A study of Swiss financial services clients shows that trust and trustworthiness are what counts in persuading clients to sign up.

Trust and reputation are unsurprisingly decisive factors in convincing a person to become a client of a Swiss financial organisation, according to a survey of around 2,000 clients in Switzerland by EY, the global accountancy and consultancy firm.

The survey, conducted between December last year and January 2015, showed that for both banks and insurers, trustworthiness and reputational strength were critical – about 45 per cent of respondents said these were decisive in getting them to sign up to a firm. Banks with a distinct local presence, such as the cantonal banks, were rated highest for these criteria, the survey showed. Some 38 per cent of respondents said that when choosing a bank, its digital offering is an important measure. As far as insurance firms are concerned, an ability by clients to understand products and services was key – an important factor for 31 per cent of those polled.

The findings underscore the work that banks and other financial firms need to complete before they can enjoy the levels of trust that were shredded in the 2008 financial crisis.

"Trust and reputation are the key success factors for financial services providers and must be earned anew every day. This can only be achieved if companies deliver a systematic and consistent client experience at all stages of the individual client life cycle," Achim Bauer, a partner at EY, said.

The report by EY also highlighted a “dramatic” loss rate between the initial contact with a potential client and the signing of a contract.

“However, banks and insurance companies are failing to keep clients on board throughout this customer journey. Banks lose more than 55 per cent of their clients along the way and insurance companies even lose more than 70 per cent. This is compelling evidence that financial services providers do not or only partially meet clients' expectations in the various stages,” the report said.

Insurance companies' product ranges are not well known, the report continued.

Although insurance companies also offer products and services, such as mortgages, that serve the same savings and investment objectives as some bank offerings do, in most cases (75 per cent), potential clients do not take them into consideration, the report said.

Swiss financial services clients associate banks and insurance companies with their traditional product and service offerings and, in turn, this implies that clients are not well enough informed about the product ranges, it said.

The report said that as far as the respondents are concerned, life and disability cover are almost exclusively associated with insurance companies (98 per cent) while equities, bonds and funds are associated with banks around 75 per cent of the time.

“For this reason, insurance companies in particular must make potential clients aware of their whole product range and do a better job of marketing their portfolio in order to properly position not only their core competencies but their entire service offering,” it continued.

The EY report also found that Swiss clients want to pay less for basic banking packages (account including payment transactions, debit and/or credit card), namely around SFr90 (around $94) per year, compared to an average market price of around SFr110.

However, demand for client-specific supplemental services offered by financial institutions is much higher, and clients are prepared to pay a significant amount for them. Examples of such supplemental services include client-specific weekly market analyses, for which clients are willing to pay around SFr100 per year, or online messaging services, for which respondents said they are willing to pay an average of around SFr90 per year.

Furthermore, the analysis clearly shows that the willingness to pay for the same after-sales services is on average about 14 per cent higher for insurance companies than for banks, despite the fact that potential clients tend to consider banks more often when it comes to retirement provision and assets.

Digital desires
Digital interactions are becoming increasingly important, but not at the expense of personal contact, the report said, a finding that comes at a time when a number of private banks, for example, have been rolling out new digital platforms to engage with clients and improve banker productivity.

In a reminder of the desire for face-to-face contact as well as digital engagement, nearly 80 per cent of those surveyed still want personal advice from their bank or insurance company.

The younger generation in particular finds online/virtual advice to be increasingly relevant and appealing. Indeed, 25 per cent of bank clients and 15 per cent of insurance clients under the age of 35 want more digital interactions with their financial services provider. This is compared to 16 per cent of bank clients and just 9 per cent of insurance company clients over the age of 35.