Posted on 25. June 2014 · Posted in Internet @en, Social Media/Business @en Autor  Christopher Schmidt

Missing trust, image concerns and the ongoing digitalization of the value chain are only three issues, which impact the financial industry. Poor investment performance could lead to a loss of assets under management and revenue reduction (example: since 2008 the interest rates in retail banking decreased nearly 0.3%).

The personal contact between client and relationship manager is still a key element in private banking. But is such personal interaction reason enough for additionally charged costs? Clients ask themself the following questions:

  • Why should I pay more for the service at bank A compared to bank B?
  • Provides bank A a better service than bank B?
  • Which are the differentiation criteria’s between bank A and bank B?

All these questions require clear actions for financial institutions to retain clients. With this blog series we are discussing potential solutions and options to improve client relation and client retention. How the service and product portfolio can be improved, extended and to fulfill client expectations and needs. As option one for the private banking sector we see the set-up of an internal virtual market place, which brings different clients with different needs together, certainly with written pre-approval only by all involved parties, all data anonymized to assure legal regulations and keep (Swiss) bank secrecy. The involvement of all relationship managers is a key criteria as they own the client contact and client relation, plus they should be fully aware of their client needs, what they expect, what they are looking for and which the main pain points are, as:

  • Clients is looking for a solution for his succession planning
  • Merger and acquisition to extend business activity
  • Adjustment of the real estate portfolio

All these questions should be part of any relationship manager visit. This is exactly the case where the virtual market place comes into action. All this hidden data, only visible for the relationship manager, becomes part of a virtual market place. All information will be offered to and shared between all relationship managers internally. All client needs can be added anonymously with some basic information to get a first idea about what a specific client is looking for. Relationship managers can share these offerings with their client base in personal meetings. All inline with legal regulations and requirements. Surprise your client with a new service that is only accessible for clients of this specific financial institution, make it exclusive. One advantage of such a virtual market place is to unhide all such information and make it accessible for a wider audience. Avoid the possibility that a client sells or buys outside your bank, which in worst case could result in a complete loss of the assets under management. Additional advantages of a virtual market place:

  • For clients:
    • Access to a wider network to interact with other clients of the same financial institution
    • Access to direct investments (which is more often required in the UHNWI client segment)
    • Additional alternative investment options
  • For relationship managers:
    • Extension of the service portfolio
    • Improve client relation and client satisfaction by a pro-active advisory process to discuss new topics and new investment opportunities
    • Improvement of the advisory quality
    • Share hidden client information and get access to such information from other clients
    • Bring together selling and buying side quicker
  • For financial institution:
    • Consolidated overview of all investment opportunities
    • Additional tool to optimize the overall advisory process
    • Keep assets under management in house
    • Options to gather net new assets
    • Improve internal collaboration and options to acquire new clients

Schmidt Consulting implemented a virtual market place for a major Swiss bank (details in German only). For further information please contact us to find out how this could work for your business, independently if you are from the financial industry or any other industry. The basic concept is industry neutral and helps all who struggle with hidden information and missing internal collaboration.