English in Banking blog
Accelerating consolidation dynamic among Swiss External Asset Managers amid regulatory and profitability challenges ahead
With approximately 2,500 External Asset Managers (EAMs) and Trustees managing between CHF475-600bn of AuM, Switzerland is one of the most active and fragmented wealth management centres globally. The sector finds itself at the crossroads of a multitude of national and international trends. Industry players are struggling to grow organically via the recruitment of senior Relationship Managers (RMs) able to attract sufficient client assets. Meanwhile revenue margins are decreasing, weighing on the industry at large. Clients’ demand for alpha generation, notably through differentiated and sustainable offerings, and implementation of the Financial Institutions Act (FINIG) are further challenges to EAMs’ profitability. In some cases the new regulatory approval process has discouraged EAMs from filing an application.
As a result there has been a notable increase in the number of M&A transactions in Switzerland over the past 18 months, and in particular since the beginning of 2022. Consolidation in the industry is picking up speed.
The answer is likely to be on a scale from “it was ok” to “I don’t remember”. And perhaps you don’t expect more – after all, it’s content from a bank and not The Economist, right?
This should be a wake-up call for banks, as our latest study reveals that more than 70% of all prospects and clients look for banking products & services information online before making a purchase decision.
Based on our experience planning and implementing various content creation and distribution initiatives for banks, we believe that talking about financial topics in simple terms and educating investors is key. Banks should aim to compete with top content creators and news outlets.
This blogpost is the third in our five-part series on “Five strategic imperatives for marketing and sales executives in banking”.
In 2018, Deloitte Switzerland established a Risk Executive Network (REN) for CROs in leading Swiss banks, to exchange views about risk-related priorities within the financial services industry. The REN consists of 35+ CROs and holds four sessions each year.
In March 2022, Deloitte Switzerland carried out a survey to identify the strategic priorities of CROs. The survey focused on priorities in digitalisation, risk management, regulations, and strategy/governance. There are priority issues for CROs in all four areas, but we observe a strong trend in their concerns towards digitalisation in risk management and corporate governance issues in this year’s assessment.
Wealth Management is changing dramatically. The first post of this series has demonstrated how revenue growth is enabled by modern platforms. The second will take into account the perspective of a changing client base, and it will discuss how to deliver the right customer experience to these clients through a modern platform.
Join our Wealth Management 4.0 webinar: How digital, social, and economic trends will transform the investment industry
Digital technologies are impacting the future of wealth management across many aspects. 40% of wealth management clients say digital access has greater importance in their decision making, according to Wealth and Asset Management 4.0, a recent paper by ESI Thoughtlab and Deloitte.
Three-quarters of firms surveyed believe that investors' primary engagement channel will be digital within the next two years. How can firms adapt to these consumer changes for growth?
Please join us on 4 April (Monday 4 April 2022 - 16:00 CEST - 17:00 CEST) for a virtual 45-minute panel discussion, where we will hear from industry leaders what they think the wealth management sector will look like in the future. Lou Celi, CEO, ThoughtLab, will present the key findings of the Wealth and Asset Management 4.0 report.
The investment & wealth management industry is going through a monumental digital shift. Before 2020, digitalisation had long been predicted, but both investors and firms were relatively slow to demand or implement change: meetings mainly took place in person, conference calls were made over the phone, and digital upgrades were put off.
Then, when the pandemic hit everything changed, creating the perfect storm to accelerate digitalisation. Adoption of digital technology became mandatory for wealth businesses to operate at all, posing new challenges and opportunities for wealth managers to navigate and take advantage of. Almost overnight, business models evolved, and client expectations rose. But now, clients find themselves ever more reliant on new technologies and are providers actively prioritising digital innovations as fee structures are once again questioned.
Deloitte's recent study in conjunction with ESI ThoughtLab – Wealth and Asset Management 4.0 – show that 40% of clients now say digital access has greater importance in decision making. And three-quarters of wealth firms believe that investors primary engagement channel will be digital within two years.
The pandemic has disrupted many parts of our lives, both domestically and commercially, but whilst the daily pace has slowed, many social and economic trends have accelerated. And for the investment community, it was a watershed moment.
Shifts that were only just in motion became commonplace overnight. Transforming the industry into one that was digital-first and socially-minded. Where investor expectations and ways of working were utterly upended. The full consequences are yet to be realised, but the next three years will be pivotal as some firms capitalise and others stumble.
In order to help wealth management firms understand what these profound shifts mean, Deloitte teamed up with ESI ThoughtLab and others to conduct a pioneering thought leadership research program, Wealth and Asset Management 4.0.
The pandemic has permanently changed the way banks interact with their clients. While the use of digital banking channels has experienced a sharp increase, personal touchpoints have been rare or non-existent (see our latest banking study). The drop in face-to-face interaction poses a serious challenge to the Swiss banking sector, where well-established personal relationships with clients are often crucial for selling products & services. In this new digital era, the challenge for Swiss banks is two-fold; how can the digital experience of clients be elevated, while at the same time personal relationships be maintained?
This blogpost is the second in our five-part series on “Five strategic imperatives for marketing executives in banking”.
In this post, we outline how Swiss banks can sustain and even deepen their client personal relationships through digital channels and provide their clients with a unique and memorable customer experience.
Strategic relevance of client onboarding
We believe that a fast and convenient client onboarding process can be a competitive advantage for financial institutions.
Prospective clients obtain their first impression of providers from onboarding, and this can be a major differentiator when comparing and choosing between them. Clearly defined and consistently implemented onboarding standards are also key for managing the bank’s risk appetite and for complying with regulatory expectations.