The power of investing in Business Relationships

Business Relationships for Corporate Services by Dr Sarah Borg

With hands-on experience and expertise in leading financial services firm HBM Malta since its inception in 2004, Director Sarah Borg never loses sight of the value of knowing her clients, investing time in building strong relationships and expanding the firm’s growing portfolio of services.

As part of the international HBM Group established in 1991, with a solid reputation as an independent international financial services provider, HBM Malta is a boutique firm with strong international connections. And its Director, Sarah Borg, who runs the HBM Malta office, alongside its sister brand e-Management (a subsidiary of the Group focused on eGaming solutions), oversees every aspect of her clients’ activities in Malta.

“Knowing your client (KYC) is crucial
– who they are, where they’re from, and their history.”

From company formation, domiciliation, international corporate structuring, directorships, and trustee services to accounting and corporate secretarial services, HBM Malta’s suite of services ensures that a company interested in setting up in or operating from Malta is well-catered for.

As the company Director, Ms Borg stresses the importance of carrying out a thorough due diligence process, before moving on to establish a strong business relationship with any new client they onboard.

KYC and Onboarding New Corporate Clients

“Knowing your client (KYC) is crucial – who they are, where they’re from, and their history. We act as directors on some of our clients’ companies, so we are taking on the responsibility of a person we have just gotten to know,” says Ms Borg. “Understanding thoroughly who we are dealing with, what they are doing with their company, and what the business scope and their intentions are, is of utmost importance. We are living in a time when these elements are too important not to know.”

Having previously worked at a ‘Big Four’ firm, Ms Borg leverages her past management experiences during her dealings with new clients, citing her time there as invaluable. “Working at a ‘Big Four’ firm has taught me how to deal with all sorts of people with very different backgrounds and has given me exposure to all kinds of operations and the regulations that apply to them. Learning how to seek advice when I needed it helped me immensely in the years that followed.

“I have a personal relationship with every UBO, and that is the boutique scope of our own business.”

Simultaneously, it helps me to continue providing our clients with a boutique level of service, in that they are dealing with HBM Malta, but they are also dealing with me on a first name basis.”

Delving into the process of onboarding a new client, Ms Borg explains that this process broadly comprises the undertaking of robust customer due diligence (CDD) on a risk-sensitive basis, in line with the Group’s internal policies and procedures, coupled with the collation of customer-specific information (via face-to- face meetings and follow-up correspondence) relative to the client’s background and proposed business activities in Malta, including their strategic objectives and expectations for their new business – understanding inter alia the scope and nature of their business, intended third-party suppliers, target market/s and jurisdictional links. This information then facilitates more effective ongoing monitoring of the customer relationship and any corresponding transactions going forward.

“As directors, we vet and sign each and every contract that passes through our hands, to ensure that, first and foremost, the client’s company has enough financial resources for the undertaking stated in its contract to materialise, and that the transaction makes commercial sense in relation to the discussions we would have engaged in at the set-up stage of the company.”

“Every client has a different story and a different approach to doing business, which can provide valuable lessons.”

Ms Borg shares that she chooses her clients wisely and diligently. “I’d rather service 10 good clients than 100 that may cause problems at some point down the line. That is the boutique scope of our business, which is manifested in all our business units, and in the various countries/ jurisdictions we operate in. If we see that clients are being secretive, uncooperative or that there are intermediaries involved such that we do not have a direct relationship with the Ultimate Beneficial Owner (UBO) without sufficient justification, we would simply not accept to work with them,” she explains.

“I personally endeavour to establish a personal relationship with every UBO of our corporate clients, and we strive to know the people we are dealing with, we take the time to meet them personally and we invest in nurturing and developing the customer relationship. This happens not only before onboarding but throughout the duration of our relationship and has a two-fold benefit – it effectively results in a stronger professional relationship with the customer (which is essential from a business development perspective) and also facilitates more effective and robust compliance with our own internal CDD policies and procedures.”

Indeed, being a small firm does have its benefits. Ms Borg highlights that, while being small makes dealing with an ever-changing regulatory environment somewhat challenging, on the other hand, having a select number of clients on their books means they are able to get involved in their day-to-day operations, taking a personal interest in their business as if it were their own. “You also learn a lot about people – every client has a different story and a different approach to doing business, which can provide valuable lessons.”

The impact of COVID-19 on Business Relationships in Corporate and Financial Services

Speaking of lessons, 2020 proved to be just that due to the upheaval caused by COVID-19. At the start of the pandemic, Ms Borg spearheaded the re-organisation of the company’s operations to comply with social distancing measures, setting up all team members for remote working and ensuring everyone could work comfortably remotely. “That was the first step. Of particular importance was the availability of our team to service customers to ensure full business continuity in view of our functional management approach.”

“Meeting people face-to-face at a conference is a way to get to know them.”

Although currently working from the office on a shift basis, Ms Borg explains that keeping staff motivated during months of remote working had its challenges, all while keeping up with the day-to-day stress and challenges of work, as well as client demands, including new ways of working particularly in client communication as well as communication within the wider team on an international level.

“Before the pandemic, the Group used to invest a lot of time and money in travel, attending conferences, meeting people, business feeders, associates and partners; networking and developing the business across its various portfolios. This is also part of our due diligence process. Meeting people face-to-face at a conference is a way to get to know them, understand their plans for their company and analyse whether there is a fit between HBM Group or e-Management – depending on the service – and the client,” says Ms Borg. “So travel restrictions have also made it harder from the business development and onboarding perspective of getting to know new clients. We’ve turned to video conferencing until we’re able to travel freely again, but the absence of a personal touch has been felt, especially when onboarding new clients and retaining the personal rapport with existing ones.”

HBM Group is an established Corporate Service Provider with an appetite for diversification

While many of the challenges of 2020 have spilled over into 2021, HBM Malta also has a lot to look forward to. Now in its 17th year operating from these shores, the firm has indeed accomplished a lot. “Our client database has grown since we set up in 2004, and the Group has tapped into new areas of professional corporate services, namely Trusts and Trustees, as well as other regulated activities, including eGaming through our subsidiary company, e-Management, showing our appetite for diversification,” says Ms Borg. “The fact that we will also be moving to larger premises later this year shows that we are looking to grow here, both in terms of team and portfolio, as well as our investment in Malta and commitment to the jurisdiction.”

“HBM Group’s global network is a unique selling point of the Malta office.”

HBM Malta’s international connections place it in a unique position to cater for clients with operations in multiple jurisdictions. Ms Borg says that certainly, HBM Group’s global network is a unique selling point of the Malta office.

“Being part of an international group undoubtedly gives us an edge over other corporate service providers, as we’re in a position to offer all corporate solutions to our clients,” she concludes. “This cross-border approach helps us ensure we attract the right individuals and companies to the country and offer the right services to those particular B2C propositions. Also, knowing they will be under the same provider in multiple jurisdictions is certainly beneficial for operators.”