Private banking income in Russia has surged by 88% in 2007, according to a survey of almost 400 private banking and wealth management institutions by Euromoney magazine. Despite the growth of the sector, there are challenges still to overcome.

Aleksand Kochubey, Managing Director of Renaissance Capital Investment, says private banking is not yet developed, and as yet there’s no agreement on what should be called private banking.

“First we have private banking as a concept for high-end retail banking. Then there’s private banking as a concept for high net-worth individuals, and then there’s private banking as a cover for wealth management and exclusive type of services,” he explained.

The professional level of wealth management in the country is still far from western standards.

There are not enough candidates to fill the glut of job openings in the sector, and the lack of good quality recruiting and educational programmes are affecting the industry.

Currently, only a few banks offer private banking services and most of them are foreign companies.

However, experts say that as the growth of the economy continues, the market will significantly change, bringing fierce competition between the growing domestic players and international banks.