Upholding the level of excellence in the service offered to customers remains the major challenge facing private banking institutions. The goal remains to support customers over time to help them make the best decisions at all times. This aim has not changed, but the private banking business is undergoing a gradual process of adaptation to an environment of greater complexity, narrower margins and increased investment to accommodate new technological and regulatory requirements. On top of this, we have the need to respond to the expectations of increasingly informed customers who have access to an ever broader offer.
Private banking is not, neither traditionally nor structurally, a business that is very open to change, so this need to adapt must find the best allies in management positions to work on the search for differential value for the customer.
In the case of the necessary technological progress, it implies an added effort, both in terms of budget and talent. In a sector such as private banking, offering tailored solutions is an imperative, and technology increasingly plays a key role.
As managers, we are obliged to understand the need to use technology as a necessary lever to complement the work and experience of professionals. Private banking institutions cannot fall behind when it comes to harnessing the use of Big Data, which grants access to huge volumes of information for segmenting customers, or artificial intelligence, which beyond the scope it may have, undoubtedly allows us to offer personalised financial advice on a large scale. While the role of the professional will remain a priority in delivering value, machine learning algorithms can solve the problem of low value-added activities through automation.
With regard to regulatory compliance, this is certainly one of the operational challenges facing the sector, from the point of view of increased costs. We must respond to regulatory developments without eroding the profitability of the business. This reality is forcing private banking institutions to rely on specific tools and profiles to understand and minimise the impact of all these new requirements.
One of the key factors in responding to all these challenges is to have multidisciplinary teams, with proven experience and a high degree of specialisation in different fields. Professionals who know the business and the client, but who also have personal skills, capable of empathising with customers to generate a relationship of real trust. It is also necessary for institutions to be able to integrate young talent alongside tenured professional profiles, as a way to connect with new private banking customers, a consequence of the necessary generational changeover that high net worth and family businesses are facing. Managers must also make an effort to support these new profiles in acquiring this knowledge and experience. It is a matter of adapting the structures of the institutions, which are sometimes rather rigid, to understand new behavioural trends and changes in society, which affect forms of interaction, choosing an investment style or even understanding the risk-return trade-off with which an investor feels most comfortable.
In recent years, private banking has taken a step up the ladder towards a new paradigm where higher business volume brings with it an improvement in customer service quality standards.
The future of the business will ultimately depend on maintaining a true vocation for customer service, which, alongside experience, specialisation, innovation and the ability to adapt to the environment, will continue to be elements fundamental to consolidate the professionalisation of the industry. And in this calm but progressive change, the whole team is involved and committed, but it is the managers, as the visible faces of the banks, both externally and internally, who must lead the way. We have the responsibility to transform and adapt our organisations to the new times.
Citywire 03.06.2024