Magazine article American Banker

An Old-Time Service for a Hot New Market

Magazine article American Banker

An Old-Time Service for a Hot New Market

Article excerpt

What, really, is private banking?

When customers describe the special service they get from the private banker at their large institutions, community bankers tend to say, "But that's the service I give everyone!"

To most customers, private banking means that you are considered special, your requests are handled without hassle, and your bank transaction is a pleasant experience.

In a city like New York, where people sometimes must wait an awfully long time to see a teller or even to use an ATM, the availability of a human who offers immediate help seems like Dreamworks banking. But in many communities it is routine.

So private banking seems most like a necessity mostly when banks get bigger (and people start remembering what banking used to be like).

The trouble with private banking departments today, though, is that management often doesn't really specify what it wants them to do.

"What does the bank want out of me?" many private bankers ask. "Do they want me to generate deposits, get loan business from wealthy individuals, or sell the new investment products that so many banks are beginning to offer?"

A good CEO would answer: "All of the above."

Private banking can help retain large depositors. I have seen a number of rich individuals switch banks when the private banker who served them was transferred or fired and was not replaced.

The rise in the stock market, entrepreneurial success, and even the lottery have made many instant millionaires. So the desire for securities loans, bridge loans, and many other credits that people ignored in the past has made the private banker even more valuable. …

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