private banking client acquisition business plan

Customer acquisition in banking: 10 proven strategies you should implement right now

Today’s financial landscape is an altogether different place from years past, with the competition between financial institutions becoming more fierce by the day. In an era where your customer’s attention is an increasingly valuable commodity, understanding how to capture and keep the focus on your own products and services is a necessity for survival. In this blog, we’ll explore the challenges and opportunities banks face when it comes to customer acquisition—and show how digital experience intelligence (DXI) provides a deeper understanding of your customers that can help you navigate the ever-evolving financial ecosystem, grow a thriving customer base and maximize returns from existing channels.

Key takeaways

The cost of customer acquisition calls for dependable, proven strategies.

Understanding your customers is key to offering valuable, relevant services.

Digital experience intelligence ensures you avoid common pitfalls, prevent lost sales and create stickier, more relevant products and services.

What is customer acquisition in banking?

In the world of banking, customer acquisition is about attracting new customers who will be a good fit for the products and services you have to offer. Acquiring new customers is a process that intersects with almost every department in your bank, from the marketers who create eye-catching campaigns to draw in new banking customers to the product managers and development teams who craft engaging digital experiences that serve as the platform for your bank. The ultimate goal is to cultivate lasting relationships, ensuring new customers become the bedrock of your success long into the future.

The challenges of acquiring new banking customers

Acquiring new customers comes at a cost for every business, and it’s no different for retail banks. On average, it costs $500 to acquire a new banking customer , meaning those banks that can reduce this cost and optimize their return on investment by increasing customer lifetime value (CLV) will have a distinct advantage in the market.

In addition to bank customer acquisition costs, there are several challenges banks are up against when it comes to acquiring new customers. Keep these in mind as you plan your customer acquisition strategies:

Intense competition. The banking industry is highly competitive, with numerous financial institutions vying for the same pool of potential customers. Standing out amidst the competition is a significant challenge.

Changing customer behavior and preferences. Evolving customer preferences and behaviors, such as a shift towards online and mobile banking, require banks to adapt their acquisition strategies continually.

Customer expectations. Customers expect a streamlined, personalized and digital-first experience. Meeting these expectations while complying with regulations is a balancing act.

Product innovation. Developing innovative banking products and services that resonate with potential customers requires ongoing effort and investment.

Customer acquisition cost (CAC) . As mentioned earlier, acquiring new customers can be costly, from marketing expenses to the resources required for onboarding and customer support.

Retention efforts. While acquiring new customers is important, retaining them is equally crucial. Banks must implement strategies to keep customers engaged and satisfied.

Digital transformation. Adapting to the digital age and offering user-friendly digital platforms is necessary for attracting tech-savvy customers.

Trust and reputation. Building trust in the banking sector is crucial. Concerns about security breaches or unethical practices can deter potential customers from engaging with a bank.

Data privacy. Ensuring the privacy and security of customer data is a top priority. Meeting stringent data protection standards while still offering a seamless onboarding experience can be challenging.

Regulatory compliance. Banks must navigate complex regulatory frameworks, which can pose challenges when onboarding new customers. Compliance requirements may involve extensive documentation and verification processes.

Top reasons customers switch banks

In today’s tech-savvy market, customers are more willing to shop around for the financial institution that fits their requirements—and less likely to stick with a bank that fails to meet those standards. In fact, 37% of banking customers are more likely to switch banks now than they were in the past.

But what is driving retail banking customers to search for new banking pastures? We’ve listed some of the most common reasons below.

1. Data privacy and protection

Earning and keeping the trust of your customers is especially important for banks. In a poll , consumers stated that the protection of their data was the most important factor when deciding to switch their primary bank. Any compromises on this front could cost your bank in lost customers.

2. Online and mobile banking capabilities

The competitive nature of the financial services industry means there is a wide range of banking websites and apps available, each with its own unique features and innovative additions. If your bank’s digital experiences lack the speed or feature-set customers are looking for, they’re likely to find them somewhere else.

3. Poor customer service

Nothing leaves a customer feeling unappreciated like a negative customer service interaction. Whether it’s an unresolved query, a lengthy call queue time, or a feeling of simply not being understood as a customer, these failings can have long-term negative consequences that cause customers to consider other banks.

4. Prices and fees

Savvy banking customers will do their homework to find the most affordable options available, so your rates will need to be competitive. Pricing models that fail to be competitive and transparent could leave customers with a bad taste in their mouths.

5. Not feeling valued

Your customers may consider switching to a competitor if they don’t feel you appreciate their loyalty or understand their needs. A bank that prioritizes building strong customer relationships and attentive customer service threatens to take these customers from you.

6. Inadequate products and services

To retain clients, your bank must continuously innovate and expand its offerings and stay competitive within the market. If your offering is left to grow stagnant, customers may leave as their financial needs evolve.

7. Lack of personalization

Now more than ever, customers expect a high degree of personalization and relevance in their digital experiences. If your bank doesn’t invest in understanding and accommodating individual preferences, it could miss vital opportunities to foster loyalty and risk people switching to a more customer-centric competitor.

👉🏻 For tips on gaining and retaining banking customers, check out the blog Delivering exceptional customer experience in banking: 6 strategies for success .

10 strategies to acquire more bank customers using digital experience intelligence

The most powerful bank customer acquisition strategies are fueled by data-driven insights. Digital experience intelligence provides a deeper understanding of your customer’s needs, wants, preferences and behaviors, driving better decisions that enhance the customer acquisition process. Whether it’s your marketing and outreach or the design and feature set of your mobile or online banking experience, DXI can help you create a seamless, customer-centric acquisition journey that not only attracts customers but also retains them in a highly competitive banking landscape.

Let’s take a look at how DXI can enrich your customer acquisition strategies, resulting in more effective customer acquisition.

1. User behavior analysis

By analyzing user behavior , your bank can achieve a greater understanding of how and why users interact with your digital platforms. It’s easy to identify pain points, optimize user journeys and design more user-friendly interfaces with these insights, ultimately attracting and retaining more customers.

2. Segmentation and personalization

Digital experience intelligence makes it possible to segment your customer base by a wide variety of metrics so you can deliver more personalized and relevant digital experiences to your customers. By tailoring products, services and offers to meet individual preferences, you can enhance customer satisfaction and loyalty.

3. A/B testing and optimization

Experimenting with different elements of your online banking and mobile app experience can help you discover what resonates most with your customers . Refining customer journeys in this way results in more engaging, effective experiences that will attract new customers.

4. Real-time user monitoring (RUM)

A digital experience intelligence platform like Glassbox allows your bank to benefit from real-time user monitoring, ensuring you can detect and resolve issues quickly . Whether it’s squashing technical problems before they escalate or addressing user experience issues promptly, customers will appreciate the smooth, responsive journey your website and app provide.

🔍How does your bank stack up? Check out the Web Performance Index to see how your bank compares to leading financial institutions.

5. Content quality and messaging

DXI plays a crucial role in evaluating the quality and effectiveness of the content found on your banking website or app. With a clear picture of what grabs the attention of your customers, you can prioritize compelling messaging and refine your marketing efforts to appeal directly to your best potential customers.

6. Understand the customer journey

Using DXI, banks can visualize the entire customer journey across digital channels to better understand touchpoints, pain points and opportunities for further optimization and improvement.

7. Gather and implement customer feedback

Collecting customer feedback is essential, but often comes with barriers and friction that limit the volume of feedback you receive. Digital experience intelligence platforms like Glassbox allow you to integrate feedback touchpoints along the customer journey through voice of the customer (VoC) programs, making it easier for customers to share their concerns and suggestions. By listening to and acting on feedback, you can create more customer-centric experiences that make users feel valued and appreciated.

8. Optimize the mobile experience

Mobile banking is more popular than ever, making it essential for your bank to offer a seamless experience in this space. DXI offers insights that are invaluable for highlighting performance or UX-related issues within your mobile app, allowing you to make targeted refinements that will positively impact mobile-first customers.

👉🏻 Get more mobile app optimization tips in the guide 5 Mobile App Optimization Best Practices for Banks .

9. Conversion funnel analysis

Digital experience intelligence platforms allow you to visualize each customer’s journey through the conversion funnel . By tracking each step in an individual’s journey (or viewing thousands of journeys in aggregate), you can see how purchasing decisions are influenced and identify patterns that can be used to reduce drop-offs among new customers.

10. Continuous improvement

As this list has highlighted, DXI ultimately enables your bank to continuously review and refine its digital offering to ensure it remains responsive to evolving customer needs and preferences. By adopting a culture of continuous improvement, you can make sure your products and services continue to appeal to potential customers.

It pays to know what your customers want

Reaching, attracting and retaining new customers is vital for any business, yet the challenge for banks is greater than ever due to heightened customer expectations and the increasing ease of moving to an alternative provider. However, the strategies discussed in this blog show that there is a promising outlook for any bank to create unique, valuable and relevant products, services and digital experiences for their customers.

If you’re interested in implementing these strategies, check out how Glassbox’s rich, data-driven insights can help your bank accelerate the customer acquisition process.

