Soon after the financial crisis that turned the global economy in shambles in 2008, regulators came up with policies to avoid a more disastrous re occurrence. And they weren’t off point when they stipulated that banks should beef up capital and fortify their liquidity against the impacts of any future financial crises.
Furthermore, regulators had to put each bank through a yearly assessment to ascertain whether they were equipped enough to scale through the worsts of economic meltdowns. Based on studies, a very sharp global GDP decline of up to 7% would’ve already been pretty bad. At the time, bankers and regulators thought it was the worst the world could ever experience.
However, with the occurrence of the coronavirus pandemic, coupled with governments’ reactions to its damaging effects, many economies are on the verge of a total shutdown. And the projected decline of global GDP may even be worse than earlier projections. As the situation is still very fluid, no one can even tell when will the worst be over. This now warrants a re-examination of the fate of the private banking sector.
Here are the 3 things private banks can learn from this period of the pandemic:
The projected decline of global GDP may even be worse than earlier projections. As the situation is still very fluid, no one can even tell when will the worst be over. This now warrants a re-examination of the fate of the private banking sector.
1. Digital Interactions are Worth It
Before the pandemic, only a few wealth managers could boast of harnessing digital platforms to interact with their clients. However, as the pandemic lingers, many wealth owners have resorted to digital platforms for communication with their wealth managers. And given that digital platforms are more convenient and efficient than physical ones, digital means of wealth management may remain relevant even after the pandemic. Wealth managers who are unable to implement digital strategies may fall into the losing team.
2. Crisis Prediction Must Take a Holistic Approach
No prediction could get close enough to guessing that the coronavirus pandemic would occur the way it did. In the same manner, it never occurred to financial experts that the virus would impact the global economy so severely. The world economy was caught unaware by the pandemic because new investment schemes were being carried out based on information obtained from individual commissions. Hence the pandemic simply points to the fact that future financial researches may have to be done from a more holistic point of view.
3. Working Remotely is a Win-Win
Wealth managers may need to incorporate remote offices into their work models if they intend to stay relevant. The pandemic has proven beyond any shadow of a doubt that it is possible to keep a business going from different homes. As a matter of fact, remote offices are more flexible, efficient, and cost-effective. And although a lot still has to be done to implement new business principles while working remotely, it is only a matter of time before it becomes prevalent.