PARVEZ MURSHED

When Citibank Chief Executive Officer (CEO) Jane Fraser decided to wind down the bank’s retail operations around the world, her main focus was to pivot towards wealth management. HSBC has taken a similar approach, and its recent closure of retail banking in Bangladesh and markets such as Indonesia reflects this shift.

Globally, banks have realised that retail banking involves high costs, consumes large amounts of capital and generates relatively low returns. JP Morgan, for instance, does not offer retail banking outside the United States, its home market. Even with advances in digital banking, maintaining the infrastructure that supports retail operations is enormous. As a result, many international banks are now concentrating on the top of the customer pyramid, focusing on wealthy clients to generate higher revenues through fees, investment products and cross-selling opportunities.

This raises an important question: why are banks in Bangladesh still focusing so heavily on retail banking, with an ongoing expansion of physical branches? In an age of internet and mobile banking, most customers can complete almost all their transactions without ever visiting a branch. For banks operating in urban areas in particular, it makes far more sense to shift their focus towards wealth management.

Recently, I visited the Priority Banking and Wealth Management centres of several leading banks in Bangladesh. What I observed was that most of them offered remarkably similar packages, such as meet-and-greet services at airports, free lounge access, complimentary health screenings and certain service charge waivers. These are attractive perks, but they are hardly unique. One can barely distinguish the offerings of one bank from another. Where the real gap lies, however, is in the lack of depth and expertise among bankers when it comes to true wealth management advisory.

Wealth management should not simply revolve around privileges and perks. It should offer meaningful insights and expert advice on emerging global trends, investment strategies and legacy planning. This requires experienced professionals who understand not just the financial products but also the broader economic outlook. Unfortunately, many of the relationship managers working in priority or wealth banking in Bangladesh are recent graduates with limited banking experience.

Banks need to invest in structured training programmes to develop these employees into skilled advisers. In mature markets, senior and highly experienced bankers are usually assigned to such roles. They bring credibility, judgement and insight to client conversations.

New entrants are, of course, welcome to join wealth management, but they should first spend time learning the fundamentals of banking regulations, compliance requirements and financial planning before handling client portfolios.

Their roles must evolve beyond answering client phone calls or issuing tax certificates. With artificial intelligence and technology taking over many basic administrative functions, relationship managers must concentrate on what cannot be automated: understanding client aspirations, building trust and providing tailored financial solutions. The human touch, combined with professional expertise, is what sets exceptional wealth managers apart from standardised, one-size-fits-all services.

It is time for banks in Bangladesh to rethink their approach. The future lies not in expanding branches for basic retail services, but in building strong wealth management capabilities that cater to the growing segment of affluent clients. By investing in training, developing advisory skills and nurturing a culture of professionalism, banks can position themselves for long-term success and play a vital role in strengthening the country’s financial sector.

The writer worked for Citibank and Standard Chartered Ventures in Bangladesh and Singapore as regional head of business. He can be reached at parvez.murshed@gmail.com