BREAKFAST BRIEFING: Measuring The Impact Of Technology On Wealth Management

Tom Burroughes Group Editor 28 November 2013

BREAKFAST BRIEFING: Measuring The Impact Of Technology On Wealth Management

Wealth management industry professionals recently gathered in London to discuss how to deal with the impact of modern technology on the sector, particularly at a time when regulatory costs and challenges continue to mount.

Wealth management industry professionals recently gathered in London to discuss how to deal with the impact of modern technology on the sector, particularly at a time when regulatory costs and challenges continue to mount.

Under the title, Mobile Demand And Regulatory Change - Are You Riding The Modernisation Wave? the event, which was held at the Carlton Club in London’s St James’s district, examined how the sector is continue to embrace the digital age. Speakers were Nigel Tranter, who is chief architect of Europe retail and business banking at Barclays Bank; Veronique Ummels, vice president, strategy and development for private banking international, ABN AMRO; David Poole, head of Citi Private Bank, UK & Ireland, Shaun Crowley, UK sales director, Objectway Financial Softwareand, and Cath Tillotson, who is managing partner, Scorpio Partnership. The panel was chaired by Stephen Harris, publisher of this website. Objectway sponsored the event. (To view full details of speakers, click here.)

Barclays’ Tranter looked at his company's recent achievements and goals in terms of digital strategy for the European retail mass-affluent customer. His central message was that the digital strategy is helping relationship managers better meet customer expectations and ambitions.

"We started our digital strategy for Europe 12 months ago as a solid project. Investment is one key path for us and we set up with a real simple vision so the vision was - the customer. In retail we had a mass-market and a small mass-affluent segment in Europe and we are now moving towards broadening and growing our retail mass-affluent customer segment. That's the target area for us. As a bank in Europe, we're building on our brand and using our digital strategy to continue to do this. We are seen as a niche, so that's the direction we're heading...focusing on the more mass-affluent customer – contrasting with our Wealth & Investment Management business, where the focus in on high-net and ultra high-net worth clients globally,” he said.

Tranter said his bank's mass-affluent customers in Europe demand "superior service and flexibility around multi-channel offerings. Our mass-affluent customers are very tech-savvy and very mobile. They want customer service that comes to them. We have to target our offerings and technology at that”.

He listed Barclays 'success factors' as "removal of paper and straight-through processing.”.

Looking at the digital landscape in Europe amongst Barclays' competitors, he noted: "One Spanish bank had a video service capability online which increased their product sales by 25 per cent almost overnight. Another in Portugal launched an innovative asset management trading platform that was an immediate success. One bank in France had a personalised digital assistant that appears to help you on any customer journey you want.”

"In terms of digital strategy for the customer, this is a revamping of our online channels. It entailed a complete re-branding, with a partner, in Europe,” he said.

“We've developed a true multi-channel strategy where we can start and stop a customer interaction in any channel and the context of that conversation will flow between channels. So whether they're coming through the self-service, whether it's through a tablet, whether it's through a smart could actually go into a branch and have a one-to-one with the relationship manager (RM). The context moves, so it's really and truly multi-channel,” he added.

He was enthusiastic about the application of surveillance techniques to ordinary banking: "In Wealth & Investment Management, we use biometric signatures and enrol customers when they call in.  All of this happens in the background in a non-obtrusive way and from a customer standpoint, is simply a conversation between them and their RM.  We only require between 40-60 seconds of customer speech to complete the enrolment.

"Next time a call comes in, it automatically recognises the biometric voice and who the customer is. So there is no IVR (interactive voice response)– it just goes straight to the conversation with the customer. And we've driven those kind of validations and authentications with our security teams to make sure that we don't breach any compliance or regulatory requirements that we have to be very mindful of. The journey for the customer is a very easy interaction,” he added.


The panellists were asked how HNW clients' expectations are changing in relation to mobile communications and banking.

“Because many clients are in their 60s, there is often an assumption that a digital strategy is not relevant to them. But I think we really need to ask if senior managers know what it is that their clients want,” Scorpio’s Tillotson said.

“We know because we research what high net worth clients around the world are looking for from their wealth manager. Last year, we focused our Futurewealth research exclusively on digital wealth management and what is absolutely clear is that the richer clients are, the more digitally engaged they are, “she continued. “They can afford the technology. They play with the technology. They are up to speed with what they can do with it and what they can't do. If they can't do it with a private bank, they'll do it with a premier bank. You just have to remember that HNWs are early adopters of all technologies,” she said.

“From a private bank’s perspective there is a cost implication, because delivering a high level of wealth management service digitally can mean a significant investment different channels. And therefore it is absolutely crucial that we know what our clients want before we make that investment,” she said.

Silver surfers

Crowley spoke about how “silver surfers” know how to use applications: "It's not just the younger generation who are engaging digitally. The older generation are among the largest up-takers of iPads and it's not because they're tech-savvy, it's because they don't need to be tech-savvy. They've got time on their hands and they're on Facebook."

Poole agreed, noting that private banks and retail banks had to follow different models when it came to technology. "We're not 2,500 to 1, we're 25 to 1. It [mobile banking] absolutely needs to be a core strategy. The silver surfers are absolutely...on the ball. I think that's the way the world is going," he said.

Veronique Ummels added weight to the argument that HNWs were “tech-savvy” by mentioning a client who "skipped the online phase and moved on directly from the personal contact to mobile”. There was no indication, however, that relationship managers or RMs were in any danger of being replaced digitally.

"We've found that they [the clients] want to speak to the RM rather than take a do-it-yourself approach,” she said.

The elephant in the room

Harris asked whether “the elephant in the room the fact that technological advance at some point will replace RMs totally?"

The answer was a resounding 'no'. Tranter called it "the Arnold Schwarzenegger Terminator scenario”.

Tillotoson said: "What if you step onto an aircraft? The aircraft may be able fly on autopilot, but would you step onto an aircraft that didn’t have a pilot at all? In a wealth management relationship, you're putting your life and your wealth into someone else's hands. While the technology is there, we're still reliant on trust between two human beings and that cannot be – yet – a virtual experience."

Citi’s Poole thought that the retail market might sustain automatic advice, but not the wealth market.

"We're a long way from that. It's too complex. We can't have a robo-advisor yet, but we can have a hybrid model, pushing information to the HNW and allowing him to do his own research within the framework that you set up,” he said.

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