Technology

WHAT THE CONSULTANTS SAY: EY On Next Gen, Digital Issues In Wealth Management

Bruno Patusi and Bernhard Schneider EY Financial Services Switzerland 1 May 2014

WHAT THE CONSULTANTS SAY: EY On Next Gen, Digital Issues In Wealth Management

Consultants at EY Financial Services Switzerland run the rule over the technology side of private banking, but caution that the digital revolution will not replace face-to-face relationships, but augment them.

This publication has approached a raft of consultants operating in the wealth management sector to give their views about a range of challenges and opportunities for the industry in different parts of the world. A number of articles will be released in these pages in the coming weeks and we hope readers find them stimulating. The articles have been sought by this publication and also by Bruce Weatherill, of Weatherill Consulting, and also chairman of ClearView Financial Media, publisher of this news service.

This item is by Bruno Patusi, a partner at EY Financial Services Switzerland and head of wealth and asset management. Bernhard Schneider is senior manager in the customer practice at EY Financial Services Switzerland. The firm talks about the technology side of private banking. While it is based in Switzerland, its arguments have global resonance.


The private banking industry has stabilised noticeably since the outbreak of the financial crisis. Between now and 2017, annual growth in the investable financial assets of private households is expected to be 4.8 per cent. This, combined with demographic trends and rapidly advancing digitisation, represents a significant opportunity and challenge for the private banking sector.

Today’s generation of private banking clients is increasingly thinking about how to transfer its assets to its heirs. Based on current knowledge, the younger generation in the 21-36 age group, the so-called “millennials,” is keener than ever to preserve its assets. In other words, it is equally or even more risk-adverse in terms of investment strategies than its parents’ generation.

Unlike the latter, the millennials are accustomed to dealing with the latest technologies on a daily basis. This imposes new challenges on the advisor of private banking clients. While clients were previously supported and advised by their personal client advisors, with growing digital networking, clients will increasingly take over control of their banking relationship and decide when, how and how often they wish to make contact with their banks and advisors.

Based on experience in other sectors, it is only a matter of time until digitisation takes a firm grip on private banking. Developments in the digital world, such as “crowdsourcing,” will have a permanent effect on customer behaviour and will result in close scrutiny of conventional private banking products and services including their prices.

At the same time, digitisation is not only restricted to the user interfaces immediately visible to clients and client advisors (“front-end”), to which we anticipate it will be identical in the digital world, but extends along the entire value chain to the middle and back office (“back-end”).

Digitisation also enables processes and procedures to be structured more efficiently and client data to be used more effectively. After all, in the digital world clients leave behind significantly more fingerprints, which, thanks to state-of-the-art data analysis tools and technologies, banks will soon be using for tailor-made advertising of products and services.


The trend towards digitisation will not replace personal contact as an advisory and distribution channel which will continue to be the primary client retention element, but it will significantly expand and enrich it. Properly implemented, digitisation offers a major opportunity for positive differentiation in the marketplace.

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