Private banks that do not use information technology and mobile services could become “dinosaurs,” ABN AMRO Private Banking has warned.

Private banks that do not use information technology and mobile services could become “dinosaurs,” an executive at ABN AMRO Private Banking is reported to have said yesterday.

New entrants such as Nutmeg in the UK and Wealthfront in the US are a threat to banks that don’t keep up with the times, Hein van der Loo, head of strategy at the bank, told a conference in Zurich yesterday, Bloomberg reports. His comments chime with results of a report covered exclusively by this publication a few days ago on the rise of so-called “robo-advisors”, including the aforementioned firms. That report, from MyPrivateBanking Research (see here), noted that global assets under management of robo-advisor services (firms such as WealthFront, Personal Capital and Betterment) will reach $14 billion by the end of this year, with 83 per cent of this money run by US-based firms. By the end of this decade, such advisors will run $255 billion of client money.

To put that figure into context, the report notes that conventional wealth managers in the US currently oversee around $5 trillion of assets, so the “robotic” element is still tiny, but not insignificant in potential.

ABN AMRO’s van der Loo said of these firms: “These are the real competitors. They’re actively there and they’re stealing clients from us.”

Nearly two-thirds of the world’s high-net-worth individuals expect to manage most or all of their wealth digitally within five years and would consider switching providers that provide such services, Capgemini and Royal Bank of Canada said in a report in June.