Standard Chartered's global head of retail and personal banking on working in vastly different and challenging markets, leadership, and what differentiates his bank from the others
Singapore: In July 2013, at age 42, T.S. Anil became one of the youngest leaders at Standard Chartered Plc. He was promoted to become the global head of retail and personal banking. With his extensive knowledge of markets across Asia, Africa and the Middle East, and having worked in both emerging and developed economies, Anil had built an enviable network and expertise over two decades, which were deemed critical to help expand the complex consumer banking business globally.
The ask was high; to work in vastly different and challenging markets to deliver high growth, but since taking the job, this banker has not disappointed.
Anil’s business delivered close to $5 billion in revenue in 2013, or a little over a quarter of Standard Chartered’s global revenue, and is set to continue its growth momentum.
“It’s a very exciting and challenging mandate and one that I am confident will continue to yield results," Anil said in an interview. “My team and I have to drive a very high growth target, while managing a very complex range of differing markets. For example, we have large markets like Korea—where we are navigating a combination of a credit crisis and slowing growth; in contrast, we also operate in the intensely competitive city-state markets of Singapore and Hong Kong. In addition, we also have to aggressively tap into the vast and high growth markets of India and China that are also intensely competitive."
Standard Chartered announced in January that the bank would reorganize to sharpen its strategy and focus on driving investment, trade and the creation of wealth across Asia, Africa and the Middle East.
Two businesses—wholesale banking and consumer banking—were integrated to form one business. Anil was named the group head of retail products, leading one of the five product groups (the others being financial markets, transaction banking, corporate finance and wealth management). Retail product encompasses credit cards, mortgages, current and savings accounts, personal loans and digital payment products marketed to individuals and small businesses.
“This is an intensely competitive market, and customers are increasingly more demanding and sophisticated," says Anil. “Banks need to provide great products that meet the financial needs of these customers through their life cycle, while also managing the evolving and complex regulatory environment and making robust risk and return trade-offs to grow the business."
When asked what has led to the profitability of his group, Anil says as a leader, he differentiates himself by being “a very keen observer of upcoming marketplace trends, and is passionate about the digital transformation of banking, and the emergence of new capabilities and business models". Alongside, he is also rooted in the nitty-gritty of banking and has seen businesses and markets through multiple credit cycles. His peers say that he has built a reputation of having the ability to monitor, identify and mitigate emerging credit risk, reputation risk and business risk for the bank.
Anil is a graduate of the Indian Institute of Management-Ahmedabad, an institution he terms as an “incredible place that brings together a very diverse set of people from across India to create a fertile environment for success and creativity". He started his career at Citibank NA in 1993. In late 1999, Anil moved to Washington DC with Capital One for almost six years, working across their Canadian and US operations. The lure of emerging markets proved strong, and he decided to move back to Citi in Singapore in late 2005. He rose quickly to become the president and chief executive officer of CitiCards Japan Inc. in 2007 and moved to Tokyo. He cherishes this experience as a memorable one and says this was “one of the most exciting and challenging roles of my career". Anil took over a business unit, which was under tremendous pressure—a large part of the business was making huge losses, and the challenges were exacerbated by a sagging Japanese economy and big regulatory changes. He turned the business around within two years with some tough decisions of exiting some businesses, cutting costs, and keenly focusing the business on profit-making segments. All this did not come easy, but, he says, it all boils down to clear thinking and leadership.
“Leadership for me is about being strategic, results-oriented, self aware and relationship-driven," he says.
He differentiates Standard Chartered Bank from others by stating that “unlike, our other global foreign bank peers, we see the emerging markets as our home markets, core to our strategy, and not merely as an addition to something else; and this is reflected in every single touch point we have with our customer."
Anil is bullish about India, despite the inherent political and economic challenges, and says, “We have been in India for over 150 years; we are even listed on the stock exchange in Mumbai, so we know how to do business there. We are deeply committed to doing business in India and this will only grow in the coming decade."
How do you see the market for retail banking shaping up in Asia?
Retail banking in Asia is poised for an era of unprecedented opportunities as global growth shifts eastward. McKinsey and Co. has projected that Asia will reach over $900 billion in retail banking revenue by 2020, growing at about 14% per year from 2010. Asia is expected to be the second largest wealth management region globally after the US, with more personal financial assets residing here than in Europe by 2015. Furthermore, emerging Asian countries are accounting for most of this high growth, and will soon have attracted more revenue in absolute terms than developed Asia.
What are some of the key reasons for this unprecedented growth in retail banking in Asia?
There are many reasons for our long-term confidence in Asia’s markets. A big factor underlying this is the rapidly growing and urbanizing middle class, which has transformed the traditionally frugal Asian consumer to almost double consumption from $5.8 trillion in 2006 to $10.2 trillion in 2012.
This growth in consumption has been fuelled by a significant increase in borrowing. In Asia, borrowing in the period between 2000 and 2012 in retail assets, consumer finance, mortgages and micro loans has grown an average of over 500%.
In addition, when you consider that from 2007 to 2012, the population and the wealth of Asia-Pacific’s high net-worth individuals (HNWIs) increased at 2-3 times the rates of HNWIs in the rest of the world—you can see why the pace is not slowing down.
Also, it is significant to note that the offshore wealth of Asians is now estimated to be $2.1 trillion, by the Boston Consulting Group. This is a big number!
And then, of course, there are secular trends like the digitization of payments—away from cash to credit and debit cards. This is driving the growth in the credit cards business, where purchase volumes on cards in Asia-Pacific are expected to grow two-and-a-half times from 2012 to 2018.
What are some key challenges in retail banking in Asia?
While there has been high revenue growth, Asian retail banking is also seeing downward pressure on returns. While typical retail banking ROEs (returns on equity) could be in the mid to high teens, these rates are being driven down by various factors, including regulatory changes (such as the impact of Basel III, various regulatory measures across different markets), the impact of higher risk levels because of the credit cycle and slowing growth, and rising customer sophistication, which results in lower loyalty and reduced margins.
Also, the opportunities in retail banking are not always easy to capture. Rapidly shifting consumer behaviour calls for a revamp of the traditional operating models—the role of the “branch", as we have known it, will evolve going forward, and new channels will need to be introduced, and new capabilities will need to be built.
Alongside, the nature of competition is changing. Non-traditional players are entering the market, vying with banks for the same revenue pools. Still, retail banking in Asia is one of the most exciting businesses to be in and one that will continue to drive growth in the coming decade.