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EXCLUSIVE: Where Next For Wealth Management Software - WealthBriefing London Summit

Chris Hamblin and Tom Burroughes, London, 10 June 2015


Love it or not, you cannot get away from technology and that applies to wealth management. Senior industry figures recently debated trends at the WealthBriefing Summit in London.

At WealthBriefing's recent London summit, held in the Guildhall a stone's throw from the Bank of England, eminent panellists discussed the part that software was playing - and would play in future - in private banking and the wealth management sector in general.
On the panel with Stephen Harris, WealthBriefing's guiding mogul, were René Hürlimann, a Swiss software vendor at Appway, Peter Schramme, a Belgian software vendor at Objectway, Tim Tate of Citi Private Bank and Steve Dyson, an experienced wealth-manager-turned-consultant. Sponsors for the conference were Appway; Dubai International Financial Centre; Objectway; smartKYC; ProFundCom; Standard & Poor’s Money Market Directories and K2.

For a while now, financial firms have been introducing digital channels to interact with clients. When asked to enumerate the differences that this has made, Tate said: "There's a relationship angle and a reporting angle. Customer behaviour is changing all the time and will continue to do so. Digital technology is becoming more important in all our lives – more and more of us are using social media, online retailing or Facebook, for example. At Citi we see that the behaviour of UHNW clients are no different from the rest of us."
He said that digital channels had had a great effect on client reporting and onboarding, adding: "In February last year – after about one year of using it internally – we launched our client platform to our clients. Whatever the bank sees, the client sees. It changes the dynamic of the relationship. They [clients] now come to meetings with tricky questions ready for the relationship manager, which is interesting to see. About 60 per cent of our clients are signed up to the platform, although adoption and usage varies from region to region."
Towards a paperless environment
According to Tate, Citi did not see the platform as a move towards greater self-service and therefore less effort on its part to serve customers – instead, it is trying to make it a way of enhancing the relationship between the bank and the client.
Tate also thought that the days of paper were ending for another reason: "One of the biggest complaints we hear from customers is that they are receiving too much paper through the post. One of our clients saves up all the paper and takes it in to meetings with us every 3 months, questioning why we should be bothering him with it. Obviously some of it is a regulatory requirement. Through the introduction of our digital platform, we've seen a drop-off in the number of customised reports being sent to clients."
Interactions with clients
The panellists were asked how wealth managers use technology to improve and cement client relationships. Hürlimann noted that technology can improve the client experience by producing “event-triggered advice”. This includes indicating a change to a risk profile, or using the information to propose suitable products. Technology can also foster greater collaboration at the client’s convenience, such as working together via screen-sharing on any device, anywhere. In addition, such changes and communication will be recorded with the very same technology for auditing purposes.
“Automation and rules-based guidance also saves costs; it reduces complexity and enriches client satisfaction, he said. We believe it all plays together and without a flexible end-to-end software solution in place, the whole topic is far too complex to be managed efficiently,” he said.
Peter Schramme agreed: "It's right! I think digital technology is completely changing banks' interaction with their clients. The digital channels towards their client are not eliminating the face-to-face interactions. It is not an `either/or’ but an `and/and’, `omni-channel’ reality. Most financial institutions still have inconsistent data-sharing across their channels. As many clients start blending channels – real omni-chanels quickly become a real business issue. Moreover, digital enables you understand the behaviour of your client much better. As a simple example, the usage pattern of the channels a client uses can already tell a lot.”
What are clients asking for in terms of technology? What are the trends? "They're not asking for technology per se, but for the choice to interact. They're also asking for personalisation, consistency across all channels – everything they get in their digital life outside of banking,” Tate said.
The fintech revolution
The panel then came to the subject of fintech challenger companies. Tate said: "A lot are doing one or two customer journeys. How far these new entrants disrupt the industry [is to be seen]...among UHNWs the personal touch is still very important. Among the mass affluent, though, I think the fintech companies will gain some good share pretty quickly." The panel seemed to agree that these small businesses were good at design and this allowed them to score over the banks in that particular respect. Tate added: "Banks are not usually best at design."
There are a number of factors which make driving digital projects challenging for banks, some within their control, others which are dependent on external factors. In one encounter he implied that things had been held back by the non-availability of 3G or 4G infrastructure in some regions, adding that "3G/4G and WiFi availability have been held back the adoption of mobile digital. Also, many financial advisors are still sitting in their offices using desktop computers." He noted that the bank's original expectations had been confounded, perhaps quite pleasantly, in another way: IT-literate HNW people of all ages were embracing banking technology. "It's not just a next-generation play as we thought at the outset. Our oldest customer using our digital tools is 97," he said, adding: "In 2011, we were focused on iPad. But we've seen the importance of multi channels."
Tate had advice for the audience about allowing users breathing-room to talk to their financial institutions about new designs: "One of the best ways to get feedback – be nimble. Put out new functions and get people to react. Let them use it. Design is one of the big areas we're in. Some people thought our user interface, which was coloured black, looked contemporary and was very easy to use, however one referred to it as "the Black Hell" – it was a chalk and-cheese reaction. I was surprised by that because many people thought it was a good user interface, and most of our original testing supported that view.
"I think a lot of these small companies are using technology to try to disrupt the financial industry. They usually focus on some very specific task. They get it to appeal to a certain type of customer need," he added. 

When Harris pressed him about whether this was a good or bad thing, he said: "I think it's an interesting thing!" He said he thought that the chance of such companies eroding Citi's share of the "ultra-high space" was "relatively small."
Dyson said: "We've been working with a number of fintech start-up firms and see them as potential disruptors in the wealth management sector. The fintech market is growing, with advice market entry. Some firms are introducing hybrid models and customers start off with digital tools then go to an advisor."



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