Coupled with annual results announcements, a number of other banks revealed their plans for online wealth management services last month. In...
Coupled with annual results announcements, a number of other banks revealed their plans for online wealth management services last month. In a significant number of cases these initiatives will be launched in partnership with Internet firms.
Deutsche Bank is planning to launch a global online brokerage service in partnership with the U.S. firm National Discount Brokers Group (NBD), which has US$12.2 billion under management in online brokered accounts. NDB recently took first place in the Barron’s Best of Online Brokers. Bessemer Trust Co. is to offer its HNW clients online brokerage in a deal with DLJ Direct. The agreement will allow Bessemer clients to make 25 free trades annually. Meanwhile, Standard Chartered has linked up with Pacfusion.com to build a site that will offer banking and investment services, such as mutual funds and insurance products in Asia. The site will also host related offerings from independent financial content providers.
Halifax, meanwhile, paid £750 million for a 60% stake in the St James Place Capital, the HNW boutique which is also the parent company of the private client insurance specialist J Rothschild Partnership. The two groups plan to co-operate to launch a private banking outfit later this year. This private bank may be rebranded as St James Place Private Bank and will combine the St James 1,000-strong sales force with Halifax’s product and technological capability. Halifax plans to launch its Internet wealth management offering, Intelligent Finances, later this year.
The one element these deals have in common, is the focus on the “mass affluent” market, through the provision of banking and brokerages services. The goal of providing online private banking services via the public Internet remains somewhat elusive.
MorganOnline is clearly an effort to tap this market by pitching the services at the top market segment. However, very few players have developed online relationship management systems specifically for private banking clients. This largely reflects the complexity of gearing services that can match individual clients needs—in the way they would expect from a private banking relationship. Key issues are security, the ability to provide high-end tailored services, such as market analysis that is geared to the client’s needs and advice on third party products, as well as the ability to deliver the service in the client’s own language.
Credit Suisse is widely seen as the market leader in the area of tailored services. FundLab and InsuranceLab that enable wealthy clients to compare information provided on product offerings from other firms. CS also offers a service called Interactive Investing, which gives detailed information on IPOs and capital markets products offered by a range of leading international banks. There are a number of other players, however, that are also looking to provide a more tailored “private banking” service. Citibank Private Bank is planning to expand its international online relationship management system to offer product and market information, secure e-mail and multi-lingual functionality this year. The bank launched online private banking services last September, enabling clients to view their Citi portfolio and check account balances. Last month, Citi upgraded the service to offer daily portfolio monitoring and monthly statements.
Meanwhile, Bank Vontobel has announced plans to set up an online bank that will operate in the Swiss tradition of private banking. Vontobel has applied for a separate banking licence for the independent subsidiary. Although the bank has not released details of the project, it is expected to focus on information and advisory services rather than online broking. The project is being developed in conjunction with I-D Media, which will bring its online marketing expertise to the initiative. Bank Julius Baer, meanwhile, has announced its plans to launch a online portfolio tracking service for clients.