These are challenges that are being faced by the banking sector as much as any other. With more and more banking services undertaken online, the chance to build and maintain interpersonal relationships with clients is becoming ever more difficult.
We spoke with Christoph Mauchle, Member of the Group Executive Management and Head Client Business at Liechtenstein-based private bank VP Bank, to find out more about such challenges and how his organisation is striving to overcome them.
Superyachts: Firstly, for those who are unfamiliar with VP Bank, can you start by telling us about some of the key services and products you provide?
Christoph Mauchle: VP Bank Ltd was founded in 1956 and, with its 800 employees, ranks amongst the largest banks in Liechtenstein. Today, VP Bank is present with offices in Vaduz, Luxembourg, Zurich, Singapore, Hong Kong, Moscow and Tortola (British Virgin Islands). VP Bank Group offers tailor-made asset management and investment advisory services to private clients and financial intermediaries. Thanks to the Bank’s genuine open architecture, clients benefit from independent counselling: included in its investment recommendations are not just the Bank’s own asset management solutions but also the products and services of other leading financial institutions. Beside from these core capabilities VP Bank Group maintains an international fund centre.
What are some of the benefits of being a ‘boutique’ bank compared with being a larger organisation?
There is no one-size-fits-all solution when it comes to selecting an ideal financial partner. Be there no doubt, big banks can bring to bear some weighty advantages, such as a global network and the widest imaginable array of services. Nonetheless, the major players in the banking industry will always have difficulty shedding their reputation as dispassionate mass-marketers. Questions also arise as to the will – or even the ability – of large financial institutions to place the cultivation and nurturing of long-term relationships at the heart of their endeavours.
There are other options, though. Traditional yet highly modern financial services providers like VP Bank lay claim to their boutique approach, one which affords a big plus in terms of personalised care and the lack of potential conflicts of interest. The keen focus on client needs across all organisational and hierarchical levels is without a doubt the greatest strength of this “boutiqueness”: VP Bank’s employees share a common goal and are all pulling on the same end of the rope. Moreover, as a totally independent market participant, we can draw on a product universe that is not only on a par with the offerings of the big players; in many ways, it is far superior. Not least of all thanks to our worldwide collaboration with renowned partners, clients have access to solutions that are indeed hard to surpass. And of course, part of the package is our traditional intense desire to earn and preserve long-term relationships with our clients.
You have high net-worth clients all over the world – what are some of the modern challenges involved in being customer-focused and building relationships with clients in a digital era?
The financial industry is undergoing profound changes. Bank clients of all generations today use the internet for a large number of financial transactions and expect their banking partners to provide modern platforms.
VP Bank has recognised the signs of the times and invests specifically in digital solutions that will make the lives of private clients and intermediaries easier. At the same time, we are working to link digital platforms with personal advice. For we are convinced: the successful model of the future will be a combination of automated services and personal advice. This hybrid advice combines the benefits of digital solutions with the experience, expertise and empathy of a personal advisor.
As we know, wealthy people often make their money in diverse ways, from technology to property to inheritance. What are the challenges of creating a bespoke approach for each client?
We make it our objective to understand our clients and advise them on the basis of the current situation. The advisory process at VP Bank therefore comprises four steps: understand – advise – implement – follow up. These are the four steps we employ when we provide our clients with individual advice and service according to their personal requirements. Trust between the client and his or her advisor is essential.
Being successful requires meeting changes in client needs, complying with regulatory requirements and, at the same time, being able to utilise the advantages offered by a digital world. This is a challenge, of course. We are – as already mentioned – not an all-rounder, but pursue a boutique approach. This means that we offer distinct services to differentiate ourselves from our competitors, while our clients benefit from comprehensive and personal advice.
What ratio of your clients come from personal referrals?
It is our vision: “We generate enthusiasm by offering our clients unique experiences – this is why they recommend us”. We do know that most of VP Bank’s new clients come to the Bank at the recommendation of existing clients, but we don’t have the ratio in numbers.
How important is it to retain your best staff? Is there a risk that as banking becomes more digitised, personal relationships with staff will not be so important and clients will be more inclined to move from bank to bank?
The quality of employees and their commitment are crucial to success in business. As practice shows, quality of advice and customer focus are increasingly key differentiation factors in gaining long-term clients. After all, the more the financial industry meets the digital requirements of clients across the board, the more difficult it becomes to stand out among the competition on the basis of such solutions.
VP Bank relies on experienced client advisors and has launched targeted strategic recruitment efforts to this end. The aim is to hire a total of 75 client advisors at select Group locations over the next three years.
The working environment of VP Bank is characterised by a family-like atmosphere and a high degree of freedom in decision-making. Internal communications and teamwork are key success factors for us. Our clients ultimately observe that too.
Would you venture a look into the future? What else are we going to see with the digitisation of the financial industry?
Online and mobile banking changes the habits of clients. Instead of stepping up to the bank counter, they manage many bank services online today. Many banks are experimenting with video chat, avatar-based advice and the use of artificial intelligence. Clients expect their banks to simplify and increasingly digitise certain services. But we believe that artificial intelligence can never replace an empathic and personal advisor. However, it is difficult to predict what the future holds. Who would have imagined 20 years ago that we would book trips and wire money from a smartphone?