SBI taps into wealth management segment
The service called SBI Exclusif will be open to customers with a wealth base of `30 lakh, which may be relaxed to `10-15 lakh if the bank feels the customer has the potential
Premium
Bengaluru: State Bank of India (SBI) on Thursday became the first public sector bank to launch wealth management services, differentiating itself from its private sector peers by linking performance incentives for its relationship managers to satisfaction of customers and the maximisation of their wealth.
The service called SBI Exclusif will be open to customers with a wealth base of ₹ 30 lakh, which may be relaxed to ₹ 10-15 lakh if the bank feels the customer has the potential for scaling up wealth. Non-resident Indians will be tapped as well.
Initially, three SBI branches in Bengaluru—Indiranagar, Koramangala and Central Bengaluru—will offer Exclusif services. The bank plans to expand wealth management to other cities soon.
Speaking at the launch of SBI Exclusif, bank chairperson Arundhati Bhattacharya said, “We are the first public sector bank to launch wealth management services. Remote banking would be made possible through e-wealth centres offering relationship management services for extended hours."
SBI Exclusif customers will have access to a dedicated relationship manager and a service manager, supported by a team of investment experts, similar to the concept followed by ICICI Bank’s wealth management division.
According to Bhattacharya, SBI Exclusif will differ from private banks that dominate the wealth management space since “this is a multi-channel initiative that includes Internet and mobile. It is the best of its class as its technology is the very best."
The bank has tied up with several technology and product partners to offer exclusive products and services such as tax and legacy planning and a wellness benefit card.
In the wealth management sector, there is often misselling of investment products thanks to lack of awareness among customers and a tendency among relationship managers to reshuffle portfolios since that fetches commissions. Bhattacharya said SBI will guard against misselling by setting up a strong mid-office.
“We have also told our people that we will not link it to the amount of top line garnered... That is, the churning that happens to garner the top line will not be a criterion to get incentivised. It would rather be based on customer satisfaction and customer maximisation of wealth."
“We will ensure that risk profiling is done very well so that we understand the customer’s risk appetite. So, whenever a product is offered, there will be a trigger telling us whether it is going against the risk or not. Other triggers will come up if too much of a churn is going on in a portfolio. Our aim is to ensure that the product and the satisfaction that goes with it should exceed whatever people have experienced till now (under wealth management)," Bhattacharya added.
If SBI manages to change the way relationship managers are compensated, it would be a first for the banking sector and might pave way for more ethical practices in the wealth management industry.
"Exciting news! Mint is now on WhatsApp Channels 🚀 Subscribe today by clicking the link and stay updated with the latest financial insights!" Click here!
