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In this article we explore nine strategic priorities for private banks in the EU

Recent research shows that the ever-changing economic landscape created by Covid-19 has elicited the need for private banks to be strategic, in order to engage and retain their customers. We’ve analysed the nine factors highlighted in the report, to illustrate how private banks are expected to evolve and adapt in a reset world

1. Create next-generation omni-channel client services

Covid-19 has highlighted the poor omni-channel services offered by private banks. Now that the pandemic is leading to a dramatic increase in clients demanding a seamlessly digitalised experience, we can expect to see a rapid evolution of client service models. New initiatives in the consumer journey are predicted to include integrated mobile touchpoints with anytime-anywhere interaction, along with video feeds, webinars and chat, supported by the latest cybersecurity to enhance literal and perceived client safety.

2. Evolve advice & relationship management using technology

Private banks can benefit from evolving personalised and branded content, taking inspiration from other consumer sectors which have harnessed the power of social media and branded platforms. Creating bespoke content based on demographics and behaviours (e.g. millennials, female) may be highly effective, along with personalised content that may range from investment advice, to wealth mapping, health, wellness, interior design and virtual VIP experiences. Digital tools for clients will also enhance the experience, such as wealth calculators, goal-tracking, graphics mobile analytics apps, and easy access to ESG investment options.

 3. Accelerate innovation speed

The Covid crisis has seen financial companies enhancing the speed of digital journeys and making services work with an emphasis on minimal viable product. This sense of urgency can be maintained in the reset world, to accelerate the speed of product and service innovation. Ideally, creating new products and journeys from base zero, which will create an enhanced consumer experience and business traction – versus the redesign of existing products and services. True innovation will lead the way.

 4. Recreate the Relationship Management paradigm

Private banks will benefit from becoming smart with their front-office set-up and embracing remote client interaction and digitalisation. In addition to relocating RM’s to fewer branches, banks should consider remote RM’s with enhanced tech support (e.g. video conferencing, screen sharing) to digitise the front-office. When it comes to economics, tracking digital RM performance and offering incentives, will help optimise ROI and reduce recruitment volume. Recruiting RM’s to target specific demographic and socioeconomic groups will also maximise business performance.

Private Banks

 

5. Ground zero central functions

Successful private banks in the post-Covid world are likely to be those who explicitly streamline their in-house processes, to optimize central functions. Fundamentally, implementing automation across all processes is key, meaning the auditing of which products are essential, in-house. Similarly, identifying which services can be outsourced is also likely to prove economic. Successfully implemented, this radical approach will provide leverage for private banks to thrive and succeed in a transformed world.

6. Flexible & enhanced work culture

Making ‘organisational agility’ a key part of banking culture could pay handsome dividends in the post-Covid economy. By being more flexible when it comes to processes and evolution, private banks can reduce the time to develop and launch new concepts, increase productivity, and create an environment that enhances employee motivation and decision making. Companies in a reset world, need to be able to renew, adapt, change rapidly – and embrace turbulent circumstances, which may witness pandemics, new regulations, fast-changing tech, and new consumer expectations.

7. Make business decisions with purpose                                                                      

2020 has witnessed not only a viral pandemic, but also powerful social unrest on a global scale, and that has never been seen before in terms of mass awareness. The impact for banks, as custodians of wealth, is a need to consider their own brand messages and internal culture to meet new levels of social expectations. Banks can harness global awareness, to create a brand message, products, and services, that demonstrate authentic social responsiveness – something that is likely to significantly enhance business performance and longevity.

8. Create holistic value for clients                                                       

The creation of holistic banking services (e.g.  total wealth management, investments, lending, insurance, lifecycles, tools) with seamless interaction, will give private banks a distinct advantage in a reset world. Seamless systems that reduce client data harvesting and processing time are likely to prove a very effective business model. Banks may therefore benefit from acquisitions or partnerships, in addition to removing processes and products that do not offer client value.

9. Infuse products & services with purpose                                                      

Implementing a new focus on ESG (Environmental, Social, and Governance) products and services, could be lucrative for banks when it comes to long-term client attraction and retention – with the concept particularly relevant to the emerging millennials client sector. Banks can embrace ESG by using sustainable processes, in addition to offering investment products that support sustainability and positive societal impact. This is a great opportunity to grasp, since data suggests that under 20% of private banks consider EGS to be a key aspect for success.

The 2020 economy, and the world itself, is in a volatile position, but by understanding the key strategic priorities, it’s a world of new opportunity for private banks in the EU.