Private Banking Business Models

Business Models in Private Banking discover, understand and define © Arvetica 7th of February 2008

(Innovative) Business Models in Private Banking

UBS

one bank strategy: close cooperation between wealth management, asset management and investment banking

UBS

jointly explore business opportunities, create synergies and propose integrated offer

UBS

jointly explore business opportunities, create synergies and propose integrated offer

investment banking business can have a negative impact on private banking

Geneva Private Banks

historically successful based on relationship and brand equity focused

challenged to adapt to a shift in client needs towards a new breed of global entrepreneur clients

challenged to adapt to a shift in client needs towards a new breed of global entrepreneur clients

today’s newly wealthy often require a holistic and integrated offer

Investec

specifically targets C-level executives of public companies with tied wealth

Investec

specifically targets C-level executives of public companies with tied wealth

offers them credit against their company shares to allow them to diversify risk

Banque Syz

differentiation through performance based brand

Banque Syz

strong competencies in the field of alternative assets

Banque Syz

strong competencies in the field of alternative assets

substantial investments in human resources with knowledge at the forefront of alternative assets

Independant Asset Managers

Independent Asset Managers

rise based on better informed clients who seek objective and independent advice

rise based on advisors who seek independence from large structures to give their clients neutral advice

rise based on advisors who seek independence from large structures to give their clients neutral advice

focus on advisory services and client relationship

Sodi

offers independent asset managers (IAMs) a physical and administrative platform

Sodi

IAMs can draw on professional services offered by Sodi

Sodi

IAMs can draw on professional services offered by Sodi

gives IAMs the advantages of scale, while allowing them to retain independence

Mirabaud Private Bank

Mirabaud Asset Management

gives bankers the security, brand and platform

leaves them the flexibility and entrepreneurial context of independent asset managers

leaves them the flexibility and entrepreneurial context of independent asset managers

combines the best of “both worlds”

EFG

A bank built for and around “Client Relationship Officers” (CROs)

EFG

Aims at liberating CROs from any work that restrains them from focusing on client relationships

EFG

Aims at liberating CROs from any work that restrains them from focusing on client relationships

Clients “belong to” the CRO not the bank

Swissquote

Emergence of a new breed of clients that plays with online trading, while delegating the management of the core part of their wealth

Swissquote

Emergence of a new breed of clients that plays with online trading, while delegating the management of the core part of their wealth

These clients are very likely to question the added value and cost of their bankers, based on their trading experience

TIGER21

peer network of (U)HNWIs with confidential groups of 12 members, who meet once a month

TIGER21

every month a different member performs a “portfolio defense” in front of the other group members

TIGER21

every month a different member performs a “portfolio defense” in front of the other group members

TIGER21’s peer network complements bankers and leads to better informed clients

CONCLUSION multiple business models are competing in private banking

WHICH … path should I choose? How can I make the right decision?

WHAT … actually is a business model?

Practice Shows: Understandings Diverge

a business model is the blueprint of how a business intends to generate profits and it can be described by a number of components

what do we offer? WHAT?

whom do we offer it to? WHAT? WHO?

how do we do it? WHAT? WHO? HOW?

what‘s in it for us? WHAT? WHO? HOW? $? € ?

9 Bricks to Describe your Business Model WHAT? WHO? HOW? $? € ? CLIENTS

9 Bricks to Describe your Business Model WHAT? WHO? HOW? $? € ? CLIENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS

9 Bricks to Describe your Business Model WHAT? WHO? HOW? $? € ? CLIENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS OFFER CLIENT SEGMENTS

9 Bricks to Describe your Business Model WHAT? WHO? HOW? $? € ? CLIENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS OFFER CLIENT SEGMENTS ACQUISITION CHANNELS

9 Bricks to Describe your Business Model WHAT? WHO? HOW? $? € ? CLIENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS OFFER CLIENT RELATIONSHIPS CLIENT SEGMENTS ACQUISITION CHANNELS

9 Bricks to Describe your Business Model WHAT? WHO? € ? CLIENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS OFFER CLIENT RELATIONSHIPS CLIENT SEGMENTS REVENUE FLOWS ACQUISITION CHANNELS HOW? $?

9 Bricks to Describe your Business Model WHAT? WHO? HOW? € ? CLIENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS OFFER CLIENT RELATIONSHIPS CLIENT SEGMENTS REVENUE FLOWS ACQUISITION CHANNELS KEY RESOURCES $?

9 Bricks to Describe your Business Model WHAT? WHO? HOW? € ? CLIENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS OFFER CLIENT RELATIONSHIPS CLIENT SEGMENTS REVENUE FLOWS ACQUISITION CHANNELS KEY RESOURCES $? CLIENT SEGMENTS CLIENT SEGMENTS KEY ACTIVITIES

9 Bricks to Describe your Business Model WHAT? WHO? HOW? € ? CLIENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS OFFER CLIENT RELATIONSHIPS CLIENT SEGMENTS REVENUE FLOWS ACQUISITION CHANNELS KEY RESOURCES $? CLIENT SEGMENTS CLIENT SEGMENTS KEY ACTIVITIES CLIENT SEGMENTS CLIENT SEGMENTS PARTNER NETWORK

9 Bricks to Describe your Business Model WHAT? WHO? HOW? $? € ? CLIENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS OFFER COST STRUCTURE CLIENT RELATIONSHIPS CLIENT SEGMENTS KEY ACTIVITIES PARTNER NETWORK REVENUE FLOWS ACQUISITION CHANNELS KEY RESOURCES

HOW … can we sharpen our business model and achieve innovation?

eric calling

The 5 steps of business model design & innovation

describe existing business model

assess strengths and weaknesses

brainstorm on improvements & opportunities

turn new model into a project roadmap

1 2 4 3 VISUALIZE ASSESS INNOVATE PLAN 5 IMPLEMENT

communicate & implement

VISUALIZE: co-create to draw your business model

ASSESS: question your business model acquisition and distribution channel assessment strengths (+) (-) weaknesses our channels have a strong reach among our target clients our channels only reach a fraction of our target clients we know how effective each of our channels is we don’t know how successful our channels are we know how cost efficient each of our channels is we don’t know how costly our channels are we use our most costly channels for our most profitable clients unprofitable clients regularly use our most expensive channels … …

INNOVATE: ideate, prototype, iterate, decide

INNOVATE: ideate, prototype, iterate, decide WHAT? WHO? HOW? $? € ? CLIENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS OFFER COST STRUCTURE CLIENT RELATIONSHIPS CLIENT SEGMENTS KEY ACTIVITIES PARTNER NETWORK REVENUE FLOWS ACQUISITION CHANNELS KEY RESOURCES

PLAN: draw a project roadmap and align your enterprise Strategy direction new business model [Galbraith 2001]

PLAN: draw a project roadmap and align your enterprise Strategy Structure power direction new business model [Galbraith 2001]

PLAN: draw a project roadmap and align your enterprise Strategy Structure Processes power direction information new business model [Galbraith 2001]

PLAN: draw a project roadmap and align your enterprise Strategy Structure Processes Rewards power direction motivation information new business model [Galbraith 2001]

PLAN: draw a project roadmap and align your enterprise Strategy Structure Processes Rewards People power direction skills/mind-set motivation information new business model [Galbraith 2001]

IMPLEMENT: just do it…

smoking gun

Thank you.

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