In the Swiss private banking sector, many within the industry believe that life post-Covid-19 will not be too dissimilar to life as it was before. At Indigita, we decided to test this theory by conducting a simple survey to better understand how the professionals on the ground really feel about the future of client relationships in private banking.
Our survey results suggest that we have to adapt to a new reality that will be much different from the past but which could still bring opportunities of its own.
Client Relationships Significantly Hindered
The Indigita survey found overwhelmingly that the general sentiment around client relationships has suffered negatively because of the Coronavirus. Close to 95% of those surveyed answered that their working relationships with clients have been significantly hindered, with the remaining 5% claiming that relationships have been negatively affected but not in a significant way.
The result is not surprising, but the bigger issue is how this current situation can be resolved positively when client relationships are a core element of the business process.
If things were to revert to form, one remedy to this solution would be for private banking professionals to resume the business travelling and in-person meetings that so characterised the forming and maintaining of relationships in the past. However, the responses to our second question suggest that reverting to the old way of working may no longer be feasible for many of those questioned.
While 47% of those surveyed stated that they have already resumed travelling and meeting clients for business, this has not been the case for over 50% of those questioned.
26% of people believe that traveling to meet clients could return in the next six months, but more than a quarter of those questioned believe this is a scenario that will not be possible even within the next 9 months.
Clearly there is a division of opinion within the industry on exactly how things will work in the future. Something that is perfectly understandable given the great turmoil and uncertainty that everybody has lived through over the course of the last 18 months or so. What is certain is that things have changed fundamentally and new solutions need to be found.
A New Reality for Business Travel
The stubborn refusal of Covid-19 to disappear is only part of the reason why people in all spheres of life are reluctant or simply unable to return to work the way it used to be. Stay-at-home orders have made many individuals and organisations realise that remote working can be almost as effective as office-based.
And aside from changing the way we work, Covid forced many people to reevaluate their whole lives and their role in the well-being of the planet. As part of this reckoning, there has been a broader appreciation of just how unnecessary much business travel often is.
A recent Deloitte Insights article on the changing face of work post-Covid revealed that reducing international or long-distance travel will be one of the key approaches as businesses look to hit sustainability targets.
Compliance Indifferent to Covid
The way the world works has changed, but the regulatory compliance landscape for those within the private banking sector remains equally stringent. A potential problem when looking to adapt to this new landscape where more meetings happen online is that those involved may believe that the same rules do not apply as they did before. This misthinking could prove costly as cross-border checks are equally essential regardless of whether the meetings taking place are online or in person.
While Covid has negatively impacted relationship building, paradoxically, it also appears to have increased communication. A recent study from SmartAsset found that 41% of financial advisors questioned reported communicating more frequently with clients during the pandemic.
There would seem to be a disconnect between the results from our survey on hindered relationships and the apparent increase in remote communication, but this in itself shows how this new way of working brings new opportunities to the industry.
Two of the industries that have thrived the most in the last 18 months have been fintech and e-commerce, in which companies often function as fully digitalised entities. The pandemic significantly accelerated the shift to a digital-first consumer model that perfectly syncs with new generations who have been brought up online and demand multi-channel touchpoints and seamless service at every interaction.
Of course, in private banking, where the demographic skewers older, in-person communication will remain essential, but even the older generations are learning to master new mediums as a result of the disruption of the last 18 months.
In compliance, the opportunities to leverage technology have never been greater, and at the same time, the regulations that must be followed have never been more complex. The ability to use greater technological potential to meet the incredibly complex regulatory compliance standards of the day means that financial services providers are now faced with a unique opportunity to turn the shift in working norms into a push towards a world where private banks lean much more heavily on the digital compliance solutions that are now available to them.
The pandemic caused pain and levels of disruption that we could have never imagined 18 months ago, but times of great tumult are also ones of opportunity.
While at the outset it may appear as though the traditional way of building relationships in the private banking world has been hindered, the real truth may be that it has afforded financial institutions an opportunity to develop new and better ways of working with clients who are now more readily available across a variety of channels.
Regardless of how and where business is conducted, regulatory compliance can never be compromised. The culture of client relationships has undoubtedly changed, but the private banking sector now has standalone mobile solutions that deliver all of the essential tools that are more than capable of providing flawless, digital-first compliant solutions regardless of the sphere in which communication takes place with clients domiciled abroad.