1. What is customer acquisition in banking?

In the world of banking, customer acquisition is about attracting new customers who will be a good fit for the products and services your bank offers.

2. What are 10 customer acquisition in banking strategies?

4. Real-time user monitoring

Lauren Barber

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Business Acquisition Plan: What to Include in 2024 (+ Template)

Kison Patel is the Founder and CEO of DealRoom, a Chicago-based diligence management software that uses Agile principles to innovate and modernize the finance industry. As a former M&A advisor with over a decade of experience, Kison developed DealRoom after seeing first hand a number of deep-seated, industry-wide structural issues and inefficiencies.

A business acquisition plan is an important component of planning for an M&A transaction, regardless of whether you require external financing. A solid business acquisition plan should lay out the rationale for the investment, and how it will add value for the entity. In this article, FirmRoom takes a closer look at how these documents should be crafted.

Understanding Business Acquisition Plan

A business acquisition plan is a strategy document, which serves the purpose of a business plan for an M&A transaction.

It outlines the motives behind a transaction, profiles of the companies involved in the transaction, how the transaction will generate value for the entity which is driving it, how the two companies will be integrated, and how the merged company (or simply acquired company in the case of an investment firm acquiring a company) is expected to perform.

Reasons to Have a Business Acquisition Plan

An acquisition plan provides its users with a roadmap to making the transaction a success. Even before the transaction is initiated, it acts as a reminder to the sponsors, what they’re looking for, why they’re looking for it, and how they’re going to ensure that the transaction is a success.

In general terms, the reasons to have a business acquisition plan are:

Strategic alignment

The overriding goal of a business acquisition plan, as the opening text alludes to, is strategic alignment: ensuring that those undertaking the deal, for lack of a better expression, ‘stick to the plan’, around the motives and means for making the deal a success.

Valuation and pricing

The plan should include strategies and methodologies for valuing the target company. It should guide the deal participants on how to determine a fair value for the target, assess synergies, and estimate future financial returns. It also sets a limit on how much the company can extend itself financially for a deal to occur.

Financing and resource allocation

Financing (sources and uses of funds) is just one part of the resource allocation conundrum. The business acquisition plan also outlines the working capital needs, who works where, how expenditures are going to shift, what capital assets are required, and more.

Business Acquisition Plan Template

The insight that FirmRoom has gained from working with hundreds of companies on thousands of transaction, have been collated in a business acquisition plan template.

This provides a detailed roadmap of what should be included in an effective business acquisition plan, ensuring that its users have everything in place for the conclusion of a successful transaction.

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Creating a Business Acquisition Plan Step-by-Step

While developing a business acquisition plan is recommended, having an ineffective acquisition plan is worse than having none at all.

The document has to be watertight, creating no doubt in the reader’s mind about the benefits of an acquisition.

A strong business acquisition plan should make the reader think that it makes far more sense to go ahead with the transaction than for the company to continue in the status quo.

That being said, the following should only be seen as a rough step-by-step guide to putting together a business acquisition plan:

Strategy development

Best practice:

• Identify where the company wants to be in each of the next five years, possibly on a month-by-month basis, and how it plans to get there. See here for example.
• Identify the key performance indicators that need to be tracked to ensure that the company meets these objectives.
• Based on both of the above, ask whether an acquisition is a crucial part of the company achieving those objectives, before moving forward.

Identifying and evaluating target companies

• Understand where the companies that fit into the strategy will be found , and be thorough and objective in the search for them.
• Be realistic about the companies that can be acquired/merged with, including valuations ,  so as not to waste resources for other companies and your own.
• Remember that just because a company is the only one that’s available, it doesn’t mean that a transaction is a good idea.

Due Diligence

• Use technology ; any M&A practitioner that decides against using a sound technology platform for due diligence is doomed to failure.
• Adopt a mindset where due diligence is considered an investment in the acquisition, rather than a cost to your own company;
• Do not fall for the M&A acquirer’s fallacy of ‘we’ve come this far, so we can’t go back.’ If due diligence says the deal isn’t right, it isn’t.
• Begin the post-merger integration phase as soon as the deal begins to look like a realistic possibility (something which DealRoom is designed to cater for).

Deal structure and negotiation

• Leverage the findings of due diligence to create a more informed negotiation process.
• Remember that there will be back and forth with the seller, and they can be reasonably expected to overvalue their asset.
• Consider all market outcomes (i.e. downturns, current value of stock vs. future value, etc.) when creating an offer. Avoid irrational exuberance.

Post merger integration (PMI)

• Keep in mind at all times during the PMI phase that this is where most of the value can be generated and lost in a transaction.
• As mentioned, begin the process as soon as possible. If the transaction is visible on the horizon, you need to start thinking about its integration.
• Don’t write this off as a ‘soft’ or unnecessary part of the transaction - it won’t be soft when it impacts on your income statement.

Common mistakes to avoid when writing a business acquisition plan

Despite plenty of advice to the contrary, enthusiastic CXOs often write acquisition plans which fail to avoid the pitfalls.

These are among the most common:

Putting the acquisition before the strategy

The acquisition is part of the overall strategy, not the other way around. Companies that are approached by others about a deal, and then somehow convince themselves that there is a strong rationale for a deal, fall foul to this backwards logic.

Management hubris

M&A is an area ripe with management hubris (take a glance at Google Scholar at all the academic texts that link the two). That means management hubris inevitably finds its way into business acquisition plans. Avoid it at all costs - it’s a highly costly behavioural pattern for companies of all sizes.

Lack of detail

The business acquisition plan is a strategy document, not a marketing one. That is to say, it should break down in a step-by-step fashion how the deal will generate value. The more detailed the better. “Creating an outstanding organization” is great, but writing it in the business acquisition plan won’t add any value.

Business acquisition plan template

A business acquisition plan is a hugely worthwhile document that all M&A practitioners should write in order to discern the value of a transaction and how that value can be extracted. It is the business plan for an M&A transaction.

Get your free template below to receive guidelines on how to create the document and make it work for your transaction.

Frequently Asked Questions (FAQs)

Successful acquisition starts with a great plan

Get your roadmap for precise valuation planning to due diligence checklists and synergy tracking. Close deals faster, smarter.

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Customer acquisition for the bank of the future

When it comes to digital culture shocks, they don’t come much greater than that experienced by the gentleman pictured below in recent years. For what seems like an eternity, the traditional banker has had the run of a financial sector dominated by a handful of big players who thrived on restrictive barriers for anyone else wanting a seat at the table. While some smaller banks and credit unions managed to grab a foothold on the ladder, many came and went as customers continued to flock to the financial security offered by the multibillion-dollar monoliths known as ‘the big banks’.

Well, times have changed for our friend in the top hat. While traditional banks continue to dominate the market, an increasing number of consumers  are embracing digital or neobanks and other fintech companies for both basic banking activities in addition to other value-add services. This is particularly common among digitally savvy younger generations, who may never set foot in a physical bank branch given their preference for real-time, 24/7 solutions over traditional, fully fledged banking products. With one study finding 46% of people exclusively use digital channels for their financial needs, it is little wonder fintech is among the fastest growing industries in the world.

The pressure for traditional banks to respond to such change is immense. PWC has reported that 88% of incumbent financial institutions believe part of their business will be lost to standalone fintech companies in the next five years. Agility is the key and fintech companies hold the upper hand on that front. Given their monolithic legacy systems and a reputation for slower innovation, 81% of banking CEOs are understandably concerned about the speed of technological change.

The modern financial environment is one where traditional banks battle for market share with unknown digital or neobanks and fintech brands that can register a few million downloads before incumbents even work out how they did it. It is a world of open banking and marketplace banking, where online-only banks can successfully compete for customers with those built on decades of tradition.

And that is why it should come as no surprise that a 2020 global survey found 75% of banks are investing in developing a more customer-focused business model to give them the opportunity to act on their clients’ needs in real-time.

Current trends in banking world

Global professional services network Deloitte summed it up best when they wrote: “The bank of the future will not succeed without a smart, cost-effective (customer) acquisition strategy, whilst also delivering trust and awareness.”

A key component of this transition for legacy banks is developing and leveraging digital platforms as a new go-to-market strategy, which will help ensure they are not tied to the constraints of a traditional operating model that relies on a physical network of branches. While the big banks could previously afford to hold off on updating their long-proven systems, their siloed structure is not suited for the digital age.

Change is clearly afoot though, with 77% of incumbent financial institutions declaring they will increase their focus on internal innovations in the next three to five years to boost customer retention. Many traditional banks are pursuing an array of digitization and innovation initiatives to ensure a customer-centric perspective rather than their traditional emphasis on product. By embracing cutting-edge technologies such as augmented reality, blockchain, robotic process automation(RPA) and artificial intelligence (AI), they are giving themselves every chance to keep pace with their more agile online-only competitors.

As traditional institutions, newcomers and fintech companies strive to become ‘banks of the future’, they should consider leveraging current trends including:

Customer experience

Personalization, voice-based technology, choice of products, customer acquisition tips for the new world of banking.

