Dominic Casserley and Greg Gibb and the Financial Institutions Team of McKinsey & Co., Banking In Asia: The End of Entitlement, John Wiley & Sons, 1999, 429 pages
Used to be, just having a banking license anywhere in Asia meant phenomenal growth and easy profits as bankers rode the wave of an economic boom that some call the Asian miracle. But that entitlement came to a screeching halt when the miracle turned into the Asian banking crisis.
Triggered by the collapse of banks and securities firms in Korea and Thailand, the crisis led to steep declines in currency and market values throughout Asia. The speed at which the turmoil spread throughout Asia stunned observers, who watched banks collapse under huge portfolios of nonperforming loans and investment houses close as devaluation led most investors to consider the region poisonous.
But bankers can still make big money in Asia; the game is simply very different and more difficult, claim the authors of
Banking In Asia: The End of Entitlement
. Dominic Casserley, Greg Gibb and the Financial Institutions Team of
McKinsey & Co.
-- one of the world's most influential consulting firms -- present an insider's view of what it will take to not only survive but succeed in the Asian banking world in the first decade of the 21st century.
The writers draw on years of work with banking clients from McKinsey's Hong Kong office to form this amazingly detailed analysis of the world of Asian banking, complete with a recount of the go-go years of the 1980s and early 1990s to projections of what that world will be like in 2010. They speculate that by 2010, banking revenues could nearly double from 1997 levels, a growth fueled by new customers, products and ways of doing business.
Although the Asian markets crashed hard and fast in 1997, according to the authors the crisis merely hastened changes that were already on the horizon -- such as more open regulatory environments, better educated and demanding consumers and increased competition.
To survive these changes, the old ways of banking in Asia must give way to new winning formulas, they say. And that's where this book steps in. It's a road map to bankers seeking to navigate the now-uncertain Asian banking market and should be required reading for anyone even thinking about doing business in Asia.
Chock full of tables, charts and graphs,
Banking In Asia
covers the key banking businesses in depth, with a chapter devoted to each, including corporate banking, investment banking, asset management, private banking and retail banking. And for each key market -- Hong Kong, Singapore, Taiwan, Japan, Korea, China, India, Thailand, the Philippines, Malaysia and Indonesia -- the authors take full advantage of their research team and give exhaustive looks at the special problems, concerns, challenges and opportunities. The chapters open with maps of the regions and a lists of social and economic indicators, including population, annual savings rate, number of corporations with $1 billion in sales and even how many people access the Internet.
Each country poses unique challenges. For example, Japan's dedication to hard work is so extreme that
-- death from overwork -- is a household word. In China, however -- a country shaped by half a century of communist economic policy -- some workers are actually paid to stay home.
Despite regional differences, the winners in this new age will be those who remember the basic rules of sound banking: rigorous risk management, focused strategies on a specific customer base or product line and hiring the best and brightest people. Although U.S. bankers chalk these rules up to common sense, they didn't have to follow such rules in Asia to make money before the crash of 1997. The economies of the region were growing so fast that bankers who were allowed to do business in the closed regulatory markets were making money hand over fist. When the bubble finally did burst, those same bankers were left with enormous, nonperforming loans, while customers ran as fast as they could to take their money elsewhere.
Throughout the book, the writers scatter sidebar tales of individual companies, detailing the strategies of winners like
, as well as the demise of losers like the now-defunct
. These examples of what works -- and what doesn't -- keep the reader interested. Also livening up the book are anecdotes about how personalities and relationships -- even which bankers can afford the hottest addresses in town -- define the big picture in each market.
An interesting and quick read, the book's chapters are broken down with several subheadings that give a preview of what's ahead. These are helpful, especially in those parts of the book in which the numbers threaten to overpower the reader.
Dive into this book if you have any interest at all in banking and the Asian market. And if you have serious plans to do business in the region,
Banking In Asia
could be the secret to your success.