The big hidden danger of Zoom meetings for Singapore and Hong …

Covid-19 has drastically changed how business can be conducted – we’re all getting used to video meetings via Zoom and other platforms. This permeates across all industries, and private banking here in Asia is no exception.

Online communication has some definite benefits for both relationship managers and their clients, especially for RMs, who don’t have to make so many tiring business trips. However, I see the virtual meeting trend as a double-edged sword.

The main benefits are two-fold. Firstly, the lack of overseas travel brings relationships closer at almost zero cost and without much inconvenience (last-minute meeting cancellations don’t matter as much). Secondly, RMs can easily and conveniently introduce specialists (from other teams in their bank) into video meetings to explain solutions whenever the need arises.

But these benefits unfortunately come with unavoidable risks for RMs. It is very important to understand the risks so as to minimise them (I’m not referring to security risks here, which are equally important). Let me explain…

As more and more wealthy private banking clients in Singapore and Hong Kong get used to video meetings (and actually start enjoying them), the total number of clients who prefer online meetings could eventually exceed those who prefer face-to-face ones.

This would open up an easy client-poaching opportunity for competitor banks. Traditionally, it’s been very difficult for private bankers in Asia to approach clients of rival firms, because clients normally reject unsolicited face-to-face-meetings with unknown RMs (it’s out of their comfort zone).

I think the sheer convenience of video meetings and clients’ gradual acceptance of them could change all that. For example, opportunistic bankers could use introductory video meetings to find out whether a wealthy person needs specific products that are not offered by their current bank.

What factors could be potential door openers for Asian private bankers looking to poach clients via video? Here are some of the main ones.

Clients’ dissatisfaction with their RMs 

The biggest mistake an RM can make is when their clients make big losses in investments recommended by them, and they then try to avoid facing the music, hoping for a market recovery. Other potential dissatisfactions include failure to respond to clients’ requests on time, which can create simmering unhappiness over the longer term.

Clients’ dissatisfaction with the bank

The largest factor here is usually uncompetitive rates, from deposits to sales charges, on investment products. But solid relationships between RMs and clients can often overcome this obstacle.

Gaps in products or solutions

This is probably the most important factor. If other banks come in to fill this gap, it could spell eventual trouble for the current RMs. All private banks in Asia have pros and cons, and very few actually provide the entire product suite: overseas mortgages, corporate banking (most typically trade finance), investment banking, direct private equity investment, estate and tax planning, family legacy and succession planning, direct access to a securities trading platform, and so on.

At first, a new bank might just fill one or two specific product gaps. However, as time passes and it also offers excellent service and gains deep trust,  clients might transfer more of their AUM. This results in the sharing of relationships with competitors – and mistakes made by the existing RMs could even prompt clients to switch banks entirely.

In summary, a combination of the above-mentioned situations would be disastrous for RMs. In the past and even currently, it is not easy for competitors to “intrude” because clients in general still prefer face-to-face meetings and this makes it hard for competitors to come in to suggest new solutions.

However, in the future – when video meetings and webinars have become the norm and the technology has made even more advancements – clients might just welcome e-meetings with other bankers as it is no longer out of their psychological comfort zone.

This means that RMs and their banks must be constantly on their toes to provide the best services to their clients and safeguard their territories. Competition for clients may become very intense in the future. The winners will likely be the clients themselves, which could actually be great news for the Asian private banking sector.

Photo by Chris Montgomery on Unsplash

Singapore-based Liu San Li is a former private banker who is now a business partner at wealth management firm Avallis. The views expressed are his own, not those of his employer.

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