How does the next generation differ from the current ones—and why?
The interesting part of the next generation is that it was always there, right? When you look through history, there was always a next generation. I also had to ask myself, what is different about this next generation that we are talking about now, which is also confronted with the biggest wealth transfer in history, which is the biggest generation in history, because over 50 percent are under the age of 30. So in that regard, what is so different, I think, is that every generation is kind of a testimony of what they experience, what they live through, what access they have, and this next generation is, in that regard, very different to the current generation, because they have lived, worked, and studied in many different countries and not just one. They also have information at their fingertips—not only because of digitalization—but also because they have much more educational opportunities than the current generation had. And that is influencing how they look at the world, what they see as purpose, and also how they look at wealth.
That sounds a bit challenging for banks, so how do banks address those differences?
We’ve seen that the next generation can challenge and also really disrupt certain industries. And we in the banking industry also see that as a risk, because how we do stuff and what we do is not so appealing to them. And on the other hand, it’s also a great opportunity. It might be the kind of chance to step up and really look at everything that we do with new lenses. And that’s what I love about the next gen, it’s the attitude: To ask questions like “How do we work with clients? What products do we offer? What’s the meaning of wealth that we somehow also have as bankers? And how can we really make sure that the face of banks potentially is changing?” Because since 2008, I think, there’s a huge gap in trust in the institutions of banks.
How important is the brand image of a bank or financial institution for the next generation?
Whenever you look at the next generation, it’s many individuals so it’s always a little tricky to say “this is the next gen.” But thinking about what they have lived through and how they can actually look at work, banking, and money, and all that, you have to understand one thing: Purpose is very important. Really understanding what my values are, and invest, live, and work according to my values. And that’s something really everyone needs to understand about the next gen: Why purpose is so important. And thinking about that, that is where brands become so important. That a link between the customer (the next gen) and the company (the brand) is only created if there are shared values. That’s why the next gen looks much more into details about the company, not only is the product appealing, but also how the product is made. Is it sustainable or not? Can I trust that kind of brand? And those are things that past generations or the current generation has also done but not to the extent that the next generation is looking at brands.
Ethical investing is also one of the important topics for Gen Z, Gen Y. So how do you as a bank advise them on topics such as ESG?
In 2013, it was the first time I heard about impact investing from the next generation. And I thought, OK, every investment has an impact, so what is that? And the challenges we’ve seen in the last years was always that there was 86 percent of the next gen really interested in topics like ESG, sustainable investing, impact investing, but only 24 percent were invested. Why that gap? Because there was not such clear language about what the products were and how you talk about impact investing—and there was also not so much available. And that, I think, was where banks understood there is a next gen need, and in terms of Credit Suisse, thinking not only of a need but there’s more we have to do and more we have to offer and also more clarity and transparency we have to give on what’s available when you want to invest sustainably. Therefore, a huge department has now been created—Sustainability, Research and Investment Solutions SRI—that just looks into how it can be made easier to invest sustainably. That’s one thing, the offering. And the other one is also educating—figuring out how to really make it clear and show the tools and the way you approach that kind of investment. Those are two ways banks can help.
You mentioned that the next generation is interested in impact investing but do they actually invest more into ESG topics?
The impact—like you invest into that more—has increased. Why has that been the case? The next generation, again, with their attitude of “I’ll question how we invest,” “I’ll look into how we can do it better,” “I’ll better understand what my purpose of wealth is actually looking like”—in that regard, they as members of families that do have some possibilities to invest, have really influenced their parents, so the current generation, and potentially also their grandparents. And that I think has shifted also, that there’s more investment and not only more interest, but more ability to get educated as a family about that. So I see next gen as a kind of influencer for the whole family. Obviously, that’s a process, and then there’s not only more interest but also more investment happening.
And another thing you’ve mentioned is having information at their fingertips. How important are digital services and apps for the next generation?
Digital tools are very important because next gen are really “do-it-yourselfers.” Every bank has to make sure that there are digital tools to create accessibility, transparency, and availability 24/7. On the other hand, what I have really experienced with the next gen that we’re working with is that it’s also important to have a personal relationship with a relationship manager. So when we did a survey, it was clear that 4 percent said that this person needs to be digitally savvy, but on the other hand the number one reason they looked for was really strong relationships. Because if you look for what to do with your wealth, your money, there is anything and everything there that you can look for and find. But to really understand what is good for me and what is helpful for my life goals—because I have a certain mission in my life that I want to really use my wealth for, wealth is just a tool—you need people who can look into that. One person that can help is the relationship manager. We as a bank extend that a little bit and don’t just see digital tools as one opportunity to help with wealth—the relationship manager is the second thing. There is also a huge opportunity connecting to the right people—I call it “the social capital”—and that’s our third, underestimated tool that a bank has to help the individual and families to work with wealth.
And does it help those families or the next generation that their wealth is being managed in Switzerland?
When I look through the next-gen lens—which I have because of working with them for so long—they look at the world as a global, very interlinked kind of system, so I would consider every next gen a global citizen. There are certain countries that are very important when it comes to things that you connect with money and wealth, which is stability, security, and safety. And Switzerland clearly is a country that is perceived as such. But I think what is also important is to always see how banks help to really interlink opportunities on a global level, because some of the challenges that we have and some of the opportunities that we have are global and not just local.
You mentioned chances a lot when thinking about the next generation. What chances do you see for Swiss banks?
The chances for banks when looking and working with the next generation is really to figure out what do we have that is good in the future and still needed, and what do we need in the future to meet new needs that our future clients, the next generation, have. And that includes questions about what products, what advisory process, what kind of relationship managers, and also what kind of impact and role the bank should play in society and in the world. So we always say #nextgencan—change the meaning of wealth, change the way how we talk about money, and also change what we do with our money and our wealth.