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Products and services in banking

Products and services in banking



Stanislas Chambourdon

Head of Banking and Insurance

KPMG in Luxembourg


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Products and services in banking

There is no question that the revenue of private banks is highly correlated with the performance of equity markets. This cyclicality is no surprise, given that revenue in private banking depends heavily on transaction volumes and asset-based fees (and sometimes even on performance-based fees).

In the context of providing higher transparency to clients, most private bankers risk losing some income in places where their services have never been properly invoiced. In the Netherlands, where a strict ban on inducements was introduced two years ago, we observed new costs coming to clients, such as the “current accounts maintenance fee.”

It will be crucial for all client relation managers (CRMs) to properly explain to their clients the significant changes facing business models in early 2018. In all likelihood, few private banking clients will have previously dealt with the contractual relationship between product manufacturers and their distributors.
It is fair to say that many private banking clients have benefited from an enhanced quality of service without being directly charged for it. Now is the time to explain that accessing CRM 24/7 has a cost, that reviewing one’s portfolio while reclining on the sofa via e-banking means costs for the bank in terms of infrastructure, development, maintenance costs, and others.

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