What triggered this change was of course first and foremost the tightening of laws and rules by national regulators, tax authorities and supranational bodies. Long gone are the days when a banker travelled around the world prospecting with a portfolio of several hundred clients without thinking about borders.
In less than a decade a flurry of new laws (EMIR, MiFID II, FATCA, AEOI, and FinSA to name a few) have made cross-border activities very complex. The requirement for relationship managers to know wads of rules like the back of their hands has obviously restricted their scope of action: how they interact with their clients and what sort of services or products they can provide depends on the client’s financial profile and jurisdiction of residence. As a result, they have sharpened their focus on specific geographical regions and smaller numbers of clients with the support of their Compliance colleagues who have become their closest allies.
Another catalyst has been the financial environment, as persistently low – and in some cases even negative – interest rates and renewed market volatility have greatly altered clients’ demands. They expect not only new ways of generating returns, but also transparency and strict risk management. In response banks have innovated and diversified, developing more complex investment solutions requiring higher technical abilities. Relationship managers have gradually had to acquire an orchestra conductor’s skills to be able to assess their clients’ needs, however specific, and direct them towards the appropriate specialists within the bank. Let’s not forget the added influence of responsible investing which, a niche market only a few years ago, has been gaining momentum and is now attracting more and more clients seeking solutions that combine financial returns with sustainability. This has prompted banks to rethink their offerings and their management processes, and created a whole new investment universe for relationship managers to become familiar with.
The last factor to have catapulted banking into a new era is the digital revolution, which has given rise to fierce competitors in the shape of “neobanks”, as well as a new generation of clients native to digital technology. In the early 2000s clients’ sole point of contact in their bank was their relationship manager, and only on the land line as security and confidentiality could not be guaranteed on mobile phones at the time.
Fast-forward to 2020 and you won’t find a single relationship manager who can operate without digital communication technology. These tools have been made all the more indispensable by the pandemic, leading cutting-edge banks to enhance their e-banking facilities with functionalities allowing relationship managers to communicate with their clients by videoconference and to handle their instructions securely. With today’s technology new clients can even be identified using a smartphone. In short, by providing automated processes, virtual documents and online access to data, digital technology has revolutionised relationships between bankers and their clients.
What makes this transition all the more irreversible is that clients themselves are driving it: a recent McKinsey report on the future of private banking in Europe reveals that 71% of clients are in favour of “multi-channel” interaction with their bank, with 25% even keen on an entirely digitalised process, although with the option of receiving human assistance when needed.
Investing in people
Throughout this transformation, relationship managers have received the full support of their banks’ Human Resources teams, who have recognised that training and certification is an essential investment to ensure bankers maintain their top-level expertise. For several years now banks have therefore followed in the footsteps of their English-speaking peers by allocating substantial proportions of human resources budgets to continual professional development.
Such training also demands time and energy investments by the relationship managers themselves. This is the price to pay to extend the traditional banker’s mainly interpersonal skills to include digital, financial, legal, and tax knowledge as well – all equally indispensable.
In fact the entire Swiss banking sector has benefited from these developments: by rising to the challenges it has faced and adapting to the new environment, it has preserved its reputation for quality and kept its top international ranking in terms of both size and competitiveness. There is the ultimate proof that the Swiss banker’s metamorphosis has been a successful one.