Fintech on Friday: Embedding digital into a private bank's DNA
When it comes to digital innovation, the private banking and wealth management sector – by its own admission – is lagging other industries.
On the technology side, chief technology officers (CTOs) fret over the costly and mammoth task of overhauling legacy information systems to centralise client data and satisfy appetites for instant insights. On the people side, advisory teams are torn between time-intensive activities, such as identifying new clients, and continuing to develop relationships and assets with existing ones.
These age-old challenges – to drive down costs, grow client assets and scale business operations –continue to preoccupy C-suite strategists. But instead of simply cost-cutting or letting go of talent that has not kept pace with workplace requirements, forward-thinking executives are investing in digital tools, insight, and innovation to further empower staff to engage with high net worth (HNW) clients.
Understanding where investment can most effectively accelerate transformation is critical. But kickstarting cultural change and encouraging the embrace of technology company-wide is even more important in ensuring that those whom digital is intended to assist benefit most. As well as investing in technology, CTOs should therefore also reconsider how digital is positioned, especially when it comes to conversations with advisers and other frontline staff.
Personalising communications
Digital solutions help advisory teams service an increasingly global client base, in real time and at scale. These solutions can reduce the time it takes to research and construct customised portfolios for clients. They can also assist with more sophisticated tasks like running complex analytics, suggesting asset class allocation reviews, and even producing personalised client-ready collateral – all at the click of a button.
Given today’s ongoing global uncertainty and market volatility, the need for timely, digestible, and actionable information is more pressing than ever. CTOs can therefore offer advisers technology that allows them to work more closely with their clients, even when there are more of them to service.
FactSet’s 2017 research revealed that wealth managers must move outside of their comfort zone to make resources more engaging, concise, and dynamic for clients. HNW clients want to see a range of improvements reflected in the communication materials they receive from their wealth managers; this wide range of preferences would be challenging and time-consuming to produce and personalise without technology (see chart).
Embedding a digital culture to deliver real progress
As well as identifying relevant and truly beneficial technology, CTOs must consider how to create a digitally-supported information culture. This will encourage advisers and their wider teams to experiment with new tools, share experiences, and learn from each other. It will also help progress the digital vision from the C-suite to the mainstream, embedding digital into the firm’s DNA.
Successful implementation will be contingent on effective internal communication throughout the organisation, developing people by equipping them with relevant tools, and giving them greater impetus for change. Wealth managers who do it well tend to secure employee buy-in to digital transformation through ongoing consultations with targeted user groups and regular communication of its intended advantages.
While challenging by their nature, digital transformations will continue to revolutionise every aspect of the wealth management relationship. CTOs can therefore pre-empt frictions by addressing advisers’ key concerns head on and promoting the behaviours that will make the biggest impact with HNW clients.
Philipp Zerhusen is vice president at FactSet
