There's a huge gap between what banks are promising and what they're delivering, finews.ch co-founder Claude Baumann writes in an essay for finews.first.
finews.first is a forum for renowned authors specialized on economic and financial topics. The texts are published in both German and English. The publishers of finews.com are responsible for the selection.
Actually, I'm the type of customer that all Swiss banks are looking for nowadays: I'm Swiss (by chance) and entrepreneur (by choice). I have always paid my taxes on income and savings. I also own a stake in a company that has created a dozen new jobs over the past eight years, is profitable and pays its taxes.
Last but not least, I now am a little over 50 years of age – at a stage of life where you tend to have certain financial needs. That's a starting point. So what about the banks then?
Since banking secrecy has ceased to provide the same business opportunities as it used to – that is generating huge profits through the management of untaxed assets – new sources of income are much sought after. In this situation, the Swiss banking community is fighting over so-called executives (CEOs of companies) and entrepreneurs (businessmen or company owners).
«And I don't even mention the commissions»
Thanks to my profession, I almost daily have to deal with such strategic announcements and well-worded promises of performance. In their bid to attract new customers, banks actually are promising a sort of heaven on earth – reliable, service-minded, customer-friendly, long-term performance are attributes often used to describe their product. In reality, those promises all too frequently turn out to be but empty words.
And I'm not even talking about the commissions, which at times seem to be a function of the personal preferences of a relationship manager. What I mean is a certain culture of interaction between bank and customer. Between a company eager to generate an added value and interested in doing the little bit extra for its client. But that's exactly where there are some serious shortcomings, as my personal experience suggests. Here are some examples for you.
As relationship managers at the larger banks change every second year, I recently encountered a member of staff I hadn't yet met. He associated me with newspapers I had been working for many years ago, but didn't know what I had been doing for the past eight years. Having explained my professional background, he was duly embarrassed.
«The attitude of many bankers when confronted with customers somehow seems pretty ignorant»
But how on earth does he intend to provide an «all-embracing advisory» across the various «phases of my life», if he isn't up to date? Even the briefest of Google searches minutes before our meeting would have provided quite a lot of insights about my person.
Another relationship manager knew what I was doing but didn't know that his employer was the bank of choice of our company. How, I ask myself, does a bank intend to do the so-called cross-selling, in other words exploit customer relations in more than one direction, if their employees don't even care to do the most basic of searches in their database?
The attitude of many bankers when confronted with customers somehow seems pretty ignorant. Another relationship manager, with whom I had regularly held discussions about the banking industry, suggested I should meet his boss. Imagine my surprise when the executive explained, for starters, that he didn't actually know the financial news portal I had co-founded. Of course you could argue that there are better websites with financial news in Switzerland. But if you want to deepen the relationship with your customer, that may not be the best way to go about it.
«At my age you also are faced with the loss of loved ones»
It wasn't only the lack of preparation for the meeting with a customer that irritated me, but the sheer indifference displayed. In another era, this would have been called «work to rule». It's a strange resistance displayed by many relationship managers to engage with customers, to anticipate their needs. But that's exactly what banks are promising to do, whichever of the institutes you choose to entrust your money with.
Eight years after the onset of the financial crisis, the end of banking secrecy, narrowing margins and the ever-increasing use of technology, reality disproves all promises. Advice is what Swiss banking portrays as the jewel of its product – and yet it seems to have been left to rot. Another example to proof my point:
At my age you also are faced with the loss of loved ones. This is tough to take and very sad. But also leads to topics such as inheritance, succession plans and asset analysis. Here, if anywhere, you need consultancy. But alas, I still am waiting to be called back from my bank's branch manager. You would think that the word «inheritance» should actually ring all the right bells with any banker, as the passage of assets normally leads to a reallocation, but some bankers don't seem to care.
«I thought we had arrived at the age of fintech»
Many banks apparently spend most of their energy on delaying paperwork and procedures, for instance if an important document is promised for delivery in ten (!) days time, or if the clarification of certain aspects about the inheritance simply isn't happening. I thought we had arrived at the age of fintech, an era where everything is fully digitalized. Not so – and I'm not talking about a savings bank in a remote Alpine village.
True, inheritance matters can be complex, but that doesn't justify delaying paperwork forever. No wonder you start suspecting that the last penny to be possibly extracted from a customer relationship is the true reason for the delay.
In the end, a call to the top executive made it happen. But surely, it doesn't have to be that way? Having to resort to threats to get things happen?
«Is it the phantom pain of a lost banking secrecy?»
My conclusion? There is a world in Swiss banking, far removed from the glitzy posters and big promises, a world that is so unbelievably helpless, unmotivated, and extremely slow. How come? Is it the much-maligned regulation, the never-ending compliance, the remoteness of exchangeable CEOs with excessive salaries? The phantom pain of a lost banking secrecy? What we evidently need is a culture of service to the customer, where serving and performing are the core values, as Robert Holzach, the last of the great Swiss bankers, said.
With the exception of one, Swiss banks may proudly claim to have mastered the financial crisis, but they still haven't found their true destiny as banking institutes.
Claude Baumann is co-founder of finews.ch and finews.asia. He used to write for Weltwoche and Finanz und Wirtschaft. He also co-founded the publishers Nagel & Kimche and launched the business travel magazine Arrivals. He’s the author of several books on the banking industry.
Previous contributions: Rudi Bogni, Adriano B. Lucatelli, Peter Kurer, Oliver Berger, Rolf Banz, Dieter Ruloff, Samuel Gerber, Werner Vogt, Walter Wittmann, Alfred Mettler, Peter Hody, Robert Holzach, Thorsten Polleit, Craig Murray, David Zollinger, Arthur Bolliger, Beat Kappeler, Chris Rowe, Stefan Gerlach, Marc Lussy, Nuno Fernandes, Claude Baumann, Beat Wittmann, Richard Egger, Maurice Pedergnana, Didier Saint-George, Marco Bargel, Steve Hanke, Andreas Britt, Urs Schoettli, Ursula Finsterwald, Stefan Kreuzkamp, Katharina Bart, Oliver Bussmann, Michael Benz, Peter Hody, Albert Steck, Andreas Britt, Martin Dahinden, Thomas Fedier, Alfred Mettler, Frédéric Papp, Brigitte Strebel, Peter Hody, Mirjam Staub-Bisang and Guido Schilling.
