From Wealth Manager to Family Steward... The Evolution of PB

Hana Bank Introduced PB Service for the First Time in 1995
Intense Competition Among Commercial Banks to Attract High-Net-Worth Clients

The Private Banker (PB) service, which was introduced in Korea 30 years ago this year, is evolving. In the past, it was simply a role of a 'butler for the wealthy,' but recently, the scope of services has diversified to include overseas investment and immigration consulting, posthumous will execution, and matchmaking arrangements, expanding into customized services tailored to different life stages. Especially this year, as the market enters a full-fledged interest rate cut phase, competition in PB services is expected to intensify further, with commercial banks focusing on non-interest income sectors.

According to the financial sector on the 10th, Hana Bank is leading the market. Hana Bank introduced the PB business model domestically for the first time in 1995, starting with 6 PB channels and 12 specialists. After 30 years, the number of specialized channels has increased to 212, and the total number of related specialists has grown to 313, about 20 times more.

Hana Bank is responding to the demands of asset owners by segmenting its channels. When the PB business model was first introduced, it targeted customers with assets over 100 million KRW, but now it is segmented from 100 million to over 3 billion KRW. The Hana Bank Club 1, targeting ultra-high-net-worth individuals with assets over 3 billion KRW, currently operates in two locations: Samseong-dong and Hannam-dong. This year, they plan to open the third Club 1 PB Center in Dogok-dong to expand their premium asset management channels.

Another distinctive feature of Hana Bank PB Centers is their differentiated specialists. Hana Bank is leading the market by training specialized PBs and staff for specific tasks such as ▲Living Specialist PB ▲Digital PB ▲Global PB ▲Converged PB ▲Pension Specialist Team Leaders. Particularly, PB staff with expertise in specific tasks perform not only asset management for VIP clients but also specialized consultations for will-substitute trusts for inheritance planning, professional asset management through non-face-to-face channels, and corporate finance (IB) services. Currently, Global PBs are limited to the Hong Kong branch, but there are plans to add Global PBs at the Los Angeles branch in the future.

Not only Hana Bank but also other commercial banks are competitively strengthening their PB services. As the market enters a full-fledged interest rate cut phase this year, a decline in net interest margin (NIM), a key profitability indicator for banks, is inevitable, leading to a strategy focusing on non-interest income sectors. KB Kookmin Bank's PB Centers target high-net-worth individuals with financial assets over 300 million KRW. Since August 2022, they have been operating the premium PB brand 'KB Gold & Wise The First Center' for ultra-high-net-worth individuals with assets over 3 billion KRW. Shinhan Bank operates 'Shinhan Premier PWM' for high-net-worth individuals with financial assets over 1 billion KRW and 'Shinhan Premier PIB and Premier Family Office' for ultra-high-net-worth individuals with assets over 10 billion KRW. Woori Bank is also aggressively expanding its PB services. Woori Bank targets high-net-worth individuals with financial assets over 1 billion KRW and has established specialized branches such as 'Two Chairs W' and 'Two Chairs Exclusive' focusing on key regions since October last year.

Recently, the scope of services has expanded beyond asset management to include networking and exchanges among asset owners. Hana Bank has been arranging meetings for children of high-net-worth individuals for over 20 years. It is reported that some of these meetings have resulted in marriages. Since September last year, Woori Bank has partnered with the matchmaking company Gayeon to provide services to Two Chairs Exclusive grade customers and their children. Shinhan Bank has been operating the 'Shinhan Next Leaders Program' for 25 customers born after 1984.

A PB Center official from a commercial bank said, "In the past, the concerns of high-net-worth individuals were limited to traditional asset management areas such as inheritance and gifts, but recently, with the emergence of the young rich, inquiries to PB Centers have diversified to include donations, overseas investments, and networking," adding, "We are enhancing the expertise of PB personnel to respond to these trends."