The modern banking customer journey does not begin and end at a branch location, with the most successful customer acquisition strategies based on multiple touchpoints, diversification and personalized methods of engagement. To bolster bank customer acquisition, consider these cost-effective tips.

Leveraging social media

Prioritizing reviews management, embracing omnichannel, embedding a service culture.

It has never been more important for the banking and financial sector to create and roll out plans that facilitate seamless experiences for their customers. Learn how to achieve such success in the omnichannel space .

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Home » Innovation & Digital » Digital acquisition of new customers in private banking

Digital acquisition of new customers in private banking

By Axel Sarnitz , Markus Bräckle  , Alesia Prytulchyk , Daniel Härter , Elias Winter

• Reading time: 4 minutes

Transparency about the target group

For years, private banking providers have been facing the challenge of attracting new customers in order to counter industry-wide cost pressures, margin erosion and market dependency on AUM growth. To acquire new customers, the focus so far has been on personal recommendations and analog channels (golf tournaments, horse shows, cooking events, concerts, etc.). These marketing tools are sometimes very costly. However, they do build trust and promote a positive brand perception.

It only takes a quick look at the private customer segment in retail banking to realize that digital advertising has been very effective in attracting new customers for some time now (examples include Revolut, N26 and Comdirect). However, most private banking providers have not yet tested any digital approaches for addressing potential new customers, as they often assume that this would make their products seem less exclusive and not appeal to an older and less digitally savvy target group.

Which media are particularly suitable for approaching private banking customers digitally?

The evaluation of various studies on digital usage behavior in Germany shows that almost the entire target group relevant to private banking is actively using the Internet. An online survey conducted by the German public broadcasters ARD and ZDF reveals that around 95% of the 50–69 age group and around 78% of the 70+ age group use the Internet regularly.

Based on a daily Internet usage of more than 15 minutes, four relevant media for digitally addressing private banking customers can be identified:

• social networks,
• online news,
• shopping websites
• and search queries.

It should be noted that digital individual communication channels (e-mail/instant messaging services) are not included in this list, as they are less accessible and therefore not suitable for commercial advertising purposes.

Due to the high number of daily users and the possibility to identify target groups, social networks are particularly suitable for digital approaches. Due to their large, intergenerational reach, social networks such as Facebook and Instagram are particularly attractive and should be preferred over career networks, such as LinkedIn, with a smaller and less diverse target group. Moreover, Facebook and Instagram allow for the target group of the advertisement to be adjusted based on selection criteria such as age, place of residence, etc. It is also important to consider the image and the target audience of the respective platform (TikTok and Twitch, for example, have rather specific target groups).

Based on the assumption that the target group follows the behavioral patterns of its comparable age cohort and has an average of two people per household, the analysis of usage rates suggests a daily reach of around half a million users in Germany. This corresponds to around 50% of the total private banking target group. It becomes clear that potential customers can be approached in numerous ways in the digital environment that many of them already use.

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Methods and effectiveness

Digitally savvy private banking customers can be identified through ad targeting. This can be followed by a targeted approach via selected media. Digital media have several advantages over analog media: they allow highly accurate measurement of campaign effectiveness, real-time optimization of individual advertising campaigns (change of medium, time, frequency and content) and effective targeting. The latter is characterized by high cost efficiency as there is hardly any waste circulation: the target group can be defined, delimited and targeted very precisely.

But where exactly is the sweet spot for digital customer communication to unlock its full potential?

The prototypical decision-making process of customers often follows the so-called AIDA approach. AIDA stands for the individual decision-making phases, namely attention, interest, desire and action.

Digital advertising follows this schematic decision-making pattern and is therefore suitable for addressing private banking customers. The primary goal should be to initiate contact and generate traffic on the provider’s landing page, which should contain relevant information and enable direct contact via phone/video/chat with relationship managers as well as digital contract conclusion. The added value of digital communication and the landing page for private banking providers therefore mainly results from spontaneous conversations and product sales.

What might a successful use case for digital customer acquisition look like for private banking providers? Answers to this question can be derived from successful D2C (direct-to-consumer) approaches from other industries. Products that can be successfully advertised and sold through digital channels are characterized by the following attributes: high emotionality, positive connotation of terms (well-being, health, fitness, environmentally friendly means of transportation, etc.), high utility/quality, and online availability.

The needs of private banking customers, such as investment, family, passion or retirement, can be translated into a wide range of products that are suitable for meeting customer needs in the digital environment. In particular, Internet banking products, such as robo-advisors, thematic (e.g. sustainable) investments or a financing plan for the dream vacation home abroad, meet the above attributes. So does digital communication about exclusive investment opportunities, such as private equity or onshore wind farms.

What are the key success factors of the digital customer approach?

In the past, zeb has helped many of its clients leverage the success potential of the use cases described above by supporting the development of digital application processes that generate traffic on the landing page and thus enable conversion rates in the high single-digit percentage range.

Key success factors were zeb’s expertise both in banking and in technical solutions. For one thing, these projects required a deep understanding of competitively differentiating customer experiences and broad expertise in all relevant banking topics. For another, the ability to fully implement digital solutions with professional UX design (see Figure 2 ), from development to operation and scaling, was a crucial factor.

Internet usage by the private banking target group has increased very strongly in recent years. Digital channels are therefore the ideal solution for addressing and attracting new customers. Products with strong emotional appeal, clear benefits and full online availability are particularly suitable for this purpose.

When it comes to implementation, it is important to combine banking knowledge with technical solution expertise. And to make the whole thing even more successful, it should not be the sole aim of digital communication to address today’s private banking customers, but also attracting future ones.

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Axel Sarnitz

Markus Bräckle 

Alesia Prytulchyk

Daniel Härter

Elias Winter

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10 Client Acquisition Strategies for Financial Advisors

In the dynamic world of finance, acquiring new clients is a fundamental step to success for any financial advisor. A robust strategy for client acquisition for financial advisors can truly be a game-changer, allowing advisors to secure potential clients effectively and thus, significantly grow their business.

Financial professionals recognize that to elevate their practice, developing meaningful relationships with clients is key. They understand that adding new clients doesn’t just add to the numbers; it is also pivotal to enhancing the bottom line and ensuring the long-term viability of their practice. 

A successful client acquisition strategy is not just about increasing quantity but also about improving quality, ensuring that each new relationship adds substantive value to the business.

This article will explore various strategies that can aid financial advisors in acquiring new clients efficiently, without compromising the professional rapport and trust that are essential in this field.

1) Leverage Your Existing Networks

Financial planners often overlook the wealth of opportunities present within their existing networks. A well-established network can serve as a powerful tool for financial advisor lead generation, allowing advisors to connect with prospects they might not meet otherwise.

Leveraging existing relationships is about tapping into connections already made, perhaps from previous roles, educational experiences, or mutual connections. By nurturing these relationships, financial advisors can create a ripple effect, reaching potential clients who are already somewhat familiar with their work or who can be introduced through a trusted intermediary.

Engaging with your network doesn’t have to be overtly promotional. It can be as simple as checking in, offering help or advice, or sharing useful information. Such interactions can reinforce your reputation as a helpful and knowledgeable advisor and can lead to new client relationships, thanks to the inherent trust built through existing connections.

In essence, by strategically leveraging existing networks, advisors can connect with prospects more personally and efficiently, opening doors to opportunities that can greatly benefit their practice.

2) Make Sure Your Website is Search Engine Optimized

Having a great website that’s search engine optimized is a powerful tool in lead generation for financial advisors. It’s not just about having a website; it’s about having one that works for you, drawing in potential clients and showcasing your expertise.

• Focus on User Experience: Make your website easy to navigate, with clear calls to action and concise, compelling content. This encourages visitors to explore and contact you.
• Provide Valuable Content: Regularly update your site with insightful articles, tips, or resources. This not only builds your authority but also improves your site’s SEO, making it easier for potential clients to find you online.
• Utilize Keywords and SEO Best Practices: Incorporate relevant keywords related to financial advising and optimize meta descriptions and title tags. This enhances your visibility on search engines, increasing the likelihood that potential clients will land on your site.

By enhancing your online presence and optimizing your website, you ensure that your marketing efforts are more likely to convert website visitors into clients, ultimately growing your business.

3) Utilize Content Marketing

Creating informative blog posts is a key strategy for client acquisition. It's more than just writing—it's about sharing valuable information that can help potential clients and build trust.

• Share Helpful Tips: Offering tips for financial advisors and potential clients on managing finances or market trends can position you as an expert in your field. People are more likely to trust and choose someone who openly shares their knowledge.
• Regularly Update Content: Keep your content fresh and relevant. Regular updates show that you are active and engaged in the financial world, which can attract more visitors to your site.
• Make it Engaging: Write in a friendly and approachable tone. Use real-life examples and keep the jargon to a minimum to ensure your content is accessible to a wide audience.

Remember, content marketing is not just about quantity but quality. Providing valuable, understandable, and relevant content can significantly enhance your reputation and client base.

