The event set the scene for an in-depth discussion on the recent development affecting the private banking industry.

“Private wealth managers are seeing an exponential change in their clients’ expectations and behavior. A majority of clients expect services and products fully tailored to their situation and specific needs, and this requires complex financial structures and a new, personalized approach. The banks in Luxembourg are now reviewing their business model to accommodate the emerging requirements of the high-end customer segment,” explains Pascal Rapallino, Partner, Tax at Deloitte Luxembourg.

Going digital
One of the emerging trends discussed at the conference, was the fact that private banking customers are expecting to interact with their relationship manager outside of normal office hours and via the channel of their choice, such as mobile applications and other digital solutions. The private banking industry can no longer limit their client interaction to traditional meetings.
“The digital communication channels will certainly not replace the in-person interaction with clients, but complement the existing services. Clients are placing increasing importance on three aspects of their business relationship; one is the value proposition offered by the banking partner, the second is the corresponding pricing model and the third is the ease of interaction with their relationship manager. The development of digital solutions is therefore key,” adds Pascal Martino, Partner Advisory & Consulting and Digital Leader at Deloitte Luxembourg.

Earlier this year, Deloitte Luxembourg developed a new, online tool named Anywealth, allowing users - mainly relationship managers and compliance functions - to get information on the regulatory, fiscal and KYC/AML requirements applicable to a particular cross-border investment in real time.

New pricing models
Services such as tax reporting and tax reclaim, viewed before by clients as value-added services, are no longer viewed as such and are now considered by clients as being part of a basic service offering. Players in the private banking industry are therefore increasingly considering outsourcing these examples of non-core services and focusing their attention and investment on the core aspects of their value proposition. Emerging competitors from areas outside of the banking sector are further provoking a change in the banks’ established business and pricing models.
“Through its service offering, the private banking industry in Luxembourg is targeting the UHNWI and HNWI clients and striving to become a preferred jurisdiction for this segment, as opposed to developing general services for the mass affluent market,” concludes Pascal Rapallino.