egyii blog

“It’s all about long-term professional relation building. Leverage & greed were the cause of the financial crisis.” JP Cuoni, CEO EFG Bank

Jean Pierre Cuoni, Co-Founder & Chairman of Swiss based EFG bank, saw the light early on in the private banking industry.

Mr. Cuoni retired in 1994 from Coutts as the CEO, and held numerous senior positions at Handelsbank NatWest and Citibank.

In 1995 he and Mr. Lonnie Howell set up EFG bank.

Mr. Cuoni, in the business since 1960, realised that little had changed in private banking. He said (and still says) that banking is personal and all about relationships, relationships that lead to trust and confidence in the bank relationship manager and the bank itself.

However, in the 1990′s, he started to see things fall apart in the banks’ operations. The banks were changing the way they operated. “Hedge funds, structured products, funds of funds, alternative investments… All these are new products that only started in the 1990s.”

The business was becoming less personalized and was lacking the proper client focus.

So, in response to the shock of this, EFG was born.

EFG is very unique in the way it operates. EFG woos older, experienced bankers who are looking to be on their own, however, would like an infrastructure to support them. They use their skills to become “private bank entrepreneurs”- running their own business off of EFG’s physical platforms.

This, combined with a caring philosophy and approach to clients and relationships, has lead to a huge success. Although business is down, as we all expect, EFG continues to flourish ahead of many of the “fallen” banks who focused purely on the bank’s motives (vs the client’s motives).

On a local level, I have met Mr. Kees Stoute, Managing Director of EFG Singapore. Mr. Stoute worked his way up in the  banking business from roles in IT and as the COO and MD in other banks before joining EFG. Why did he make the change to EFG? He saw EFG was following  the core beliefs and principles that make a bank successful.

I had a conversation with Mr. Stoute on trust, an integral part of both his and EFG’s business philosophy. The following is an excerpt from that conversation:

“Trust is not a soft skill. It makes the difference in the business. Trust is the core of business,” said Mr. Stoute.

EFG is and should be the model bank of the future.

For more information on EFG Bank, click here. You will be greeted with the following important message:

“What is the essence of private banking?

Relationships, and the conditions for them to flourish. A nurturing environment, that enables our people to excel at crafting solutions for you.

To us, the fundamental building blocks are people.

Professionals of the highest calibre, free to act in their clients’ best interests. Who strive to eradicate life’s inconveniences; who simplify complexity.

Welcome to EFG Bank, truly a private bank unlike any other.”

Trip Allen, Team Egyii, Singapore

According to a recent study published by Dow Jones titled “Wealth Management After the Crunch,” the following numbers on banks’ performance were presented: 74% of the banks in Asia thought they over-performed through the crisis whereas 91% of the US banks were under the illusion that they performed well.

But, the reality is just 29% of the clients concurred with this.

The author, Bruce Weatherill, a former PWC consultant and now representing his own firm Bruce Weatherill Executive Consulting, states: “Clients are saying they look for service from life to death to the next generation. Wealth managers are delivering that by changing advisers very frequently moving in and out of markets. They don’t understand to be successful, wealth managers need to provide security, a long term vision and not just transactions.”

As for trust, Mr. Weatherill states that 65% of the wealth managers in Asian banks think their clients see them as “trusted advisors.” 

But, again the clients have a different perspective on this. Only 32% agree with this.

Mr. Weatherill states in the report that “Wealth managers underestimate the loss of trust that has resulted from the credit crunch. They need to recognise the damage and work rapidly to repair it.

There are other statistics around low numbers of loyalty between clients and the wealth managers, disagreements on the clients’ view of performance Vs the banks, Etc.

All of this leads to dissatisfied clients and all in all it is not positive (to say the least).

So much so that many of the clients are switching to other institutions and private wealth management firms.

We all don’t need to have these numbers to recognise that there are levels of denial and a lack of real client focus.

When will the banks and other financial institutions realise that it is time for a change?

Trip Allen, Team Egyii, Singapore

The Kapuas mud snake (Enhydris gyii) is a native of Borneo, and can change its colour spontaneously… Today’s business turbulence is the greatest opportunity of the last five decades. If today’s business leaders can learn to behave more like the the Kapuas mud snake, we might see nothing less than the passing of the ‘Old World’ of business into a ‘New World’ of business.

The Old World of business may have been saying ‘customer first’ and ‘relationship management’, but the truth is that the approach to winning more business never really changed. Sales executives, relationship managers and leaders are still taught that the key to revenue growth lies in going through a ‘scripted process’ that everyone can apply equally effectively. All you really have to do is find out your customer’s recognised and unrecognised needs, present your ‘tailored’ solution, and hey presto!

This approach to business growth is just one symptom of a general malaise where everyone is at the ‘front line’ (whether in product development, operations or sales) rushing to meet perceived customer needs. This rush to perform means that little real thought is given to other, possible underlying drivers of business success which ultimately determine whether these ’front line’ strategies will work. 

For example, a relationship manager in a bank will have been taught a set of behaviours that are predicted to lead to increased investments from customers. These behaviours will probably include questions to ask the customer, ways to gain agreement, and how to present a product solution. But these ‘front line’ behaviours only scratch the surface of the potential relationship between relationship manager and customer. And so the customer leaves the meeting feeling a bit deflated without knowing exactly why. Certainly, the meeting will have made no progress towards establishing trust.

Now is the time to move into the New World of business success and take a step back from this ‘front line’ thinking. Let’s not rush to be at the front pushing, pushing, pushing. Yes, targets are important, but businesses will never reach them from a position of desperation and impatience. It’s not about facts. Facts about what the customer wants. This is easy. No, today it’s about giving the customer what she wants from the very first second she lays eyes on you. These are not facts which can described. They are underlying drivers of human interaction which are working second by second in a dance as the relationship manager leads the customer through a melody of turn-taking. And there’s no end to this dance. It continues through the end of the meeting and into the conscious and unconscious thoughts of the customer all the while she is walking away and going about her business the next day and the next. And if you want to build a relationship of trust and loyalty, you had better make sure this dance continues on and on and on.

So much for ‘scripted’ behaviour. If you don’t enter this dance as a unique individual with your own way of expressing yourself and your own personal way of responding to every tiny signal your customer sends you, then your authenticity will be lost and your customer will be left in neutral about you. And you’d better treat every customer as a unique individual too. No two dances can ever be the same. Each time you engage with a customer you embark on a journey of exploration and discovery. How exciting!

These are things that cannot easily be reported back to a department manager in a weekly submission. They are not easily listed and analysed. But they are the ‘back office’ of business success at the front line. It’s time that business leaders put more challenging thinking into their behaviours – that they stop and try to really understand what drives people, rather than relying on age-old prescriptions that come to them without any effort.

So, welcome to the New World of business. We’ll never regain our customers’ trust if we apply Old World thinking and practices. Those businesses that take a step back, have some patience, and look beneath the surface will find opportunity in abundance in today’s turbulence. Just pay attention to the human being  in human beings for a change, and watch the results roll in.