A cursory search of “top global banks” will yield a list, typically according to size and assets, of a familiar set of names. While many of these same names are mentioned in this piece, understanding why a bank is considered a top global bank is much more nuanced than how big they are or how much they’ve netted.
Leading global banks are recognized as leading by their peers because they perform exceptionally well in one of more categories. No bank has a monopoly over leading performance in investments, digital services, sustainable finance or diversity and inclusion. It’s hard to the be the top dog in everything. Therefore, we’ve selected the leaders in each of the previously mentioned, timely categories, as these are the categories that are most relevant in 2019 and these are the banks that are setting trends and leading by example.
To begin, investments is a tough category to rank, but experts widely agree that Citi is the best investment bank in the world. While Goldman Sachs and Morgan Stanley are highly regarded, when it comes to exceptional performance across regions (North America, Latin America, Western Europe, Central and Eastern Europe, the Middle East, Africa and Asia), Citi rises to the top.
From an institutional client (ICG) perspective, the breadth and scale of Citi’s wholesale banking operations is best-in-class. The ICG unit is divided into a banking division on one end and a markets and a securities group on the other. Revenues in the $35 billion range were registered in 2017, which is 7 percent higher than the previous year. Morgan Stanley reported $37.5 billion and Goldman Sachs, a handful below, but Citi really shines when it comes to personalizing its business per region rather than providing a one-size-fits-all solution to clients across regions.
Bank of America and HSBC are high-flyers in this category, no doubt. But they are not flying as high at the moment as DBS. Mobile banking at the Singapore bank is leading the pack, and the bank made a concerted effort to get to this point. They started at the premise (with corroborating data) that a digital customer brings in twice the income. Stunning in a way, and couple that with (digital customer) higher loan and deposit balances, it is no wonder DBS chose to de-invest in brick and mortar strategies and throw their cards into the digital ring.
Since 2017, Bank of America has also been moving in line with DBS and notably integrated its now widely used peer-to-peer payment feature, Zelle, which allows users to send and receive payments at astronomically low prices. They also launched 8,500+ contactless ATMs, where card holders can engage in transactions using mobile wallet options (Android Pay, Samsung Pay, Apple Pay, etc.). HSBC has not been far behind, capitalizing on their highly popular virtual assistant, “Ask Amy.” A chatbot, Amy is able to provide timely information 24/7, on nearly any inquiry. An embedded customer feedback mechanism allows for the bot to keep learning and enriching her knowledge, which grows by the day.
With this said, DBS is still ahead of its competitors, with a market cap that was up 44 percent for 2017, and the bank is now considered more “tech” than a traditional banking sector investment. That’s a real sign of success!
A new category (over the past decade), sustainable finance, as defined by Frankfurt Main Finance, “integrates environmental, social or governance criteria into financial services.” Under a responsible sustainable finance model, capital expenditure and investment decisions take the previously mentioned criteria in mind before acting. Last year, the lauded finance publication, Euromoney, awarded BNP Paribas with the “World’s Best Bank for Sustainable Finance” award, besting more than 1,500 contenders and being decided upon after nearly 100 interviews with leading bank CEOs worldwide.
A handful of years ago, BNP Paribas CEO, Jean-Laurent Bonnafe aligned the bank’s strategies with the United Nation’s 17 Sustainable Development Goals. Roughly 135 billion euros have been devoted to energy transition and reaching said goals, and BNP Paribas is now part of the “Breakthrough Energy Coalition” that lends its support to the active promotion and advancement of clean-energy solutions.
Another notable global bank player in this sphere is Nordea, a Nordic financial services group based out of Helsinki, Finland. With total equity of approximately 32.4 billion euros, the bank has capitalized on its multi-cultural history (formed via mergers and acquisitions of Finish, Danish, Norwegian and Swedish banks) to now compete head-to-head on sustainability issues with the likes of BNP Paribas. Strong performance results generated from clean financing activities (green bonds, green loans, etc.) have propelled Nordea to now begin to offer green mortgages.
Diversity and Inclusion
Brian Moynihan has been rightly lauded as an exceptional CEO, but his work with diversity (which began 10 years ago when he became chair of the Bank of America Global Diversity & Inclusion Council) is where many feel he really made his mark. The company’s diversity numbers are on an upward trajectory where roughly 40 percent of the global management team and 30 percent of board directors are women. At a workforce level, there are more women now than men working at the bank.
A key issue with Bank of America executives was retaining women during motherhood, and the London office most notably includes a maternity room that new mothers can access while on the job. Small changes like this transform the bank from talking inclusion to “doing” inclusion.
In Mexico, Scotiabank has been recognized by its peers as adopting one of the most progressive LGBT laws in the world. The bank services and employs a disproportionate number of LGBT customers and employees and is re-writing employment law from a policy and internal procedure perspective.
It is exceptional to witness the growth in these areas, digital banking and diversity and inclusion especially. Watch for global banking leaders to continue to emerge from unlikely places and for the industry to become much more diversified. This will be a win-win for customers worldwide.