Publication Type

PhD Dissertation

Version

publishedVersion

Publication Date

8-2025

Abstract

The banking industry and its origins can be traced back as far as 2000 BCE. Traditionally, the primary purpose of banks has been to store value – for example through saving accounts or taking deposits – and to lend money through, for example, granting credits. This business model of being the intermediary between money depositing and loan seeking parties has remained largely unchanged and intact until today.

With the development of new financial technologies (Fintech), its impact on the financial services and banking industry has been studied by many scholars to date. However, to what extent these technological innovations will change or even interrupt the Private Banking industry servicing the tip of the wealth pyramid – High Net Worth Individuals (HNWI) and Ultra High Net Worth Individuals (UHNWI) – is a poorly understood issue which requires more research work.

Therefore, this research study further deepens the understanding of the impact of Fintech innovations on the Private Banking industry in Singapore. It provides insights for the incumbent industry to not only protect their existing business but allow them to grow their market share further and not being disrupted by technology companies – or in other terms, to avoid what Bill Gates stated in 1994 “Banking is necessary, banks are not” from happening. Due to the apparent lack of secondary data on this topic, the study proceeded by using a grounded theory approach through conducting expert interviews in phase one and Relationship Manager interviews in phase two.

Firstly, the outcome of the study contributes to and extends the existing literature in relation to the impact of Fintech innovations on the practice of banking. Secondly, the thesis guides the incumbent Private Banking practice and provides incumbent Private Banks with conceptual recommendations on how they can protect and further grow their market share, deal with potential margin compressions and eventually create a moat around their business model to avoid being disrupted by new market entrants.

Findings and results of the present study revealed that Private Banking firms shall focus on five core aspects in order to stay relevant:

  1. Openness to adapt and innovate business model and technology infrastructure;
  2. Focus on what they are good at and invest into the capabilities of human capital and state-of-the-art investment advice;
  3. Ensure that the security and safety aspect of their Private Banking clients is taken care of from a data management perspective as well as asset perspective;
  4. Regulatory environment to be looked at not only from a cost but also from an opportunity perspective, and
  5. Create operational efficiency due to ever increasing margin pressure and increasing costs.

These five core aspects are summarized into a conceptual guidance and actionable strategy for the incumbent Private Banking firms. Overall, the thesis suggests that the Private Banking industry will still have its place and that a disruption from technology firms is unlikely to happen due to the high touch nature of the business and the need of hyper personalization in terms of services to address expressed as well as latent client needs of the High Net Worth Individual and Ultra High Net Worth Individual client segments.

To provide these hyper personalized services to clients, the Relationship Manager – being the closest link to the client – will remain key also in future. It will be important for Private Banking firms to ensure that Relationship Managers will be enabled and supported sufficiently during the upcoming journey of technological transition of their business. In particular, it will be of utmost importance for Private Banks to achieve a high user acceptance by Relationship Managers in relation to new technology tools rolled out in the future.

Degree Awarded

Doctor of Business Admin

Discipline

Technology and Innovation

Supervisor(s)

MENKHOFF, Thomas

First Page

1

Last Page

136

Publisher

Singapore Management University

City or Country

Singapore

Copyright Owner and License

Author

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Available for download on Friday, March 05, 2027

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