Today, private banking bears little resemblance to its earlier business model. But it is not yet clear where exactly the industry is headed, Michael Welti writes in his essay for finews.first.
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«Disrupt yourself» was the clarion call of German author Christoph Keese. In his book of the same name, he recommends that almost everyone should give their thoughts and actions a complete overhaul.
He urges us to recognise and utilise our personal strengths to radically reinvent ourselves. He highlights something that has been true for some time: the world is undergoing transformation.
«There are seven factors that will enable the private banker of the future»
This means focusing on pattern recognition and stimulus-response patterns (susceptible to automation) or empathy and social interaction (less susceptible to automation). Digital development must be viewed in this context, as it enables even more efficient dialogue with clients and helps businesses lower costs and use artificial intelligence to improve decision-making.
Nevertheless, technology is no substitute for interpersonal relationships, which are fundamental in building mutual trust. With this in mind, there are seven factors that will enable the private banker of the future – Private Banker 4.0 – to succeed:
1. Experience and Seniority
The client must be able to rely on the fact that their advisor understands every aspect of banking, looks beyond traditional models, can provide a 360° overview and draws on a wealth of experience when advising on complex financial situations, succession planning and structuring individual private wealth and corporate finance requirements.
2. Integrity – A Happy Client Means a Happy Bank
As an advisor’s experience grows, so does their ability to shed light on complex family circumstances and financial situations. It is becoming increasingly important for advisors to act as a partner to their clients and not just as a representative of their bank.
The client satisfaction generated by providing the service expected of a Swiss bank pays off for both the bank and the banking industry as a whole in the long term.
3. Training
Previously, a commercial apprenticeship or university degree in banking was enough to keep an advisor’s head above water until retirement. Today, however, banks offer various continuing education courses both internally and externally to ensure that their clients receive comprehensive and legally-compliant advice.
The fact that advisors are now required to meet a much wider range of requirements means they now have a significant vested interest in tackling new issues that may not have been relevant a few years ago.
4. Market Knowledge and Skills
Advisors are often supported by large specialist teams within their bank. However, in order to offer their clients the ideal investment solution, it is essential that the modern advisor has a keen interest in the investment markets and an overview of the current market situation.
A client can tell whether or not their banker is keeping abreast of the latest market developments.
5. Digital and Social Media Fitness
We all remember the days when advisors met their clients in person at their offices whenever they visited Switzerland. Today, advisors can stay connected to their clients and demonstrate their continuous availability via various channels. Informal communication, which can include anything from messenger services to social media platforms, gives both parties the opportunity to exchange views and form opinions on the latest issues immediately and in real time – even outside office hours.
Our smartphones will probably replace traditional bank branches, if not now then almost certainly in the generation of millennials and digital natives.
6. Individuality and Empathy
Listening skills are as important in business as they are in personal relationships. All too often, banks only expect their advisors to recommend their own products.
Despite this, there is an art to asking the right questions and identifying a client’s needs. Clients deserve a friend and partner in their financial matters who not only promotes banking products but also fosters long-term relationships.
7. Entrepreneurial Spirit
The Private Banker 4.0 must use their entrepreneurial ability and creativity. Senior advisors must see the bigger picture in their client and banking relationships while remaining in sync with their bank's strategy.
It is tremendously important for banks to adapt to either large volumes with a standardised offering or the individual requirements of UHNWIs.
«This transformation is never complete and requires constant adaptation»
There is nothing wrong with standardising offerings as many providers do. By doing this, banks must accept that they will not fully address the needs of their clients. At the same time, this gives competing banks the opportunity to take an entrepreneurial approach and present clients with innovative and lucrative solutions that enable them to stand out from the crowd.
It is for these reasons that Switzerland still enjoys an excellent reputation as the world’s largest centre for first-class international wealth management – a reputation it has defended and enhanced over several decades.
This transformation is never complete and requires constant adaptation. The biggest beneficiary of this process is the client, who profits from the excellent reputation and tradition of Swiss banking.
Michael Welti is Head Zurich and Managing Director – Wealth Management at Reyl & Cie.
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