4) Cultivate a Strong Presence on Social Media Platforms

Utilizing social media marketing is crucial in today’s digital age. It’s a dynamic way to stay connected with existing clients and reach potential ones.

• Be Active and Present: Post regularly to maintain visibility. Share updates, interesting facts, or articles related to finance. Respond to comments and messages in a timely manner, showing your audience that you are attentive and available.
• Share Your Knowledge: Providing snippets of financial advice or answering common finance-related queries can establish your reputation as a knowledgeable and helpful advisor.
• Use Various Platforms: Don’t limit yourself to one platform. Explore Facebook, LinkedIn, Twitter, and Instagram to maximize your reach and find where your potential clients are most active.

Remember, consistency is key in social media marketing. Regular, informative interactions can build lasting relationships and turn followers into clients.

5) Host Networking Events for Ideal Clients

Hosting a networking event can be a fun and effective way to meet new people and potential clients. It's like throwing a party but for business!

• Choose a Fun Theme: Pick a theme that makes people excited! It could be as simple as a summer barbecue or a fancy wine and cheese night.
• Invite a Mix of People: Mix it up! Invite folks you know, like current clients and friends, but also ask them to bring people you haven’t met. This way, you’ll get to know more people.
• Be a Good Host: Make people feel welcome. Smile, chat with everyone, and introduce people to each other. Remember, the goal is to make new friends who might need your help one day.
• Talk Less, Listen More: People love to share their stories. Ask questions and listen more than you talk. It helps in understanding what they need and how you might be able to help them.

Remember, the aim is to create a relaxed environment where people can enjoy themselves while getting to know you and what you do. It’s about making friends first; business can come later!

6) Implement a Referral Program

Implementing a referral program can work wonders for acquiring new clients. It’s like your clients doing the talking for you, telling their friends about your awesome services. To thank them, you can give out some nice rewards.

• Set Up a Simple System: Choose a system that tracks who brought in who.
• Decide on Rewards: Could be gift cards, service discounts, or a heartfelt thank you card. What would your clients appreciate most?
• Manage Costs: Whether it’s $50 per new client, a bit of your time, or the price of a thank you card, the price is well worth the lifetime value of a new client.
• Spread the Word: Tell all your clients about the new program, maybe through an email or in person.
• Keep It Simple and Exciting: Make the rules easy and the rewards exciting.

Keep your clients happy, and they'll likely introduce you to potential clients, expanding your network!

7) Offer Free Financial Advice Workshops or Webinars

Hosting workshops is another solid way to attract new clients. It lets you showcase your knowledge and connect with people who are eager to learn.

• Pick Relevant Topics: Choose subjects that resonate with your target audience, like retirement planning or investment strategies.
• Promote Widely: Use your social media, email lists, and word of mouth to get people in the door.
• Engage Your Audience: Keep things lively and interactive. Encourage questions and discussions.
• Follow Up: After the workshop, send a thank-you email and ask if attendees have any more questions or if they’d like to schedule a one-on-one.

Not only do workshops help in establishing you as an authority in your field, but they also create an environment where potential clients can see your expertise in action!

8) Use Paid Advertising for Your Target Market

Investing in paid advertising can be highly effective in attracting the right kind of clients.

• Identify Your Market: Know who you want to reach. Is it young professionals? Retirees? Tailor your ads to speak their language.
• Choose the Right Platforms: Different demographics prefer different platforms. Find out where your target market spends most of their time online.
• Set a Budget: Decide how much you’re willing to spend to acquire a new client, and stick to your budget.
• Monitor and Adjust: Regularly review the performance of your ads. If something isn’t working, don’t be afraid to tweak it or try a new approach.

Remember, the key is to reach your target audience where they are, with messages that resonate with them!

9) Ask (Satisfied) Clients for Reviews and Testimonials

Positive reviews and testimonials from satisfied clients can significantly enhance your credibility and attract new clients.

• Make it Easy: Ask happy clients if they’d be willing to write a review or testimonial and make the process as simple as possible for them.
• Use Multiple Platforms: Encourage clients to leave reviews on various platforms like Google, Yelp, or your business’s Facebook page, where potential clients are likely to see them.
• Highlight Benefits: Remind clients how sharing their positive experiences can help others find the financial guidance they need.
• Express Gratitude: Always thank clients for their time and effort in sharing their experiences, regardless of the platform they choose.

Incorporating testimonials into your marketing strategy can act as a powerful endorsement and bring in more potential clients.

10) Use a Lead Generation Service

When it comes to financial advisor prospecting, having a high-quality lead generation service can be a game-changer in acquiring new clients.

• Evaluate Quality: Not all lead gen services offer the same value. It’s crucial to choose one that provides verified and exclusive leads to ensure the time and effort invested convert into meaningful client relationships.
• Opt for Excellence with Planswell: For advisors seeking top-notch service, Planswell delivers . Providing a consistent pipeline of SMS-verified, exclusive prospects in real time each month, it stands out as a superior choice in the market.
• Focus on Conversion: With a reliable stream of quality leads, advisors can focus more on converting prospects into clients and less on finding them.
• Enhance Efficiency: A quality lead gen service allows financial advisors to optimize their time, focusing on serving clients instead of worrying about finding them.

Choosing a reputable lead generation service like Planswell enables financial advisors to streamline their client acquisition process efficiently and effectively.

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How To Write an Acquisition Business Plan

In the world of business, acquiring another company is a bold move. It’s a venture filled with both opportunities and risks. To navigate this complex journey successfully, you need a well-structured acquisition business plan. This isn’t just any document; it’s your guiding star, your blueprint, and your key to making this business acquisition a triumphant success.

Acquiring a business is no small feat. It’s a defining moment in the life of any company, and the acquisition business plan is the compass that will lead you through this challenging journey. In this guide, we will not only emphasize the significance of having a comprehensive plan but also provide you with an in-depth understanding of the critical elements that should be present in your plan.

What is Acquisition Planning?

How to create an acquisition business plan step by step, start with an executive summary, get to know your company, understand the industry, evaluate the target business, lay out your acquisition strategy, your marketing and sales game plan, crunch the numbers, deal with potential risks, navigate legal and regulatory matters, meet the team, merger and acquisition business plan template, optimizing a business acquisition plan with structured processes, making it work together, sharing the secrets, one size fits all, more bang for your buck, what makes you special, the big picture.

Acquisition planning is a structured process for identifying and acquiring goods or services to meet an organization’s needs. It is a critical part of the procurement process, as it helps to ensure that the organization gets the best value for its money.

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The executive summary is like the opening scene of a blockbuster movie – it sets the tone and captures the audience’s attention. It’s a concise yet impactful overview of your acquisition strategy. This section serves as the very first impression potential investors and partners will have of your plan.

In your executive summary, include key highlights such as the purpose of the acquisition, the target business, and the expected benefits. Remember, it should be captivating, informative, and compelling.

In the ‘Get to Know Your Company’ section, you provide an extensive profile of your own organization. This is your opportunity to showcase your strengths, experience, and financial stability. It’s essentially the part where you introduce yourself before a crucial presentation.

Outline your company’s history, achievements, and expertise. Explain why your company is the right entity for this acquisition. Make sure to instill confidence in the minds of your readers and potential stakeholders.

An acquisition is not just about buying another company; it’s about entering a new landscape. Understanding the industry in which your target business operates is crucial.

Here, you need to delve deep into the industry. Share insights about market trends, potential for growth, and any challenges that might be on the horizon. This section serves as evidence that you’ve done your homework and are prepared for what lies ahead.

Let’s talk about the business you plan to acquire. In this part of your business plan , it’s your chance to discuss the target business in detail. This includes its history, financial performance, and the assets it brings to the table.

Highlight the aspects of the target business that are promising, and also acknowledge where improvements can be made. This demonstrates your realistic approach and your clear vision for the future.

This is where you outline your plan for acquiring the target business. Your strategy should include the deal structure, financing details, and a clear timeline. Explain how you intend to integrate the newly acquired business into your existing operations seamlessly.

In this section, it’s essential to exhibit your strategic thinking and your ability to execute the acquisition effectively.

Once the acquisition is complete, what’s your strategy for marketing and selling? How will you use this new addition to your portfolio to grow your customer base and, consequently, your revenue?

This part of your plan should outline your marketing and sales strategies post-acquisition. It’s the place to showcase your vision for the future and your ability to drive results.

This is where the hard numbers come into play. Provide detailed financial projections, including income statements, balance sheets, and cash flow forecasts. These projections should offer a clear picture of the expected financial benefits of the acquisition.

These figures are not just dry statistics; they are the financial backbone of your plan, demonstrating the potential return on investment.

Every business venture comes with its share of risks. In this section, you should identify potential risks associated with the acquisition and explain how you plan to address them.

This shows your meticulousness and your commitment to risk mitigation, which is crucial for building trust and confidence among your stakeholders.

Acquisitions often involve complex legal and regulatory matters. It’s essential to discuss these aspects in your plan. If there are compliance issues, explain in detail how you intend to address them.

This section assures your readers that you’re well-prepared to navigate the legal intricacies involved in the acquisition.

