of service.
This is an incredibly challenging and very exciting time to be at J.P. Morgan. The firm has a strong heritage in the region. We are building on that excellent foundation to provide a new level of service. Since joining the firm I have focused on three goals, which are really our clients’ priorities: understanding their needs, finding solutions, and adding value across their broader business strategy and objectives. Clients want us to talk to them about solutions that help them globally. They expect technology to give them a high degree of visibility into their cash positions and flows. They are looking for the kind of efficiency and cost reduction that come from integration of platforms and services. At all times, the big message I have brought to our sales effort is that the client is always at the center of everything we do, every single day. For the client, we must always deliver what we promise – innovative solutions that control, simplify and streamline the operations of their complex businesses.
This year the global economy continues to recover, but the recovery is still somewhat spotty, with a mix of good news and cause for concern. Do you see trends in the Asia economy affecting your business and your clients?
I believe the markets and the environment will always be challenging, both for the firm and for our clients. I also think we are at our best when we are helping our clients in a tough environment. J.P. Morgan has a history of supporting clients regardless of market conditions. The past decade, which has been quite turbulent economically, has provided J.P. Morgan with the opportunity to stand out against the competition. We have never stopped serving clients and investing in the future. We have best-in-class products and services and we have excellent people. Those strengths will allow us to deliver a superior solution to our clients now and far into the future.