Rising costs and talent shortages are a headache for Singapore but the city-state is also consolidating its status as one of the world’s major wealth management hubs, two of Asia’s biggest banking players argue.

Rising costs and talent shortages are a headache for Singapore but the city-state is also consolidating its status as one of the world’s major wealth management hubs, two of Asia’s biggest banking players argue.

Private banking heavyweights, Tan Su Shan, managing director and group head of consumer banking and wealth management at DBS Bank, and Renato de Guzman, chief executive at Bank of Singapore, recently set out the credentials for Singapore’s status as the leading wealth management destination in Asia. They spoke at the Singapore Trustees Association annual conference.

The comments come at a time when debate continues on whether Singapore could eventually overtake Switzerland as the world's largest wealth management centre, particularly as the Alpine state's decades-old bank secrecy laws have come under global attack. Earlier this year, the Monetary Authority of Singapore said the value of assets under management in Singapore rose by 22 per cent last year to a record S$1.63 trillioon ($1.29 trillion. PricewaterhouseCoopers has predicted that Singapore could dislodge Switzerland as early as 2015. Industry figures say there were SFr2.8 trillion ($2.99 trillion) of foreign assets under management in Switzerland last year..

Tan emphasised Singapore’s status as the long preferred hub for numerous industries as well as being the hub for regional trade and Asian growth. She went on to say these factors, together with Singapore’s AAA credit rating and the continuing wealth creation across the region, validated her views. She also mentioned what she sees as the inevitable rise of an affluent middle class across the region which could reach some 1.5 billion people by 2020.

De Guzman echoed this message, going on to say that banks without scale and profitability that did not appropriately calibrate their Asian strategy were beginning to struggle. This he said will lead to more consolidation across the Asian wealth management industry while for others it will mean exiting the market altogether.

His views come at a time when Asia, seen as a relatively easy market for private banks coming in from outside, has seen a more cautious tone set in. Recently, it has been reported that Societe Generale may sell its Asia private bank, for example – and DBS Group is reportedly a suitor. (SocGen has steadfastly declined to comment on the matter when contacted by WealthBriefingAsia.)

Both Dr Guzman and Tan warned that rising costs and a limited pool of talent could affect the competitiveness of Singapore, although the industry, aided by the likes of the Monetary Authority of Singapore, is looking to address such issues.