A successful acquisition is a team effort. Introduce the key players involved in the acquisition and explain their roles. Highlight their experience, qualifications, and achievements.

By showcasing the strength of your team, you demonstrate that you have the right people in place to execute the plan effectively.

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Grab our Merger and Acquisition Business Plan Template to make your merger or acquisition journey smoother. This template is packed with key sections and detailed insights, ensuring you cover all aspects of your acquisition strategy. Let this template be your roadmap as you navigate the complexities of business acquisitions. Start your journey toward a triumphant merger or acquisition business plan today! Download M&A Business Plan Template

Crafting a business acquisition plan isn’t just about signing papers; it’s about blending smart strategies that supercharge success. By weaving organized methods into this plan, you’re making sure that the merging companies don’t just coexist but flourish together.

Think of it as putting puzzle pieces together. Show how a carefully planned approach isn’t just about buying a company; it’s about merging their ways of doing things into a cohesive strategy. This part is about combining different systems, rules, and methods smoothly.

Talk about finding and using the best ways of doing things from the company you’re acquiring. Explain how mixing their successful methods with yours makes everything run smoother and more efficiently.

Show why having a set way of doing things helps. Discuss how having consistent methods, from handling money to everyday tasks, helps the new company grow without unnecessary overlaps.

Explain how having a well-thought-out plan gets you more than just a new company—it increases your profits too. Highlight how bringing in smart strategies boosts how well the business works and makes it stronger.

Talk about the advantage you have—the ability to look at different ways companies work. Explain how this helps you find and use the best ideas, making all your businesses better.

Wrap it up by saying this plan isn’t just a bunch of papers—it’s a map to a successful future. It brings together the best parts of different companies, wipes out any problems, and sends everyone toward success.

In the concluding section of your plan, summarize the key points. Emphasize the potential for success that your acquisition business plan represents. Leave your readers with confidence in your approach and a sense of optimism about the future.

In conclusion, an acquisition business plan is more than just a document; it’s the heart and soul of your acquisition strategy. A meticulously crafted plan, like the one described here, can be your key to not only a successful acquisition but also a confident and prosperous future in the complex world of business acquisitions.

By following these steps and adding depth to each section of your plan, you can create a compelling narrative that instills trust and confidence in your stakeholders. This detailed roadmap will position you to excel in the intricate and rewarding realm of business acquisitions.

What is acquisition in business strategy?

An acquisition is a business deal where one company acquires and assumes control of another company. These transactions are a fundamental component of mergers and acquisitions (M&A), which represents a professional field in corporate law and finance centered on the acquisition, sale, and merging of businesses.

What is acquisition in business example?

An acquisition is a business deal in which one company obtains companies, organizations, or their assets in exchange for some form of consideration from another company. Examples of such transactions include Google’s purchase of Android for $50 million in 2005 and Pfizer’s acquisition of Warner-Lambert for $90 billion in 2000.

How do I prepare my business for acquisition?

• Perform an internal audit.
• Establish a well-organized company structure.
• Tidy up your financial statements.
• Renew your most crucial contracts.
• Create a strategic plan for the next five years.
• Address any pending legal and tax matters.
• Optimize your business operations.
• Ensure you have a top-notch team in position.

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Business Acquisition Plan Template

Our comprehensive template provides you with actionable insights on valuation metrics, due diligence checklists, synergy tracking, and much more. Plus, master SMART objectives, risk mitigation, and seamless integration—download now and navigate your acquisition with confidence.

What are the benefits of using this template?

Excel Export/Import

Export this template to Excel with just one click. Also, Import your Excel spreadsheet easily - turn it into a nice dealroom.net board.

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The tasks tracker is integrated with the virtual data room, so you can start collecting documents right away.

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Track your projects progress from start to finish, know if a task is stuck or behind schedule.

Eliminate Excel trackers, emails and disconnected tools with DealRoom

Our "Business Plan for an Acquisition" template includes guidelines for creating a business plan in preparation for an acquisition. This template goes over categories such as:

• market analysis
• external environmental analysis
• acquisition plan
• financing plan
• integration plan

What Tasks does the 

What is due diligence.

Due diligence is a critical aspect of any deal that begins very early in the process and can continue right up until closing. During due diligence, the potential buyer asks questions and requests documentation from the seller that helps the buyer understand the target company and its business. These requests are usually general to start and become more specific as the buyer develops a greater understanding of the target. Buyers use the information provided by the seller to evaluate the opportunities and risks associated with the potential transaction. It is important for sellers to stay organized throughout the process. Buyers often submit thorough, detailed request lists that require input from numerous members of the seller’s deal team.

What is a due diligence checklist?

As the name implies, a due diligence request list is a list of questions and requests for information and documentation that a buyer submits to a seller in order to learn about the target company, its business and its operations. The initial diligence request list tends to be broad and typically includes an extensive list of questions covering a wide range of subjects. This allows the buyer to gain a broad understanding of the target company and identify key issues that can be investigated and considered more closely. Because every deal is different, due diligence request lists have to be tailored to meet the needs of the buyer and address the unique circumstances of your transaction. However, there is a variety of fundamental requests that are relevant in most deals. These are the types of requests that our templates are designed to address.

What Questions Does the Master Due Diligence Questionnaire Include?

Key considerations when using our m&a due diligence template.

Our templates are drafted to provide an inclusive and wide-ranging list of initial due diligence requests. However, the templates, as well as the information contained therein, are not legal advice. They are not complete, and they are not specific to your transaction. The templates are designed to elicit general information from the seller that will provide the buyer with a broad overview of the target and it’s business and operations. You should review any template before using it, and it may need to be modified to ensure that it is suitable and relevant to your circumstances. Information provided by the seller will likely trigger additional questions that focus on specific aspects of the target’s business and issues identified during the due diligence process.

Are the requests in the template comprehensive?

No. Our Due Diligence Checklist is drafted to include typical requests that are relevant in most transactions. However, every deal and every target company is unique. Before utilizing any template, it is important that you review it with the help of your legal and other professional advisors to ensure that the requests are complete and tailored to the specific circumstances of your deal.

How to use the template with Dealroom

• Start 14-day Free Trial of DealRoom and sign-up
• Select a Master Due Diligence Template while creating a new room
• Start assigning, adding to, and completing due diligence requests with needed documents by uploading them into the built-in virtual data room. The Requests tab is automatically populated with the requests from the due diligence template.

Can I change requests in this checklist or add new?

Every M&A process is different. Downloaders are urged to make these checklists their own by changing the providing information to better fit their needs.

Does this questionnaire provide all the necessary integration information?

This checklist was created by and for M&A professionals. It includes a comprehensive starting point for the integration process. However, every deal is different and may require additional requirements and tasks.

How to use this template with DealRoom?

• Select an Integration Template while creating a new workspace
• Start planning, assigning, adding to, and completing integration tasks. The Requests tab is automatically populated with the tasks from the integration template.

Download your free template by simply filling out the form below

Utilizing a checklist is just step one. In order to have a seamless process, M&A checklists need to be utilized with the proper deal workflow tool.

‍ Request a demo to learn how you can turn a checklist into an automated process and workflow with the DealRoom platform. With DealRoom, you can tackle any type of due diligence.

How DealRoom can help you execute due diligence

By using our master due diligence template, alongside DealRoom’s M&A lifecycle management software, you can create a smooth diligence process.

How DealRoom can help you execute integration

By using our integration template, alongside DealRoom's M&A lifecycle management software, you can create a smooth integration process

With this solution you’ll receive:

Professional template, a built-in data room, project management capabilities, collaboration tools.

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More templates, master due diligence playbook, m&a nda template, venture capital due diligence playbook.

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European private banking: Resilient models for uncertain times

The arrival of the COVID-19 pandemic called for new ways of doing business—remote service for clients and working at a distance for most bank functions. As in other industries, banks suddenly redrew their technology plans, raising spending levels and accelerating the adoption of advanced methodologies.

About the authors

This article is a collaborative effort by Sid Azad , Cristina Catania , Marius Huber, Sebastien Lacroix , Jan Quensel, Frédéric Vandenberghe , and Christian Zahn , representing views from McKinsey’s Wealth & Asset Management service line in Europe.

The need to realign operating models to this superior level of technology has intersected with a reversal in private banking economics. For the preceding decade, the industry enjoyed the tailwind of rising financial markets, supported by favorable governmental policies and low interest rates, and achieved a long string of record highs in assets under management (AUM), revenues, and profits.

The favorable operating environment has shifted, however, putting at risk the growth private banks had achieved and gradually reducing their profitability. Firms therefore need to reexamine their operating models, taking advantage of new technologies, while preparing to navigate an uncertain macroeconomic outlook and further changes in client needs.

McKinsey’s 2022 survey of European private banks 1 McKinsey Private Banking Survey 2022 for Western Europe. Includes Austria, Belgium, France, Germany, Italy, the Iberia region, Luxembourg, Monaco, Netherlands, the Nordics region, Switzerland, and the United Kingdom (n = 109). —the latest in a series that has been conducted annually since 2003—reviews the recent financial results of over 100 institutions, gathering details on the surprisingly strong results that led to a record year for 2021 and the rapid adjustments to the more volatile markets that characterized the first half of 2022.

