Despite being one of the fastest growing parts of the financial services sector, private banking is in danger of being a victim of its own s...

Despite being one of the fastest growing parts of the financial services sector, private banking is in danger of being a victim of its own success, said a recent report in The Economist. The UK weekly newspaper said that there is a growing possibility of too many banks moving into the sector, causing profits to fall. “As banks scent fat, stable profits, more will move into the business. By definition, however, private banking is not a mass market and margins could shrink,” said the report. The article also warned of greater competition from emerging wealth management centres such as Dubai and Singapore, which are chipping away at fees. But The Economist added: “On the other hand, the growth of the industry — and the impression that it is becoming more a game of financial sophistication than secrecy — is making it more respectable. As long as the rich get richer, the best private banks will too.”