Not many bankers begin their careers with a lengthy stint in the disciplined services, but Derrick Tan did just that and believes the lessons learned during his five years with Singapore’s police force were a major factor in his later success.
“I was brought up to serve the country and those years gave me a lot of discipline and responsibility,” says the Hong Kong branch chief executive for Bank of Singapore, who is also global market head for Greater China and North Asia. “For instance, in the police, 8am means 8am, and when I went into banking I found that outlook and experience really helped.”
Now, with close to 20 years in the sector, Tan’s role is complex yet clearly defined. Essentially, his task is to expand the bank’s footprint and build its portfolio by helping high-net-worth individuals with wealth planning, management and preservation.
That requires specific strategies for different areas of China and can involve totally different conversations with first- and second- generation investors and entrepreneurs. In some cases, the priority is to protect assets and pass them on efficiently to children or nominated successors. In others, the focus is more on finding offshore investment opportunities and interesting fund choices, which will generate good long-term returns.
“In the last 10 years, the explosion of growth meant a lot of wealth was created in China, and that now has to be managed,” says Tan, noting the mainland now has an estimated 2.3 million high-net-worth investors. “So far, all the banks in Hong Kong and Singapore may have scraped together 10,000 to 20,000 clients, so there are still a lot to contact. Also, over the last decade, in the mainland’s finance industry, an acceptable rate of return was double-digit, so investors would rather keep their money in China. Now, though, they are looking for diversification, and expectations for returns are not as high, which creates new opportunities from an offshore perspective.”
In this respect, Tan believes the bank’s name provides an inbuilt advantage since, for many prospective clients. Singapore represents transparency and fairness.
“That means we don’t have to do much work on branding,” he says. “But, as CEO, I do have to work with the regulators to ensure the whole process of interacting with clients meets with HKMA expectations. It takes time because of all the changes within the regulatory framework, but I feel it is important to contribute to the industry in this way and to be at the forefront, as any change in regulations does have an impact.”
The sense of duty this implies is a clear reminder of Tan’s early ambitions and his guiding principles. From a young age, he wanted to serve as a police officer and, after the mandatory nine months at the training academy, where he learned - among much else - to handle an M16 rifle and revolvers, he was subsequently assigned to the commercial crime unit as an investigation officer.
“I was influenced initially by my friend’s father, who was a superintendent in the force. In fact, much of my upbringing was with their family,” Tan says. “My own dad came from quite a well-to-do family. He collected rents, liked drinking and wasn’t home most of the time. My mum left when I was very young, but I was very fortunate at school, did well in mathematics, worked hard, and got A’s for everything.”
Looking for a different challenge in the mid-1990s, Tan won a full international scholarship to study banking and finance at Curtin University of Technology in Perth, going on to graduate with distinction. And, impressed by the fancy car and house owned by a young banker friend, the next move then came into focus.
“To be honest, I didn’t have big ideas of running a bank or aspirations to change the finance industry. I just thought if I could earn S$5,000 a month, I would feel like the richest man in the world. So, back in Singapore, I sent out tons of resumes and, in 2000, joined HSBC in a very junior position.”
His plan was to jump straight into wealth management, rather than commercial or retail banking, seeing that as the fastest route to a better income.
“It may seem shallow, but after studying in Australia I only had S$2,000 in my bank account, so income was an important factor. I was a young man just trying to survive, so I worked hard, was always first into the office and, in the first year, earned more than S$100,000.”
He rose quickly to senior vice president before accepting in 2005 an offer from UBS, then seen as the best in the business, to handle the Indonesian market. Success there brought an invitation to join Bank of Singapore in 2010 to help create a new Asian private bank. And, after a transfer to Dubai, which at the time had just a small representative office, he really made his name by restructuring the team, expanding the client base, tripling the size of the business in just three years, and becoming the bank’s global head for the Middle East and the Indian subcontinent.
Based in Hong Kong since early this year, he understandably sees the Greater China market as offering almost infinite opportunity. The plans, therefore, include a steady increase in headcount, with a particular eye to attracting candidates from the top universities in China, accelerated training programmes, and developing a culture that encourages individual responsibility.
“This is a huge business, so I have to put the right people in place and then trust and empower them,” says Tan, who hopes one day to run a non-profit or charity. “Up to a certain threshold, they must be able to make decisions without my involvement. We also need to improve efficiency by creating a thinking culture, where you feel the energy and everyone can keep learning to enrich their lives.”
