Having worked in the Private Banking industry both in the UK and in Israel, in this blog post I will be taking a brief look at the differences and similarities between these two types of institution.
Let's start with the differences. Firstly, size. The size of the industry in the UK is clearly much larger than here in Israel, which is understandable given the vastly greater population in the UK, as well as the fact that the UK is one of the world's leading financial centres.
This means that assets under management are far greater in UK Private Banks than here in Israel. It also means that the pool of global potential customers is also much larger.
This filters down in to the next difference, which is account/client size. Due to the vastly greater pool of private banking clients, if you want to enjoy private banking services in the UK, you will need to have far higher minimum account balances. Several million pounds may be the requirement to be a top echelon private banking client, where as in Israel, on the whole, you would need smaller sums, say anywhere in the region of $1-2m.
In the past, another such difference might have been the private banking culture and the accompanying level of service, however I do not believe that this is the case anymore, and this leads me nicely in to the next part of the article, the similarities.
The global nature of the industry has been expanding continuously, and there is an ever growing ability for customers to move assets between different banks and indeed countries. Therefore, in recent years, private banks all over the world have had to raise their standards to match those that customers have become used to in the traditional private banking centres.
Israelis is no exception to this. Indeed, part of the success of private banking here in recent years is due largely to the revamping and reinventing of its processes, product-service set and management ethos, enabling them to give their customers, both local and international, the levels of service and experience that they demand.
Indeed, another similarity between the private banks in the UK and Israelis the open-architecture model, whereby banks are required to offer third party products from across the market, and not to limit the choice of their customers to any specific group of product providers.
This has been rigorously enforced in Israel since the implementation of Bachar Committee's findings in 2005. This model gives bank customers exposure to the best in-class products, without bias on behalf of the bank's adviser/clerk.
Private Banks in both countries offer a full service package, ranging from investment advice on securities and mutual funds, cash deposits, credit cards, loans and various kinds of financing.
This means that, in theory, the customer can have most, if not all, of his/her financial needs met by the same institution. This is particularly helpful for international customers, whose geographical distance makes it inconvenient to have several points of contact in a foreign country.
There is of course more that can be said on the matter, however the above points are, in my opinion, the most stand-out of all the differences and similarities between UK and Israeli private banks.