By all indications, almost all sectors of the economy are bound to suffer a significant blow during the current pandemic. Before the pandemic, many private banks that handle the finances of affluent customers were merely struggling to stay afloat. Positioned between large international banks and startup local financial institutions, private banks have always experienced difficulties in attracting customers to themselves.
However, with the onset of the virus, the wealth management sector will likely experience a significant shift in its operations. Those that have strategically planned how to best take advantage of this period will emerge victorious. While others that continue to operate with increased costs and diminishing margins may be taken out of business.
Here are some lessons wealth managers can glean from the current COVID-19 crisis:
Clients’ Data is as Important as the Clients Themselves
Wealth managers who fail to harness the power of data may suffer losses in this period. Gone are the days when client data is obtained haphazardly and without any regard to privacy. The way things look, private banks may need to be more thoughtful in getting and utilizing their clients’ data if they are going to work effectively.
Education Never Ends
Even when the Covid-19 pandemic is over, work and life, in general, may not remain as they were. Bankers and employers may need to get engaged in continuous education across several disciplines to stay relevant. And wealth management firms that will also remain relevant would have to learn to integrate ongoing learning experiences into their operative business models.
Adjustments in wealth management priorities will also spell a need for a change in investment models. Future clients (who have experienced the devastating economic impacts of the pandemic) would definitely lose interest in conventional investment models.
Priorities and Values Will Shift
A lot of businesses and industries may have to readjust their values after this pandemic. The upcoming generation may also come to appreciate values like modesty, transparency, and sustainability. For wealth managers, this priority shift may focus on providing their clients with real solutions to their needs – not void marketing promises. And those who fail to implement relevant changes in their values may not get the best of clients afterward.
Conventional Will Give Way to Innovation
Adjustments in wealth management priorities will also spell a need for a change in investment models. Future clients (who have experienced the devastating economic impacts of the pandemic) would definitely lose interest in conventional investment models. They would begin to seek platforms that allow them to invest in thematic ventures rather than complex financial commodities. In essence, Private Banks may also need to look to more persuasive and thorough investment models after the pandemic.
Operational Resilience is Key
Perhaps one of the most important lessons this present crisis has taught us is that resilience, in all aspects of our lives, is a key ingredient to thrive in this environment. Similar to how sophisticated systems and products are being subjected to thorough stress-testing, business operations of private banks must also live up to the challenges ahead of it. The bank’s leadership must put in place effective stop-gap measures to deal with immediate concerns, then move to a more sustainable operational models absent any conventional tools and support to make sure business will survive- and thrive – in times of prolonged difficulties.