This is the second half of a two-part feature examining how well, or otherwise, wealth managers are using mobile technology.

The following interview forms part of WealthBriefing’s Technology and Operations Trends Report for 2015, which will be launched later this month. In this special preview, Steffen Binder, managing director of MyPrivateBanking Research, outlines key action points for wealth managers wishing to get up to speed on mobile. (To read Part 1, click here.)

Key areas for improvement
It seems that cutting-edge app developments like instant messaging, biometric security and digital signatures, may lie very far off for the many firms that are still falling short on the basics, like focusing app design on too narrow a range of devices, Binder said.

“You really have to think through your responsive design and make sure you can accommodate your app to the 2,000 screen sizes and devices that are out there,” said Binder. “It will be all sorts of generations of iPhones and Samsungs, but also very old phones that might be six or seven years old; it will be all the types of tablet; and then there’s also this blurring of lines between tablet and smartphone as you have now phones with huge screens and hybrids that are between.” 

Exacerbating this issue is the fact that some institutions continue to neglect Android devices completely despite its huge user numbers, although it is easy to see why firms with limited resources might focus on Apple devices due to its very strong brand. Yet for Binder, such firms are really restricting their reach. “Banks still have this mindset that wealthy clients are typically Apple users, which might be true in Switzerland to a degree, where Apple has a very strong market share,” he said. “But I think the minimum is to offer Apple and Android native apps, otherwise you won’t reach a significant part of your target audience. In Asia, Android has a much stronger market position.” He further believes wealth managers should also consider Windows Phone, as its market share is growing among a very specific professional and entrepreneurial segment who like to be able to easily connect with their “Windows world”.

Accommodating all these permutations of devices is clearly going to be an expensive business, particularly when seen in tandem with another common failing: infrequent updates. “Wealth managers’ publishing cycles are far too long. It takes them six, even 12 months for them to come out with new versions,” Binder said. “So when there is a new operating system this makes using the old version of the app awkward.”

Apps are far from once-and-done
According to Binder, ongoing investment is the most significant app consideration, beyond an initial outlay that he said will generally be a “six-figure number” overall, depending on the extent of external resources required (like having an agency programme the app) and integration costs. “Then they must come up with a new release every few weeks and have a testing cycle where clients come in and test the app,” he said. “If you are going to do it properly then you have to outsource this kind of work to a good agency; then you have good technical support for users of the app.”

Wealth managers’ mobile motivations must be strong to justify this level of investment – and they are, according to Binder. Improving retention is the first, since offering a “great set of tools, analysis and research, as well as great service” is likely to make clients stickier amid such variable mobile provision in the market. Ideally, the aim is for clients to use the app(s) “day-in, day-out” and to this end wealth managers should probably consider lifestyle content and value-added services in addition to portfolio information, research and communications. 

Binder said: “You have to look carefully at your clients’ needs and preferences. Typically, shopping is extremely important to Singapore-based clients so if you can offer special deals to your valued clients via an app that will really bring you closer to them.

“Besides the core features, every bank should think about supplementary apps which cater to the specific needs of their clients and allow you to get closer to them by serving them with interesting content – be that for sponsoring, shopping or social responsibility,” he added.

However, institutions are going to have to work hard to accurately track the return on investment from their mobile efforts because “correlations can go both ways”. “I’m sure that there is a very strong positive correlation between app usage and client retention,” Binder said. “Longstanding clients are more likely to use the app because they are more accustomed to you as a bank; on the other hand, a good app is another reason to stick with the bank.”

Mobile-first
Perhaps far more significant is the fact that “mobile is a loyalty play, but also a new customer play” where direct ROI could be far easier to see. Evidence suggests that people are increasingly downloading apps from institutions that are not their banks, said Binder, and therefore a few forward-thinking institutions now offer research apps on general release which give access to 20-30 per cent of the output offered to actual clients. “I think this is a very smart move,” he said. “You whet the appetite of those people, and of course someone who is interested in this research is also likely to be HNW.”

As is highlighted in the Technology and Operations Trends Report 2015, institutions have to “move with the times” and go to clients where they are – which today is increasingly on a mobile device. According to Binder, many are simply failing to grasp just how mobile-orientated private clients can be. 

“I think some institutions don’t realise at this point that precisely their clients – the HNW individuals and families – are the most modern and sophisticated users of mobile devices,” said Binder. “According to the last survey we did with HNW individuals in the world’s five biggest wealth management markets, mobile has superseded desktop and notebook usage.” 

He concluded: “You have to realise that you have to go to a mobile-first strategy. Nothing else makes sense, but we don’t see that mindset very often at this point. You find it here and there, but the majority are still a few years away from this strategic decision.”