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Swiss Private Banking – back to a“New Normal”? “Since 2001, The Consulting Partnership, Zurich provides leading, specialized expertise in Management Consulting, Compensation Strategy and Executive Search dedicated to Private Banking and acts as experienced sparring partner to both decision makers as well as professionals in Private Banking,” says managing partner Robert Hemmi. TEXT: TCP | PHOTOS: PRESS IMAGES

With 26% market share, Switzerland is the world leader in cross-border wealth management and claims this place ahead of Singapore.To defend this position, the sector needs to continue its recovery from the forced regulatory change imposed during the past years. Is the Swiss Private Banking sector back on track? After six years of consolidation, many of the globally operating Swiss Private Banks demonstrate strong progress – they are able to attract new clients, grow their Asset base and increase their revenues. At the same time, many smaller banks are affected by the repatriation of assets; they cannot compensate for this outflow with Net New Money from Emerging Markets.This analysis is also confirmed by a recent study (KPMG / September

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2014: Clarity on Performance of Swiss Private Banks): the top third of the analyzed banks are performing strongly, whereas the bottom third is writing off losses or is in continuous decline. Although Operating Costs are 20% above the levels of 2007, the recent recovery has fuelled business development: against the backdrop of better foreseeable regulatory risks, there is a returning interest in opportunistic growth initiatives: the surge in recent mergers helps to accelerate the market consolidation: currently, there are 20 to 25 additional M & A projects in the pipeline. In parallel, there is also a strong need to invest in the shape of the future business model (stronger performance orientation, digital Private Banking, service based offering) to maintain competitiveness.

Altogether, the environment remains challenging. As such, our response to the initial question is “yes, but…”: the return to old paradigms and the short-term recovery will not secure the competitive edge. More banks will have to enter alliances and partnerships. We are not trying to impair the recent improvements, but innovation and strict cost management remain the key drivers to secure the long term future for the years to come. www.tcpgroup.ch

Robert Hemmi, TCP managing partner