Based on the surveys taken between 2017 and 2021, we have also identified a set of business and operating factors shared by top-performing institutions. These six factors are related to the profitability of products and client segments and the management of relationship managers (RMs), costs, and operating scale. Institutions that successfully exploit these factors enjoy significantly greater profit than banks that do not. Banks can navigate in these uncertain times by focusing on improving resilience through these factors with a strategy that will depend, as always, on each bank’s current position.

Whether European private banks follow new approaches or stick to established models, all will need to undertake transformations. The current challenges of volatile markets and the longer-term changes in how to best serve clients call for nothing less.

Uncertain times: An acceleration of change in private banking

The private banking industry in Western Europe has evolved in numerous ways over the last decade, including a decline in brokerage and retrocession revenue margins brought on by new regulation, 2 For example, European Banking Authority (EBA) stress tests pertaining to capital and liquidity management, the Markets in Financial Instruments Directive (MiFID) covering compliance and client protection, and the General Data Protection Regulation (GDPR) on accounting and reporting. and growth in net new business—for example, from investors based in Asia.

Today, Europe’s private banks are facing upheavals in the economic, political, and technological environments even as customer needs are shifting. The most severe disruption in the political environment has been associated with Russia’s invasion of Ukraine. In the financial markets, rising inflation and interest rates have coincided with corporate profits falling because of the political unrest and disruption in the global business equilibrium. Meanwhile, the remote-working and client services challenges of the COVID-19 pandemic are spurring banks to invest in an overhaul of their operating technologies.

Over the last 24 months, private banks have responded to these challenges in numerous ways. For example, many have expanded their technology, anticipating that the investment requirements will be outweighed by the potential to preserve revenues and profits in a period of falling markets and rising costs. More broadly, we are seeing substantial changes in banks’ financial fundamentals and in their operating models.

Financial fundamentals show banks under pressure

Together, these changes are reshaping private banks’ existing AUM base and client preferences regarding new investments, with impacts on banks’ financial statements. The global combined corporate and private balance sheet has ballooned in the last 20 years, from net worth and liabilities of €450 trillion in 2000 to €1,530 trillion in 2020. 3 For more information, see “ The rise and rise of the global balance sheet: How productively are we using our wealth? ,” McKinsey Global Institute, November 15, 2021. These record levels pushed AUM and revenues of Europe’s private banks to three successive record years in 2019, 2020, and 2021. But the recent surge of inflation, rising interest rates, geopolitical storms, and a slowing global economy have battered the financial markets and indicate a turning point for private banks.

Our pulse check of industry AUM at midyear 2022 shows that after rising 12 percent in 2021 on positive net flows and market performance, European private banks’ managed assets declined 11 percent in the first half of 2022 to €9.2 trillion. Falls in AUM values of 13 percent were partly offset by 2 percent in net new money from clients (Exhibit 1).

Banks’ total revenues increased by one percentage point for the first half of 2022, raising the aggregate revenue margin earned by one basis point. Absolute revenues increased due to a deposit margin higher by 8 basis points (despite lower lending volumes), which compensated for the reduction in AUM, and despite a small decline in the proportion of AUM in mandates.

Equities as a share of AUM dropped two percentage points, to 32 percent. Cash and equivalents grew by three percentage points, while fixed income was stable.

Against the small revenue gain, aggregate costs were up 4 percent, raising the industry’s cost-to-income ratio to 71 percent from 69 percent in 2021. The net result is a decline in the industry’s net profit pool of about 5 percent, to an annualized figure of €20.3 billion.

Looking ahead to 2022’s full-year results, it is unclear whether profit pools will fall below record-high 2021 levels. Rising interest rates are net positive for European private banks; however, the size of the impact depends on each bank’s currency exposure and loan-to-deposit ratio.

Operating models are evolving

Private banks’ operating models have undergone a steady evolution through a push for scalability to achieve overall cost reductions from 2017 through 2021—a cumulative 0.8 percent in the mid-office and 2.0 percent in the back office despite spending to meet new regulations and catching up on digitization. But over the last 24 months, a majority of private banks have announced substantial investments into their operating models to build out their technology and environmental, social, and governance (ESG) frameworks, including a series of overlaps between the two.

The integration of ESG into European private banking

Compared with other sectors in financial services, private banking is still in the early stages of offering products that aspire to ESG principles and tracking their investment processes and ESG results. Instead, private banks are focused on fulfilling new regulatory requirements, such as the implementation of the Markets in Financial Instruments Directive II (MiFID II) ESG amendments. Only a few firms have started to differentiate their offerings by means of ESG products.

Fast movers have the chance to shape market standards and gain a disproportionate market share in this growing area. But they need to address both the product and the distribution challenges of ESG.

While liquid products that fit into mandates might be ESG compliant, private banks and their clients need to go further if they want to aim for net-zero carbon targets. Such exposures as, for example, climate risk management or transition funding can currently be found more often in illiquid investments. However, the market for illiquid ESG investments is still small and more difficult to access, and so far, the available data tend to be of low quality.

To address the distribution challenge, private banks need to embed ESG into the advisory process, balancing the future risk, return, and ESG requirements of the individual client. A starting point could be a clear statement of the bank’s ESG focus and how that focus is incorporated into client portfolios, as well as market communication to create awareness. Building from there, private banks could segment clients based on their preferences (potentially even beyond the MiFID II requirements, such as for thematic tilts) and understanding the existing portfolio. Then they could build a portfolio construction advice engine that balances the individual ESG criteria (with return profiles for each factor) against common risk-return-liquidity parameters, as well as build a back-end system for performance assessment and ESG-aware portfolio reporting.

Global regulatory developments in ESG, which aim to standardize disclosures, marketing, and investment processes, require changes to banks’ core processes. ESG-oriented products are gaining share overall; ESG mutual funds are already attracting more than 50 percent of new product inflows on mutual funds and are expected to account for more than 30 percent of mutual fund AUM in 2023, according to our survey (see sidebar, “The integration of ESG into European private banking”). However, private banks’ approach to ESG investing and advisory is still maturing, and further inflows to ESG-related products are likely—including on mandates, where few ESG offerings exist today.

Banks also report a rapid pace of technology investment. According to our survey, banks plan to triple technology spend from 2 percent of total revenues in 2019 to 6 percent in 2023. (In our experience, the increase among private banking arms of universal banks has been more moderate; these banks tend to benefit from synergies with the rest of the bank but also need to meet other investment priorities.) These investments are aimed at catching up on cloud, data, and distributed-ledger technology, where private banks typically lag the technology leaders in financial services. Private banks have been more cautious on investments into digital assets, Web3, and the metaverse, where they have focused thus far on trials and pilot projects.

Mastering the changes

Private banks face a quandary. Firms need to recalibrate their financials to reflect higher interest income and lower recurring and brokerage income at a moment when many banks’ strategic plans call for expanding spending to revamp their operating models and technology capabilities.

To manage these dual imperatives, we recommend a two-step approach. First, banks should develop a resilient framework for profit growth. Second, they should align on a strategic direction and desired future operating and business model—one that evolves logically from the current position defined by client profiles and bank resources. Such a strategy should ensure that the aspiration and the path to change are feasible and would result in the desired business outcome.

A resilient framework for profit growth

In our surveys of Europe’s private banks, covering over 100 institutions from 2017 to 2021, we have observed more than 50 factors that have an impact on profit growth. Of these many factors, six stand out as having the biggest impact (Exhibit 2). While these factors are well known, the significant difference in impact underlines their importance and the lack of programmatic application across the industry.

• Investment performance. Private banks that delivered superior investment performance to clients saw their profits grow faster than average. Between 2017 and 2021, private banks in the top quartile of investment performance—those that averaged annual portfolio returns of about 6 percent, versus about 3 percent for the European industry average—increased their absolute profits by 13 percent per year, versus the 1 percent industry average.
• Mandate penetration. Banks in the top quartile for mandate penetration manage about 80 percent of client AUM within mandates and saw corresponding profit growth of 7 percent, due to higher inherent fees. In particular, banks with a majority of AUM in advisory mandates had the strongest growth in profits.
• Growth in the high-net-worth (HNW) segment. Private banks that have strengthened their positions in the HNW market and expanded net flows have outpaced the industry in overall profit growth. During the last five years, banks ranking in the top quartile of growth in HNW clients raised their AUM for this segment by 10 percent per year, versus an industry average of 4 percent. Consequently, they grew absolute profits by 6 percent annually, against an industry average of 1 percent. Private banks successful in this segment often choose a tailored approach to specific communities.
• Scale. Scale at the booking center level continues to rank as an important factor in profitability. Over the last five years, banks’ booking centers managing more than €30 billion in client AUM saw profits grow by over 6 percent per year, versus 1 percent for banks with subscale centers.
• Relationship manager productivity. Private banks that were able to substantially increase the productivity of their RMs realized 12 percent annual growth in AUM per RM, versus 5 percent for the industry. These top-quartile banks saw annual profit growth that was three percentage points faster than the industry. At the other extreme, banks that simply relied on expanding the size of their RM networks without concomitant increases in productivity suffered profit contraction—a drop of 3 percent annually, as their numbers of RMs expanded 7 percent.
• Cost management. Control over costs remains a key factor in profitability. Our survey confirms that top-performing private banks recognize the importance of continuous spend management and develop ongoing cost reduction plans for the short and medium terms. Banks in the top quartile for cost management reduced costs by 11 percent annually over the five years, with a corresponding increase in profits of 4 percent.

