How have banks adapted their investment strategy during this covid-19 crisis ?

June 03, 2020

The corona crisis has had a strong impact on our way of living, way of working, the economy… What impact did the crisis have on consumers investment behavior, and how have banks adapted their strategy?

We asked Xavier Gys Director of Invest of AXA Bank.

Have you observed a change of the investment behavior of the customers of the bank? 

We’ve seen activity from certain clients. Some of them have been waiting for quite a long time (because they thought that the markets were overpriced) for an opportunity to actually enter. That’s what we’ve seen. At the same time, we’ve seen a lot of stability in the portfolios of our clients. Nobody really panicked. We didn’t see outflows. People as I said, they’re adhering to our strategy: working in the long term. That is working pretty well for us.”

What is the impact of Covid-19 within the branches of the bank? Can customers still talk face-to-face with their investment advisor?

The majority of branches are open and they’re working by appointments. Meaning that the customer makes an appointment in advance and then comes on a specific date to the branch. Most of the branches haven taken measures as well to protect themselves. Plexiglas and all necessary measures are taken to make sure that appointments can be carried out safely in the branch.”

Have you observed a raise of the mobile activity of the customers of the bank?

“It is more stable now of course. The monitoring activity has increased firmly, so people are logging in more often to check status of their portfolios or the level of their funds. As I said, if we’ve got people who want to grasp the opportunity to enter the market, some of them have done that in a digital way, especially in stock picking. Stock picking is the activity that we saw during a certain phase, especially between, let’s say, the beginning and the end of March. We’ve seen some additional activity, but since our business is mainly an advice focused business and mainly in mutual funds, the digital channel was not is not our primary channel.

We’re working with agents as our primary channel and that has worked out as it was before, so there we haven’t seen a lot of change in activity. What we have introduced though, was a possibility for our agents to give advice remotely which was not available before. We’ve introduced that although we see that the activity remains low from a distance because most of the customers still make an appointment and go to a branch and take into account security measures. So, their activities are continuing as normal which is actually already a success.”  

Are you going to adapt the investment advice strategy of the bank after this Covid-19 situation?

We were all very excited to start working on the remote advice process in the beginning because we were sure it was going to save our business. Now in this crisis, we’ve seen that actually our physical model kept on working properly. So, there was no real need yet.

Nevertheless, we are convinced as we were before that we should accelerate the process of giving advice remotely because I’m sure that for the future, this might not be the last lock-down that we have, and I think it’s a model which is going to be a little bit accelerated because of the lock-down people are asking themselves the question do I really need to go to a branch? And so, I’m pretty sure that in 6 to 12 months we will see that under the radar the behavior of our clients has slightly changed, so that’s why we want to prepare for that in the near future.”