Private Banking industry continues to be one of the most attractive segments of the financial services sector. This is true both at European level and at the global scale and is reflected in valuations of the private banking segment, vis-a-vis the other segments of the banking industry. Nevertheless, Private Banking, and by extension wider Wealth Management, faces continued challenges, leading to another year with shrinking revenue margins, increase in costs and as a result further increase of cost-income ratios. Thankfully, this dynamic is playing out on a backdrop of overall increase in Assets Under Management. The obvious risk scenario would manifest in case of shrinking AUM which will drive a much bigger challenge for the profitability of the industry.<\/p>\n
COVID-19<\/strong><\/p>\n Coming into the crisis there was already vast pressure on the industry, especially in terms of profitability. The changes brought by the pandemic, in context of Wealth Management, can be broadly summarised in 4 key areas.<\/p>\n Increased market volatility had two major effects:<\/p>\n The other two correlated effects of the pandemic were:<\/p>\n\n