The importance of these six factors will not surprise anyone familiar with the private banking sector. They are evergreen fundamentals. However, intuitive though they may be, excelling in these areas is not easy and requires great discipline. Few banks can lead across all six factors. Doing so requires a holistic transformation that combines managerial and leadership actions with granular plans for people development.

Setting the strategic direction

To achieve success in the fundamental factors that lead to outperformance in private banking, most banks will need to start at the strategic drawing board. But given the current headwinds, now is, in some ways, an opportune time for rethinking strategy. Great leaps vis-à-vis competitors are always difficult but may stand a greater chance of success in times of industry challenge.

As private banks debate their strategic direction, they must start with a clear sense of their current position—whether it be in terms of client segments, state of technology, or economics. Large, global private banks are the most likely to embark on significant strategic changes, simply because they can invest more in their business models and operating models (including some disruptive trial-and-error ideas). Smaller private banks, whose smaller budgets limit their options, will need to link any changes more closely with today’s operating model and undertake trial-and-error projects in a more targeted way, focusing on their current or future competitive advantage.

Small and medium-size private banks: Make clear choices. For relatively small and medium-size private banks, the ability to provide bespoke services and products for on- and offshore HNW client relationships remains the strategic core. This proposition helps preserve margin premiums to balance the relatively higher cost of the operating model.

Small and medium-size private banks need to set their investment priorities on a few areas of differentiation—whether tailoring products to niches and affinity groups or providing bespoke advice in more complex setups (for example, cross-border advice). These banks cannot afford to build extensive platforms, so they should differentiate by having RMs focus on lead generation and client serve with distinctive insights.

• Segment focus. Because most small and medium-size banks lack the capacity to invest large amounts into a scalable advisory and investment engine, they should avoid trying to serve a broad range of client segments. Instead, they should narrow their focus to HNW and the lower tier of ultra-high-net-worth (UHNW) clients.
• Channels. These banks should also focus RMs on distinct face-to-face or remote advisory, using basic self-service digital capabilities, such as e-banking, for simpler transactions. This approach will allow them to focus their resources on providing a differentiated experience for clients, whether through content, quality of advice, or other means.
• Offering. As smaller private banks are often the second or third banking relationship for their clients, they should strengthen their capabilities for structuring wealth and cash flows for families or across networks of accounts, as well as their investment services for wealth held at the bank. Investment offerings should be backed by an open product architecture that matches the bank’s own products with products from third-party providers that serve specific clients’ needs.
• Technology. Usually, smaller banks have kept IT in-house. But as technology investment needs increase, the best path may involve external, standardized, or fully outsourced solutions. In particular, smaller banks should consider externally sourcing applications that do not lend themselves to differentiation.
• Operating model. As with technology, smaller private banks should consider outsourcing elements of the operating model—for example, payment processing.

Private banking arms of universal banks: Emphasize the integrated global proposition. The private banking divisions of large universal banks can make greater investments in technology than their small and medium-size peers. However, universal banks still need to make technology portfolio choices for their various banking businesses, so they do face limits on how much they can invest.

The portfolio context lends itself to synergies across businesses. For example, a proposition for affluent clients could later move these clients into private banking. Another example of synergy would be a holistic wealth management coverage model in close collaboration with the corporate bank.

• Segment focus. Private banking arms of large universal banks need to offer a single proposition for all wealth segments, as opposed to multiple offerings for specific subsegments. The proposition should focus on affluent and lower-HNW clients moving up from retail segments, as well as UHNW clients referred by the corporate banking arms.
• Channels. The banking arms should develop a basic omnichannel experience that offers a combination of self-directed transaction functionalities from their retail and corporate banks and more sophisticated, offline advisory for wealthy clients. An omnichannel design could call for adapting self-directed digital experiences from retail and corporate banking and combining them with simple digitally enabled capabilities for face-to-face and remote private banking interaction. To differentiate their offerings from those of large private banks, the private banking arms of universal banks can digitally combine their broad range of products and services, offering the depth and sophistication of an omnichannel, investment-led advisory interaction.
• Offering. Private banking arms of universal banks are often their clients’ primary banking relationship. Clients therefore are likely to be looking for a full suite of products, including transactions, investments, lending, and financial planning. To differentiate their services from pure-play private banks, firms should consider investing in more sophisticated lending and comprehensive wealth and provisional planning, to support clients’ entrepreneurial ambitions.
• Technology. Currently, most of the banks in this category develop their IT in-house and share proprietary applications with retail and corporate banking. Beyond core functions, however, we recommend investments in wealth-specific tools for clients and RMs. Banks of this type should make careful make-or-buy decisions on tools specific to wealth management.
• Operating model. Private banks in this category can leverage other parts of their banks to create synergies in operations. Tasks that are specific to wealth management, such as more complex know-your-customer (KYC) or anti-money-laundering (AML) checks, can be either performed in-house or outsourced—the decision should be based on the bank’s existing technology model.

Large private banks: Further develop scale. Large private banks generally have a broad coverage of client segments and geographic markets, which confers an advantage in continuing growth and expanding scale. These banks need to balance shorter-term growth against selected longer-term aspirations on channels, products, or technology platforms. As part of strategic considerations, banks should conduct regular portfolio reviews to sharpen focus, simplify operations, and direct investment to the most promising areas. Programmatic M&A of clearly defined client portfolios or geographic markets can help in this regard.

• Segment focus. Large private banks can choose to focus on several segments—for example, HNW or UHNW; first, second, or third-generation wealth; and specific subcommunities at market level. Their challenge is to choose specific segments for which they can build segment-specific, differentiated, and scalable propositions.
• Channels. Large banks should offer clients an omnichannel advisory experience, with clients self-selecting different channels and servicing modes. Private banks can preserve the premium experience while reducing the cost to serve. To build this omnichannel experience, banks need to combine standardized transactional and communication functionalities with differentiating product and service capabilities. In addition, they should build a client data model that enables scalable, personal interactions across channels.
• Offering. The offering should be differentiated across client segments to allow for scaling affluent and HNW segments, as well as catering to complex UHNW clients. Prioritized access to sought-after asset classes is a differentiator, which large banks can achieve through partnerships with alternative asset managers. Unlike smaller banks, these banks can choose to manufacture parts of the product shelf in-house.
• Technology. Large private banks have the means to modernize parts of their technology stack (e.g., by choosing a standard platform and applications) and achieve cost efficiency. As part of the same process, banks should consider outsourcing technology for nondifferentiating, specialized tools for specific regions, such as KYC or tax reporting for specific geographies. However, banks should invest in a proprietary and differentiating technology and data to support their omnichannel offerings. Wealth managers must bear in mind the need to develop, attract, and retain technology talent; with many banks competing for the same talent, offshore and nearshore locations may be part of the solution.
• Operating model. To retain strict control over costs while laying the groundwork for continued innovation, large private banks should offshore or nearshore their service centers if they have not done so already.

Beyond these archetypes, innovative and disruptive private banking models will continue to emerge. We expect some of these new arrivals to achieve a foothold in the market, but they will likely remain on the margins of the private banking industry. The bigger risk for disruption comes from within the industry—that is, from larger players making significant investments or pursuing M&A or partnerships with fintechs and deploying innovative technology at large.

HNW clients will continue to diversify their wealth across three to five service relationships, and growth from existing HNW clients will likely still accrue to incumbents. In addition, the existing stock of wealth at incumbent players remains sticky and will see minimal runoff over the next decade. Private banks, especially larger ones, can consider collaborating with innovative players to integrate those firms’ services into their own offering. They can even consider acquisitions that take advantage of technology companies’ decreasing valuations.

Ultimately, the strategic choices also depend on a bank’s strategic conviction, change capacity, and implementation risk capacity.

Europe’s private banks must approach today’s evolving and volatile environment with the strongest proposition possible, to attract and retain clients looking for better wealth solutions. Investment offerings should be reevaluated with scenarios that include higher inflation and interest rates and the possibility of local or global recession. Banks should reassess and sharpen their segment focus, directing selling and retention efforts to the client groups it has the strengths to serve best. And given the growing importance of investing via ESG principles, banks should continue to develop dedicated offerings.

In addition, optimal delivery across technology and operations is essential. Each type of private bank needs to build out a platform to suit its model of relationship management, whether high-touch with conventional RMs or omnichannel services that integrate and promote the use of all account and transaction functions.

