A study by Gulland Padfield, the consultancy firm to the private banking and wealth management sector, concludes that significant internal barriers and practices continue to prevent the world’s leading Private Banks from delivering on their promise to put their clients’ interests ‘at the heart of their business’.
Are you looking to define your bank’s client strategy and compare it against others?
Are you a Client Service Director or Chief Client Officer interested to compare your approach to others?
Would you like to receive details about how to get a copy of the report and a complementary presentation of the implications for your firm from its author?
If so, start a conversation or request a free consultation on the report’s findings. Email or call James Edsberg at Gulland Padfield on contact@gullandpadfield.com or +44(0) 203 051 2295
Gulland Padfield’s study examines publically-available information from eleven of the world’s leading Private Banks including client-related statements made by their executive teams and aspects of leading banks’ client-facing activities in 2015 and the strategies they plan for 2016.
The banks featured in the analysis are UBS, Citi, Credit Suisse, Julius Baer, J.P. Morgan, Pictet, HSBC, BNP Paribas, RBC, Barclays and Merrill Lynch Bank of America. The report categorises the banks into three Tiers according to their progress towards institutional transformation around their HNW and UHNW clients.
Speaking about the report, James Edsberg, its author and a partner in Gulland Padfield’s banking team said, “We conducted this study to see what banks still had to do to succeed in their publically-stated aim to strengthen their ‘client focus’ and how far they have got in achieving that important goal. The conclusions are designed to be constructive both to those management teams who are taking steps to transform their business model around the client, and for Regulators who share the mission with banks to make the Private Banking sector truly client-centric.”
Gulland Padfield’s Report looks at 10 areas of client-facing activities by the major banks including their approach to client segmentation, the evolution their client proposition and developments in their product offering to clients, changes in the priority on clients in different geographic regions in Asia, Latin America, U.S. and Europe, brand positioning and market messages, client centric culture, client servicing frameworks, marketing mix and sales strategy.
All the insights are based on public and non-confidential information.
Together, Gulland Padfield offers a study of these elements as a comprehensive review of the ‘Client Strategy’ of a selection of leading Private Banks with implications and lessons for all advisory businesses in the Wealth Management and Private Client sector.
The report assesses the client focus of leading institutions in 3 Tiers: (i) Advanced (i.e. have largely achieved client focus at an institution-wide level and can claim to be differentiated in the market from other banks in that respect (ii) Transition (e.g. have publically launched a series of initiatives to strengthen client focus) and, (iii) Early Stage (e.g. have yet to announce or make significant changes to improve client focus). None of the leading banks analysed in the report achieved Tier 1 status. UBS, BNP Paribas and Citi lead the group with a series of bold initiatives placing them in Tier 2. The remaining private banks are rated currently as Tier 3.
James Edsberg commented, “While there is a significant amount of change inside and outside the institutions we looked at, based on the public evidence, we see a small number making a concerted effort to transform their businesses around a deeper alignment with the existing and prospective client needs. The rest are very much in the early stage of that transformation. And we have suggested why that is.”
The report identifies four aspects which appear to hold many major private banks back from achieving greater client focus and from driving growth and operation improvements that would follow as a consequence. These barriers to client-focused transformation are:
- The client data gap Many banks suffer from a weakness in the quality, depth and regularity of data and insights into the unmet needs and perceptions of HNW and UHNW clients of the standards of service the bank provides to them. Without this, a bank is obliged to rely on anecdotal or partial evidence about its clients and is poorly positioned to make the case internally for any change that is needed.
- The compliance dilemma Like all other financial institutions, private banks must satisfy compliance requirements while at the same time delivering a differentiated and high quality service experience to their clients. But, ironically, the implementation of many compliance processes by private banks often fails to take into account the negative impact on the client’s service experience which can be a consequence of tighter regulation. Resolving this dilemma inside banks, without compromising the need for regulatory compliance, is holding some back from improving client focus.
- Prioritising technology investment Decisions around what and when to upgrade a private bank’s technology platforms is also an area where the solutions are often not being built around an alignment to the bank’s business strategy nor its client strategy. The greater degree of client focus in designing and selecting the right digital aspects for a bank’s client service, the better the likely return on technology spend.
- Leadership on the issue of client focus To drive tangible and sustainable change needs consistent and vocal leadership at a senior level to all levels of the institution about the importance of client focus. Because of the often complex nature of client-orientated change, and the involvement of multiple internal stakeholders, banks need high quality talent and strong governance to achieve that change.
ABOUT THE REPORT
The Report comprises a summary of the main developments in the following areas of Client Strategy of the world’s leading Private Banks. Using Gulland Padfield’s definition of Client Strategy as a framework the report examines 10 components of aspects of a Bank’s client facing or client-related activities including aspects of strategy which directly or indirectly touch the client including:
- Client Segmentation Approach
- Client Service Promise
- Operational Capabilities including statements about major platform investments
- Product offering and Proposition evolution
- Reward, Remuneration and Cultural alignment of staff
- Brand and Market positioning and Marketing Mix
ABOUT GULLAND PADFIELD
Gulland Padfield is the multi award-winning specialist management consultancy that advises the management teams of Wealth Management firms and Private Banks.
The firm’s purpose is to advise banks and services firms on their Client & Customer Strategy and to help them become profoundly client-focused as institutions and to transform their operational performance, culture, growth and profitability as a consequence.
Over the last 14 years, Gulland Padfield’s teams and consultants have worked with 11 of the Top 20 private banks as well as other leading Banking groups, Wealth Management firms, Family Offices, Asset Management institutions and Services firms to provide guidance, practical support and pioneering ideas in the area of Client and Customer Strategies.
The firm delivers projects from its offices in New York, London and Bogota.
ABOUT THE REPORT’S AUTHOR: JAMES EDSBERG
James Edsberg is an advisor to the banking and services sectors on client and customer strategy. Known as an evangelist in his mission to support those wishing to transform the private banking industry around the client, he brings practical insights into the challenge of transforming institutions successfully.
In 2015, he was acknowledged by Wealth Briefing Magazine as having made an “outstanding thought leadership contribution’ to the European Wealth Management industry. His team has worked with many of the leading banking groups.
He is a regular speaker and panel guest at conferences in the U.S., the U.K. and in Latin America. James is also a contributor and guest on BBC News, BBC Radio 4 (Today programme), Radio 5Live (Wake-up to money), CNBC and Bloomberg
Are you looking to define your bank’s client strategy and compare it against others?
Are you a Client Service Director or Chief Client Officer interested to compare your approach to others?
Would you like to receive details about how to get a copy of the report and a complementary presentation of the implications for your firm from its author?
If so, start a conversation or request a free consultation on the report’s findings. Email or call James Edsberg at Gulland Padfield on contact@gullandpadfield.com or +44(0) 203 051 2295