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B-Case 3

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B-Case 3

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B-Case 3

  1. 1. <ul><li>Chappuis Halder & Cie </li></ul><ul><li>Private Banking-Customer Loyalty </li></ul><ul><li>January 2010 </li></ul>
  2. 2. Private Banking activities demonstrate clear geographical discrepancies 9,1 +7,0% 5,8 +6,8% 8,3 +6,5% 7,4 +12,8% 2,2 +5,1% Estimated wealth of HNWI in 2008 in K billion $ Growth forecast Annual Growth Rate 2008 – 2013 Forecast <ul><li>Highest wealth concentration of HNWI (one quarter of world HNWI) </li></ul><ul><li>HNWI seek investments closed to home (74% investments onshore) </li></ul><ul><li>Disparate situation between countries (-26% in UK while -3% in Germany) </li></ul><ul><li>Russia has lost 28% of is HNWI population </li></ul><ul><li>Pressure on offshore market </li></ul><ul><li>Strong political and regulatory pressure </li></ul><ul><li>High concentration in Japan (half of HNWI in the region) </li></ul><ul><li>China is becoming the 4 th market in the world </li></ul><ul><li>India is an emerging market, with wealth creation “up and down” (2007 / 20008) </li></ul><ul><li>Conservative investments (cash, real estate, etc.) </li></ul>Source: World Wealth Report 2009
  3. 3. With $1 700 bn of AuM, Switzerland is not only the leading market place, but has the longest history and highest reputation Source: companies web sites <ul><li>Wealth management </li></ul><ul><li>Trust and family offices </li></ul><ul><li>Asset management, Financial product </li></ul><ul><li>Open architecture </li></ul><ul><li>Advices Services for independent asset managers </li></ul><ul><li>Funds management </li></ul><ul><li>Global Custody + </li></ul>Innovative products Sustanaibility and trust Offer Competition landscape Universal Banks (extract) Pure players (extract) know-how, innovation and tradition Communication and presence (proximity with local customers) all bank services with large footprint The Swiss market is interesting to look at for best practices / trends
  4. 4. Swiss market Pure Players analysis demonstrates different positioning and strategies Source: companies web sites AuM : $ 360 bn <ul><li>Footprint expansion : new retail office in Honk-Kong (Feb 08), new office in Basel (June 08) </li></ul><ul><li>Innovation on new products based on real assets (gold, timber, water, etc.) </li></ul><ul><li>Development of sustainable business (awarded best provider in 2009) </li></ul><ul><li>Banks : Geneva, Luxembourg, Nassau, Singapore </li></ul><ul><li>Branches : Zurich, Frankfurt, Madrid, Paris </li></ul><ul><li>Offices : Barcelona, Basel, Dubai, Florence, Hong Kong, Lausanne, London, Milan, Montreal, Rome, Turin, Tokyo </li></ul><ul><li>Expanding investment platform with alternative investments </li></ul><ul><li>Expanding client target group in the institutional and private segments with new products </li></ul><ul><li>Increasing onshore business without neglecting position in Switzerland (new office in Fribourg) </li></ul><ul><li>Switzerland : Geneva, Fribourg, Lausanne, Lugano, Vevey, Zurich </li></ul><ul><li>Europe : Amsterdam, Barcelona, Brussels, Düsseldorf, Gibraltar, Jersey, London, Madrid, Paris, Prague </li></ul><ul><li>World : Montreal, Bermuda, Nassau, Singapore, Hong Kong, Tokyo, Dubai </li></ul><ul><li>E-services is highly promoted and used as a differentiator mean </li></ul><ul><li>Expanding footprint : new offices in Nuremberg, Bern and Austria in 2009 </li></ul><ul><li>Sarasin entered the Indian market and established Sarasin-Alpen Ltd mid 2009 </li></ul><ul><li>Switzerland : Basel, (HO), Berne, Geneva, Lugano, Zurich </li></ul><ul><li>Europe : Dublin, Frankfurt, Guernsey, La Coruña, Nuremberg </li></ul><ul><li>London, Madrid, Munich, Warsaw, Vienne </li></ul><ul><li>World : Delhi, Mumbai (India), Doha, Dubai, Muscat, Hong-Kong, Singapore </li></ul>Development axis Footprint <ul><li>Several newsletters sent to customers on Economy analysis </li></ul><ul><li>New products : physical gold fund in Switzerland in (oct 09), PF(LUX)-Agriculture fund (May 09), First fund on Latin America Local Currency Debt (March 08), MENA fund in May 08 </li></ul><ul><li>Transparency : AuM and Rating on web site </li></ul><ul><li>Numerous interviews of Patrick Odier in press </li></ul><ul><li>Group news focus on LODH proximity and strong involvement in business (market analysis and trends), sponsoring (“hydrocoptère”), events (Private Banking fair in Geneva), awards (family Merck) </li></ul><ul><li>Many press releases on sustainable business (green economy, car manufacturers, real estate, etc.) </li></ul><ul><li>Innovation on sustainable products: Sarasin has issued in July 09 the world’s first fund to specialized in the shares of sustainable property companies, the Sarasin Sustainable Equity – Real Estate Global Fund </li></ul>Major communica-tions during 2008 - 2009 AuM : $ 75 bn
  5. 5. With a decrease in asset under management and higher costs of acquisition, Customer Loyalty Management is now a key issue Decrease of AuM Higher costs of acquisition Value proposition must be anti-attrition oriented <ul><li>Fame and reputation damages </li></ul><ul><li>Lost of confidence and trusts </li></ul><ul><li>Transfer of assets from Universal Banks to Pure Player Private Banks (in 2008 / 2009, not sure in 2010) </li></ul><ul><li>Understanding customers’ expectations : products, services, relationship management, etc. </li></ul><ul><li>Reviewing advisory processes to bring more value </li></ul><ul><li>Integrating Risk Management (e.g. fully understandable risk reporting, risk training, risk profiling) in Customer Relationship Management </li></ul><ul><li>Improve reporting and access to information </li></ul><ul><li>Higher interest rates are now common to attract customers </li></ul><ul><li>Customers are now more interested in simple, transparent and low risks products (cash, fixed income) with low margin for the bank </li></ul>
  6. 6. From customers’ point of view, reporting and on-line access are major issues to stay with a private bank Source : Word Wealth Report, 2009 Strategic levers of Client Retention
  7. 7. Improve distribution channel efficiency Manage distribution costs Use the full scope of possible communication tool Adapt to the client’s changing expectations <ul><li>Use indirect distribution to target the right kind of customers </li></ul><ul><li>Make sure targeted customers for the bank are well addressed by indirect distributors </li></ul><ul><li>Distribution costs gather acquisition costs, upselling costs and loyalty costs </li></ul><ul><li>These costs have to be monitored closely to match the customer value ( </li></ul><ul><li>Multi-channels is now a reality, and have to be integrated in the distribution strategy </li></ul><ul><li>Most on HNWI are technophiles and are keen to use internet, mobile, etc. </li></ul><ul><li>Clients are now expecting both direct access to their wealth adviser and access to specific information and services through online channels </li></ul><ul><li>They won’t use always the same channel to get in touch with their bank, it is necessary to leave them the choice </li></ul>Distribution is therefore a key asset to develop customer intimacy if matching customers’ expectations

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