Front Office

Strategy

P i ate Banking
Private
Bankin
General
orientations

Review and adaptation of

the business and
operating models of
Feasibility
ICMA
private banks
analysis
June 2013

Products

Pricing
& fees

Customers

Markets

Private
banking

Client
segmentation

A new paradigm for Private bankers

Context
FATCA & Dodd Frank

The world of finance is undergoing substantial changes as a consequence of the

financial crisis and the increased regulatory burden. These shifts in the financial
landscape have created permanent changes for the Wealth Management
industry
industry.
In this changing environment, Luxembourg private banks benefit from the
passport to do business freely in Europe and can seize the opportunities offered
to export their unrivaled experience and tailored services to clients abroad in a
more coordinated and transparent manner.
On the one hand,
hand this situation creates business opportunities for Luxembourg
Private Banking specialists. On the other hand, amendments to the regulatory
context contribute. to a change in the private banks operating model and
potential geographical organization.

MiFID II
Potential impacts
New AML regulations (CSSF
regulation, FATF, draft 4th
directive)
Potential impacts

Redefinition of AML
processes (e.g. on-going
monitoring, risk-based
approach)
h)

Operational costs

Phase I

End of banking secrecy for US

clients
Automatic exchange of
information
Increased risks to serve US
clients and US residents

Potential impacts

Ban on inducements

Notion of independent advice

Review of products
architecture

Freedom to provide services

(cross border business)

ICMA Charter

Potential impacts
Potential impacts

KPMG has developed a methodology to assist private banks in this challenging

paradigm shift. This methodology, which is broken down into a certain number
of phases,
phases can be adapted and customized to meet the actual needs of any
private bank:

As such, private banks need today to review and adapt their operating models to
the new business environment and regulatory requirements in order to ensure
compliance, profitability and sustainability.

Our proposition

Client regularization
New client acceptance
policies
Review of existing client
portfolio
...

As-Is analysis

Phase II Tax & Regulatory challenges

Phase III Strategic review
Phase IV Roadmap

Reputational risk

Automatic exchange of
information as of Jan 1, 2015

Potential impacts

Client regularization

New client acceptance

policies

Review of products
architecture

Phase V Implementation

2013 KPMG Luxembourg S. r.l., a Luxembourg private limited company, is a subsidiary of KPMG Europe LLP and a member of the KPMG network of independent member firms
affiliated with KPMG International Cooperative (KPMG International), a Swiss entity. All rights reserved.

KPMG
A coordinated approach

Phase I

Objective
es

AS IS analysis

Understand how the Bank

operates and draw
dra the picture
pict re
of its current business and
operating model

AS IS analysis based on the

following dimensions:

Main de
eliverables

Clients
Products & Services
Operations & IT

Phase II
Tax & regulatory challenges
Competitive analysis

Phase III

Phase IV

Phase V

Strategic analysis

Roadmap definition

Implementation

Understand the current and

f t re tax
future
ta and reg
regulatory
lator
constraints.
Consider competitive
information on clients home
markets

Analyse options relevant for the

f
future
business model off the
Bank, based on the outcomes
of Phases I and II

Define an action list based on

the
h outcomes off Phase
Ph
III and
d
an implementation roadmap

Perform the implementation

per se

Description of the main

regulatory and tax constraints,
impacts and possible solutions

Strategic analysis outcomes

report, matrix of scenarios and
strategic impacts for the Bank

Roadmap detailing
implementation activities,
financial and human resources
allocation and governance
framework

Implementation

Analysis of Private Banking

trends in other relevant countries

People

Clients

Ops
& IT

Products
& services

People

2013 KPMG Luxembourg S. r.l., a Luxembourg private limited company, is a subsidiary of KPMG Europe LLP and a member of the KPMG network of independent member firms
affiliated with KPMG International Cooperative (KPMG International), a Swiss entity. All rights reserved.

KPMG
How can KPMG assist you

Throughout these assignments, and depending on the

actual needs of our customers, KPMG can mobilize the
required
i d expertt resources from
f
our Tax
T and
d Ad
Advisory
i
practices :

Operational strategy
Business effectiveness
Regulatory and compliance services
Forensic & Anti-Money laundering services
Operational tax
Tax structuring of private wealth
People & Change
IT Advisory

2013 KPMG Luxembourg S. r.l., a Luxembourg private limited company, is a subsidiary of KPMG Europe LLP and a member of the KPMG network of independent member firms
affiliated with KPMG International Cooperative (KPMG International), a Swiss entity. All rights reserved.

Stanislas Chambourdon
Partner - Head of Banking
Tel : + 352 22 51 51 6206
Fax : + 352 22 51 51 71
stanislas.chambourdon@kpmg.lu
Grard Laures
Partner - Tax
Tel : + 352 22 51 51 5549
Fax : + 352 22 51 51 71
gerard.laures@kpmg.lu

Jean-Pascal Nepper
Partner - Advisory
Tel : + 352 22 51 51 7973
Fax : + 352 22 51 51 71
jean-pascal.nepper@kpmg.lu