Fortunately, private banks have a proven set of metrics for guiding their efforts and monitoring revenue growth and profitability. These six variables show the effectiveness of client relationships, products, and the size and scope of the bank, based on their track record of association with banks posting superior profit growth.

Sid Azad  is a partner in McKinsey’s London office;  Cristina Catania  is a senior partner in the Milan office;  Marius Huber  is an associate partner in the Zurich office, where  Jan Quensel  and  Christian Zahn  are partners;  Sebastien Lacroix  is a senior partner in the Paris office; and  Frédéric Vandenberghe  is a senior partner in the Brussels office.

The authors wish to thank Giorgio Ciocca, Rashi Dhingra, Ankit Khandelwal, Benedikt Läufer, and Marlitt Urnauer for their contributions to this article.

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Why customer acquisition is banks’ #1 priority

BAI’s Mark Riddle discusses our key 2023 survey findings and how financial institutions can attract younger generations.

For banking institutions working to expand their Gen Z customer base, messaging around products and services should be highly personalized and the digital experience should be top-notch for these digital natives. But don’t overlook branch upgrades as well—Gen Zers are heavy users of in-person bank services.

These are among the headline takeaways for banks and credit unions—be they traditional, digital-only or anything in between—from the latest BAI Banking Outlook (BBO) survey , which identified new customer acquisition as the industry’s foremost business challenge this year.

We recently spoke with Mark Riddle, director and research intelligence expert at BAI, to get his take on specific findings from the BBO research pertaining to customer acquisition.

This interview has been edited for length and clarity.

For 2023, new customer acquisition is the top business concern for banking institutions, up from No. 2 last year. Is the driver more than just a renewed need for deposits after a few years of excess liquidity?

New customer acquisition has moved to the top of financial institutions’ priorities because we have a lot of competition for new customers using very attractive deposit rate offers. For years, customers would keep their money in checking accounts at very low rates—there wasn’t enough financial incentive to move money in CDs or switch banks. That is no longer the case. In our latest BBO survey, we found that about a quarter of consumers say they will transfer money out of traditional banks and into online banks or others who offer higher rates for savings or CDs. We see this willingness playing out in our weekly deposit pulse benchmarking. More affluent customers are more likely to move to whoever has the highest rates in the marketplace, while mass market customers are much more driven by paying the least in fees as the primary reason for switching their primary financial service organization.

Based on the BBO research, how much of the customer acquisition opportunity is new households, and how much is attracting existing customers from other competitors?

I think both are big opportunities, but it depends on the bank or credit union’s strategy. If you are trying to grow deposits, attracting high-account-balance customers from other competitors is the best opportunity. That said, it can be a challenge to find the right customers. Typically, banks do not want rate-sensitive customers who will be difficult to retain over time and foster deep relationships with. If you are trying to grow new households with an eye toward the future, it may make more sense to pursue members of Gen Z who are new to banking, as they represent the customer growth potential in the marketplace. These younger customers are not likely to contribute as much today in terms of total deposit balances like the wealthier households, but they can be a solid foundation for the years ahead.

With boomers and Gen X, the idea of the stable primary financial institution seems to be alive and well, but the research suggests it’s less so for the younger generations. What do you think accounts for that lower level of commitment?

The weaker commitment is from Gen Z more than millennials, and I believe this is due to financial services organizations not meeting Gen Z’s expectations. Gen Z has the lowest Net Promoter Scores of all generations. They favor the digital channels, but they still have issues with digital—one being that they don’t think the digital offers they receive are personalized enough. Another is that they find it difficult to open accounts online or get advice about which types of accounts to open. Many potential new customers end up abandoning the online application because it’s too difficult to complete, and many who stick it out ultimately need to visit a branch for identity verification or paperwork. Channel-switching—starting in one channel but finishing in a less-preferred channel, or sometimes needing to start over again—is a major frustration for consumers, and not just those in Gen Z.

Do we have any sense that this lower level of commitment for Gen Z is basically the fickleness of youth that tempers over time, or could it be something more profound given the technology-driven changes in the industry during their formative years?

I think it’s a more profound and lasting change. Those in Gen Z have grown up with technology. They know what a good digital customer experience (CX) looks like because they’ve been using Amazon, Google, Apple and other tech giants that prioritize CX. Gen Z rates the digital CX at their primary bank much lower than any of the other generations, in large part because their experiences elsewhere have elevated their expectations. Younger consumers are also seeking faster payments and quicker money transfers from their financial service organizations. They are the I-want-it-right-now generation.

Something else we saw in the 2023 survey is that nearly all of the demographic groups, even the baby boomers, are willing to share more personal information if it gets them more targeted offers from their bank. How can banking institutions put this greater willingness to use to bring in new customers?

Financial service providers are in a trusted position where most consumers want to share more personal data for relevant offers. This is a significant opportunity. The challenge is to use this information in a thoughtful way that helps their financial lives. For example, it’s irritating for renters to receive multiple home-equity offers. A lot of younger Americans would like to know what their peers are doing for investments, savings, products and services. Banks could use the vast amounts of data they collect to help consumers find peers or see what others in similar situations have done. This would be consistent with banks’ oft-stated intentions to make more education and advice available to their customers.

Kim Collins is director, digital content, at BAI .

We provide insights to help shape and fine-tune your customer acquisition strategy and tactics in the BAI Executive Report, “ Meeting the challenge of new customer acquisition. ”

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How to Start Your Own Private Bank?

• BY GlobalBanks Team
• Updated Jul 10, 2023

In this article, we’re going to discuss how to start your own private bank, including why you may and may not want to consider this option.

We’ll also break down the key requirements that you’ll need to meet to even consider starting your own private bank and a few jurisdictions you might want to explore.

This article is part of our free series on banking in the best jurisdictions available, including a detailed step-by-step guide to opening a private bank account for yourself.

Feel free to use the table of contents to jump ahead to the sections most relevant to you.

Table of Contents

Benefits of Having a Private Bank License?

Capital requirements when starting a small private bank, frequently asked questions, do you want help opening bank accounts.

To start your own private bank you will need to apply and be approved for a private banking license. That said, banking regulations and banking license requirements vary between jurisdictions, so it’s important to select a jurisdiction that matches your resources and desired banking model.

In general, the minimum requirements to apply for a banking license include a detailed business plan, risk management and compliance plan, corporate governance documents, capital requirements, and an overview of all banking operations.

That said, banking regulators also want a clear picture of the financial services that you plan to offer, your plans for client acquisition, and future capitalization plans.

Of course, depending on what you mean by “private banking” the requirements listed above and the services that you can offer will vary.

In fact, in most jurisdictions private banking licenses are categorized as Class B banking licenses, which typically cater to a closed group of individuals or international clients.

For these reasons, it’s important to note that there is a difference between “private banking” in the traditional sense, which is commonly associated with wealth management and registering a private financial institution in an offshore jurisdiction.

The perceived benefits of having a private bank license include autonomy, control, and the ability to manage your finances in a way that matches your personal preferences. While this may be true for certain individuals, it isn’t always the case.

In fact, if you’re like most people and decide to register a bank in an offshore jurisdiction where banks struggle to maintain correspondent accounts, you will be worse off than when you started. This is because, after investing time, money, and energy into the process of registering your bank, you won’t be able to use the bank unless you can obtain a correspondent account.

But, correspondent banks are extremely careful with the financial institutions that they onboard as clients. As a result, it can take months or even years to open a correspondent bank account.

In certain cases, and in certain jurisdictions, your bank may never get a correspondent account opened at all. This is the unfortunate reality for many entrepreneurs that decide they want to open a private bank.

The specific requirements to start a private bank will largely depend on the jurisdiction that you choose for registration. On the low end of the spectrum, the capital requirements can range between USD 300,000 to USD 5,000,000. This range reflects the registration of a private bank in a small offshore banking hub. More established banking jurisdictions have considerably higher capital reserve requirements.

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Below are a few of the most common questions we receive from people looking into how to start your own private bank. If you have further questions you would like to ask our team, don’t hesitate to get in touch.

Can You Make Your Own Private Bank?

Yes, you can make your own private bank. However, you should consider the pros and cons of doing so before investing time and energy into the process. In most cases, setting up a private bank is complicated, costly, and bureaucratic, and has unforeseen challenges that can make it not worth pursuing.

How Much Does It Cost to Start a Private Bank?

The cost to start a private bank ranges between a few hundred thousand dollars and tens of millions, depending on the jurisdiction you choose to register in and the fees associated with applying. Of course, the costs also need to include the initial capital injection, which will be necessary to meet the regulatory requirements.

Do Private Banks Create Money?

No, private banks do not create money. However, when managed efficiently they can earn revenue and generate profit for its shareholders. Likewise, private banks tend to offer high interest rate products and lucrative investments to their customers.

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The GlobalBanks editorial team comprises a group of subject-matter experts from across the banking world, including former bankers, analysts, investors, and entrepreneurs. All have in-depth knowledge and experience in various aspects of international banking. In particular, they have expertise in banking for foreigners, non-residents, and both foreign and offshore companies.

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