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The pandemic is sparking a renewed wave of consolidation but also impetus for innovation, Maerki Baumann CEO Stephan Zwahlen tells finews.ch. Business models will need to adapt.

Stephan Zwahlen, how is Maerki Baumann doing in the crisis?

The extent of the crisis and the suffering gives us pause. We can only guess at the social and economic consequences of this historic event. At Maerki Baumann, I was pleasantly surprised how seamlessly we moved to a remote working mode which provided access to all employees decentralized access within a few hours. I have a lot of respect for how quickly our employees came to grips with the situation.

How's business since the outbreak?

The immediate effect of higher volatility in financial markets fed into transaction income. Our first quarter was markedly above expectations. Further out, our income will mainly depend on client assets.

«Clients were mostly calm and level-headed»

Even if equity markets rallied from the lows of mid.March and we've seen a noteworthy correction, the drop in asset base will leave a mark in coming quarters.

How did clients experience the massive market losses in April?

Our clients were mostly calm and level-headed despite the dramatic correction. I believe that's because our private bankers were very close to their clients during the March turbulence, and faciliated professional investment communication. In addition, very favorable market performance since 2019 in many portfolios may have made the losses seem more digestible.

Given the uncertainty we all feel and how the crisis may unfold, how does this need that clients have for more information feel?

Reliable forecasts are hard to come by right now. How financial markets develop is influenced by many factors, which mades thinking in scenarios difficult. What's also difficult is that we have almost no experience with comparable situations. Given high valuations in equity markets, we had advised to diversify defensively even before the crisis broke out.

«Human interaction is still enriching in banking»

In line with our motto of «security before return,» we reduced risks in our modular investment solution. The performance we achieved vs the benchmark shows that Maerki Baumann can score in uncertain times.

How can you advice clients and maintain social distancing – are you still meeting people in person?

The current situation is dramatic for our private bank, where we place a high value in maintaining a personal relationship with clients. We stopped doing client events, business travel or client meetings weeks ago. But Maerki Baumann has pursued a hybrid advice model for awhile now, which relies on digital communication. Even though roughly 80 percent of our staff is working from home, we can still offer our services. Clients have responded well to the precautionary measures.

Any realizations in the past weeks that digital banking and advisory have weaknesses on potential for improvement?

The key element of private banking is and remains the relationship of trust between client, private banker, and firm. In our experience, this trust is substantially shaped by human interaction. Dealing with questions of wealth often means highly personal and what people perceive to be sensitive and often emotional issues. Even if digital communication eases a lot of aspects, personal contact enriches the relationship for both sides.