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SUCCESS FACTORS FOR PRIVATE BANKING STRATEGY FOCUSING ON HIGH NET WORTH CUSTOMERS

SUCCESS FACTORS FOR PRIVATE BANKING STRATEGY FOCUSING ON HIGH NET WORTH CUSTOMERS. Alla Tkachenko Senior Vice President Baltic International Bank Riga, October 2006. In the financial world, the only way to differentiate yourself is at the relationship level.

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SUCCESS FACTORS FOR PRIVATE BANKING STRATEGY FOCUSING ON HIGH NET WORTH CUSTOMERS

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  1. SUCCESS FACTORS FOR PRIVATE BANKING STRATEGYFOCUSING ON HIGH NET WORTH CUSTOMERS Alla Tkachenko Senior Vice President Baltic International Bank Riga, October 2006

  2. In the financial world, the only way to differentiate yourself is at the relationship level. (McLaughlin, cited in Engen, 2001)

  3. Among the most important factors for private banking strategy to be successful are: • choosing of the right business strategy • effective implementation of the strategy chosen

  4. Baltic International Bank – the private bank with the 13 years experience in servicing of high net worth customers Baltic International Bank’slong-term strategy – Customer RelationshipManagement (CRM)

  5. CRM Definition and description CRM - an important strategic concept which deals with and relates to absolutely all the issues in organization without any exceptions. • “CRM is about dealing with each customer individually by means of adding value to each customer’s daily life.” (Temporal and Trott, 2001) • “CRM is perhaps best described as an overarching business strategy built on a three-legged stool of technology, new business processes and cultural transformation. Neglect any one of the three legs, and projects teeters.” (Engen, 2001)

  6. Happy Customers Bank Profit Generation Happy Shareholders Customer Relationship Management – a tool of making it possible

  7. CRM Main Components • Attitude • Customers (External & Internal) • Customer Processes

  8. Customers External The basics of Private Banking: • individualized approach and personal attention to the customer • the bank’s ability to provide the customer not only with products, but with complete personally tailored solutions concentrated around the individual customer’s holistic needs.

  9. Customers To provide the above complete personally tailored solutions the bank • uses its own capabilities of services providing • outsources the certain activities in order to arrange them done in the most professional way

  10. Customer Advocacy Concept (as formulated by Urban in MIT Sloan Management Review in 2004) • The customer is provided the complete and open information about the best products and services for him, even if these offerings are from competitors.

  11. Customers Internal • Employees’ experience is important, since employees influence customers’ perception of the bank

  12. Customer Processes • Arranging the Private Banking business model around customer experience and relationship process rather than around bank’s products • Concentrating on everything which provides value during customer’s decision making, purchase and usage, the bank differentiates itself not by product but by customer experience • Getting knowledge of each individual customer

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