The study also revealed that many private banks are alarmingly neglectful of one of the juiciest wealth segments: clients with between $500,000 and $1 million, BCG Switzerland Chairman Matthias Naumann said.
Mid-sized and even larger private banks are no longer capable of taking care of these clients due to tighter regulation, tougher compliance rules, and the steady march of digitization in the industry, BCG said. Instead, these clients – which have traditionally formed the backbone for Switzerland's finance industry – are being handled with standardized and indistinguishable solutions.
Under The Radar
Abandoning personalized service in favor of a same-same approach means private banks aren't spotting potential big clients – affluent or entrepreneurs – early enough, and will miss out later. The wealthy usually have their funds distributed across several banks, so they can't instantly be identified as a «key» client or big fish at any one of them.
As a result, cantonal banks in particular have won considerable funds off larger banks in wealth management – apparently the regional lenders are more adept at listening to their clients' needs.
This move to smaller, regional banks is set to accentuate given the overarching wealth trends – digitization, squeezed margins, regulation, new market entrants – if large banks don't master the so-called high net worth segment, or those with more than $1 million. How? Better processing and evaluation of client data through advanced analytics, which is commonplace in other industries such as retail and consumer goods, according to BCG (see graphic below).
Fresh Money
The ideal scenario is banks can not only spot the «top» clients early, but also tailor and customize their offering to better suit the segment. BCG estimates that inheritances, company sales, and pension windfalls will wash more than $560 million into Swiss banks in the coming five years (see graphic above). The question is, are the private banks ready before their wealth hub rivals can grab market share?
- << Back
- Page 2 of 2
