By David Gwyther, Business Development Director, Butterfield Mortgages Limited
Those of you who work in the financial services sector have no doubt come to the conclusion that COVID-19 has forever changed how our industry operates. Take flexible working as an example. With the majority of businesses managing a remote workforce, employers have had to assess their current working culture and adapt accordingly. What’s more, it looks as though this adaption is by no means a temporary solution, but rather a permanent shift in the way companies will operate post-COVID-19.
With the UK on the brink of a new lockdown, remote working has become a reality until at least the end of the year. An under-reported aspect of this shift, however, is the manner in which it affects the ability of companies to communicate and engage with both new and potential clients. This is particularly true in the financial services sector. For something that was once considered a “supplementary” form of communication to physical meetings, video conferencing tools have become a necessity across our industry. The worry, however, is that such new technological solutions cannot replicate the advantages offered by physical interactions.
The boom of Zoom
No matter the type of organisation, be it brokerages, private banks, large financial institutions, or family planners, video conferencing tools have become the norm for anyone wishing to meet with their clients.
Ideally, all financial service firms should be in regular contact with their clients during these trying times. Unfortunately, recent research by Butterfield Mortgages Limited (BML) has indicated that some groups have struggled to adapt to the shifting demands of the market during the COVID-19 pandemic. Of those we surveyed, 19% of homeowners said they have actively lost faith in their banks due to the poor support they’ve received throughout this pandemic. Additionally, a quarter (25%) felt that their banks have not been sufficiently proactive in providing financial advice in 2020.
Effective client engagement and management
As someone who works within the UK prime property market, I regularly review the current needs and trends affecting high net worth individuals (HWNIs) interested in up-market British real estate.
What I have noticed––especially this year––is that there is a clear best practice when communicating with this specific type of client. Given the often-complicated structure of HWNIs’ financial portfolios, itself accompanied with unique income systems and wealth management needs, this type of client is only keen to work with financiers who they trust wholeheartedly.
This level of trust cannot be achieved overnight. It requires regular and clever engagement on the part of the financial service provider with the view of creating a long-term relationship built on trust and confidence. Then, and only then, will a wealthy individual be willing to engage with a service provider.
Before the COVID-19 pandemic, such methods were normally employed at office meetings, as well as at social and networking events. In other words, physical meetings were integral to such a strategy. But, as I’m sure you’re all aware, such meetings have now been indefinitely postponed due to contagion concerns. Although online solutions have allowed some to go ahead, I believe this to only be a temporary solution and not something that will replace the basic principles of effective client engagement.
The aforementioned BML survey showed that 31% of homebuyers and homeowners were frustrated by the ways their banks depended on automated services. This finding thereby demonstrates the danger in becoming complacent and wrongly assuming that technology will naturally become both the dominant and most effective way of communicating with clients. I do not believe this is the case, particularly when talking about HNWIs.
As I mentioned above, when it comes to HNWIs, the foundational trust associated with physical meetings is vitally important to securing new deals and arrangements.
Once COVID-19 has subsided, I anticipate that our industry will quickly pivot back to physical interactions once again. In the meantime, it behoves us in the financial services sector to explore new and creative ways to engage with one’s clients beyond traditional telecommunication tools.