Sizing up clients' personalities to tailor their banking portfolios

Mr Evrard Bordier, CEO of Bordier & Cie Singapore, says the private bank uses a new system to determine "who you are and what's important to you" in crafting your investment portfolio.
Mr Evrard Bordier, CEO of Bordier & Cie Singapore, says the private bank uses a new system to determine "who you are and what's important to you" in crafting your investment portfolio.ST PHOTO: SEAH KWANG PENG

If boutique European bank Bordier & Cie had its way, private bankers could just as easily be calling clients about the latest fashion collection as about an upcoming initial public offering.

Such an approach would fit into its strategy of understanding clients' personal life goals, which are deeply tied to their investment needs.

The bank is doing just this through a proprietary system it developed that uses algorithms to first understand needs, then map those needs to investment attributes.

Singapore chief executive Evrard Bordier told The Straits Times: "The base of how private banking was set up - on protection and passing over wealth from one generation to the next - is essentially not applicable to everybody.

"It's an old European, conservative way of thinking, which is not incorrect. But the values of people have changed, all over the world. It's not just about saving for their kids; they may not even have kids."

It started using the new system on Jan 1 to determine "who you are and what's important to you".

Bordier & Cie, a Swiss-based private bank, took a year to create it, using research and data culled from 170 years' worth of client information. It provides "topographical descriptions of intrinsic needs, combined with ethnography of relationship banking with high net-worth individuals". "We then superimpose the mapping results onto portfolio management, while also integrating their risk profiles."

It identified different archetypes - such as the "consumer" or "protector" - based on existing clients.

And some traits tend to lend themselves more to Asians, for instance.

Mr Bordier noted: "They are much more of consumers than, say, the Europeans. There's nothing wrong with consuming but we understand the reason why - if you like to be buying brands and acquiring new things.

"From there we know the relationship with the bank is different. You don't want to put the money in the account to just keep it safe. You're putting money in to achieve a certain amount of returns per annum."

Understanding such traits and behaviour lets the banks know how to tailor the management of their clients' assets, he said, adding that private banking can no longer be just about portfolio management.

Take the consumer client, whose portfolio should support his spending needs. "The way we'd manage his account would be based on cash flow, and how much he's making every year to spend it, so his portfolio could achieve 5 per cent per annum and that could go into a special account for him to spend.

"And we'd be able to get him into exclusive Chanel shows."

He added: "We still have the risk assessments and regulatory requirements, which we would combine with the analysis. This proprietary algorithm allows us to create 23,751 unique sets of portfolios."

There are at least five clients who have been "mapped" by the private bank's system, and one new client joined through the new strategy.

Mr Bordier believes such a strategy is not applicable in large institutions because of their customer base but works better for a boutique private bank like Bordier & Cie, which has about 300 clients and 10 relationship managers here.

"For a boutique bank like us, it's achieving what we want, to be tailor-made and consistent in the way we do things."

A version of this article appeared in the print edition of The Straits Times on April 15, 2017, with the headline 'Sizing up clients' personalities to tailor their banking portfolios'. Print Edition | Subscribe