The bankers’ professional training race

From 2018, all financial centers will be on an equal footing, or, to put it another way, they will all find themselves at the same starting line. The automatic exchange of information represents an opportunity for the Swiss financial center to resurrect the “Swiss Made” private banking label, as long as the country’s bankers manage to keep their expertise ahead of the others in the race.

 

Compared with other financial centers, Switzerland has already stolen a march in several ways: it is renowned for its international asset management know-how; the level of service it offers its clients is one of the best in the world; and it provides a particularly wide range of products and services. In order to gain even more ground and to continue to increase market share, training Swiss private bankers in more technical subjects such as taxation and estate planning is more essential than ever. Several organizations have already set up compulsory in-house training programs. Nonetheless, if you are to strive to keep your foothold in the international financial world, you will have to follow the lead of those who have gained a head start in the bankers’ professional training race, such as the United States, the United Kingdom and Singapore, who have all introduced compulsory certifications.

 

We are currently faced with three major challenges: putting in place a compulsory skills base; proving that bankers can generate added value for their clients; and training bankers in marketing techniques.

 

Today, it is unimaginable for a private banker not to be fully aware of cross-border, suitability or compliance rules. This minimum knowledge base – which entails specializing in a limited number of markets – reinforces the creditability of relationship managers and guarantees that they work within the regulatory framework that applies to their international clients, that they respond to these clients’ needs and that they do not threaten the reputation of their financial organization. On top of this, there is the matter of regulatory obligation which forms part of the suitability rules; this means adapting both advice and products to the specific needs of each client. That said, it is not simply a matter of specializing in all the fields of expertise (which seems unfeasible), but rather one of developing the ability to make the right diagnosis, and, as the case may be, pointing clients in the direction of the best specialists.

 

In order to outperform their peers, the Swiss banker of 2020 will also have to bring real added value to their wealthy clients, especially compared with domestic banks. Indeed, in a world marked by transparency and the automatic exchange of information, added value will no longer just be measured in absolute terms, but rather in relative terms, which is to say in comparison with the performances generated after tax by competing domestic banks which benefit from products that are often more efficient in local tax and regulatory environments. Confidentiality and the strength of personal relationships will thus have to be backed up by a solid technical base in terms of the products and services on offer, including such aspects as taxation, international estate planning, multi-currency asset management and asset-liability management. Further, it will not simply be a matter of offering a first-class service, but also of bringing together cost-effective solutions by using different types of holding structures, such as life insurance, which is an indispensable solution in several European countries, but also one which is seldom used by Swiss banks. 

 

Recognizing the importance of ensuring a compulsory skills base in order to further improve the competitiveness of our financial center, on 30 June, the Swiss Federal Council passed the Federal Financial Services Act (FFSA) and the Financial Institutions Act (FinIA), which set out the rules on training. It is now the responsibility of the financial center as a whole to develop the minimum skills standards, that of the banking institutions to regulate their bankers’ training system, and it falls to the bankers themselves to strive to improve their performance.

 

The development of technical skills – or, if you will, “hard skills” – is, of course, essential, but this also involves shifting mentalities. Historically, Swiss private bankers worked in a relatively favorable environment: our network, the reputation of our financial center, and a wide range of products and services used to be enough to ensure that there were regular inflows of funds. Today, the environment is increasingly competitive, demanding a more proactive approach, such as can be seen in Asia’s financial centers, or even in the institutional world, which is used to complex, standardized sales processes.

 

So the idea of providing training that is based on both know-how and negotiation techniques – including marketing skills – seems vital. This means the Swiss banker of 2020 will also have to win the loyalty of their clients with the relevance and insight of their advice; defend the fees they charge; manage and develop their network of business providers and prospects; as well as maximize client management by using a client relationship management (CRM) system.

 

Once again, Switzerland has an ace up its sleeve and an opportunity to seize. That said, it will not be able to do this without carrying out some real change management. Only by taking this step will we be in a position to be the first across the finishing line and win the recognition our financial center needs by resurrecting the “Swiss Made” label in the private banking world – one that is recognized the world over.

 

 

About Michel Longhini

Michel Longhini joined Union Bancaire Privée (UBP) in September 2010 as Chief Executive Officer (CEO) of the private banking division and member of the bank’s executive committee.

He is leading private banking operations worldwide, with a view to reinforcing UBP’s activities in emerging markets and Asia, while continuing to grow the bank’s overall private banking business.

Michel has over 20 years’ experience in private banking. Before joining UBP, and since 2008, he was managing director of BNP Paribas International Wealth Management in Paris. Member of the executive committee of BNP’s Wealth Management division since 1999, he first was global head of investment services, and then was CEO of wealth management in the Asia Pacific region from 2003 to 2008, based in Singapore. 

Michel holds an MBA from the Ecole Supérieure de Commerce, Lyon.

 

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