M. Isi Eromosele

Private banking clients are high-value, high net worth individuals whose financial services needs go far beyond basic banking and investment products. Their requirements typically include protection and growth of assets, tax and retirement planning and generational transition of wealth.

Sustaining business from such clients is a huge challenge for financial institutions that provide private banking services. However, if done right, there is a good chance for a high payoff for the institutions. In order to secure high stake financial deals from these clients, private banks have to pay a high level of personalized attention to building deep relationships with them.

As a result of the volatility at the capital markets and negative developments in equity prices  and related asset classes due to the recent as well as ongoing global financial crisis, there have been steep declines in assets under management at private banks. Consequently, private banking clients have become increasingly cautious, having lost confidence in their financial advisors and wealth management services.

Today, private banks are now faced with clients who are demanding fast personalized service through multiple access channels at their convenience. Private banking customers have also diversified their banking relationships, allowing them to direct their assets to institutions that will provide them with the best financial advisory services in the market. Blind loyalty is now a thing of the past.

Unless customers are firmly assured that their private bank is proactively managing their wealth, is deeply committed to actualizing their investment objectives and can offer distinct value added services, they would bring an end to their relationship. As such, it is imperative that wealth management as well as private banking firms realign their business strategies to manage and develop long-term customer relationships, even as they adapt to the changing business environment and customer demands.

Private banks need to develop and implement the following customer relationship strategies:

• Focus on customer retention and work on regaining customer confidence, trust and loyalty
• Maintain client profitability by rebuilding asset bases while maintaining fee structures that are not viewed by the customers as onerous
• Provide highly customized services to customers with proactive and unbiased investment advice
• Improve marketing effectiveness by developing a holistic view of the customer with a great understanding of their financial goals and providing products and services will best meet their needs
• Develop lead generation capabilities to identify existing customers and segment out the most profitable customers for private banking services
• Adhere to stringent regulatory compliance requirements

Private banks need to implement wealth management/private banking solutions that offer a fusion of CRM, advisory, transaction management and portfolio management components. These solutions will enable an institution to create competitive advantage through service differentiation, elevate relationship management productivity and sustain customer relationships for the long-term. This would enable them to acquire, retain and expand customer relationships.

These institutions would need to acquire capabilities that would enable them to analyze customer information and obtain vital insight into customer intelligence. This would enable their relationship managers to:

• Determine more profitable customers and view customer information across Lines Of Business (LOB)
• Determine products and services that are the most profitable
• Determine segmentation strategy for the client base
• Identify cross-sell and up-sell opportunities

With increasing focus on providing client-centered services through well defined client segments, better understanding of client needs, individualized value propositions and a proactive effort in exceeding client expectations are the key imperatives to successful customer management by private banks.

M. Isi Eromosele is the President | Chief Executive Officer | Executive Creative Director of Oseme Group - Oseme Creative | Oseme Consulting | Oseme Finance

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