The recent McKinsey & Company’s European Private Banking Survey, which analyses private banking post-lockdown, suggests “Adopting a holistic approach to creating value for clients”, and to create value for clients a “total wealth” perspective is essential.
A single view of a client’s entire financial life in one place, with the ability to target market to different client segments together with adviser tools to allow secure digital communication. Where might a wealth manager find a tool like that?
The report makes for sombre reading regarding the future profitability of the sector but the clear message is that firms need to improve their client engagement through better use of technology.
More than two-thirds of clients want digital interaction.
Client preferences regarding sales and advice channels have shifted quickly for reasons of health and safety toward digitally enabled remote solutions. 71% of clients prefer multichannel interaction and 25% want a fully digitally enabled private banking journey with remote human assistance when needed.
The covid-19 crisis has heightened client demand for digitally enabled private banking. Mckinsey suggest that private banks face three new challenges -
- pressures on revenues and profits from the uncertainties brought about by the COVID-19 crisis,
- an acceleration in client demand for digital service,
- and a shift toward remote working.
The report recommends that “firms re-imagine advice and relationship management through technology.”
Content needs to be relevant and timely to its audience, i.e. a one-size fits all model will not work and firms should learn from the experience of successful social-media marketing that can target different messages to different audieces (e.g. women, millennials etc.)
“Something that would’ve taken weeks is now taking 3 or 4 minutes.” Jason Betteridge, Managing Director, Sutherland Independent Limited
Clearly, organisations need to do better, as in the 2020 Mckinsey survey “Affluent, Private and HNWI Customers’ Insights”. One quarter of clients said their main private bank made no contact during the COVID-19 crisis.
A third of clients, reported being unsatisfied with the quality of financial advice from their main private bank, and at least one in five clients moved their assets to another bank, due to their banks’ performance during the COVID-19 crisis. This behaviour is even more prevalent in affluent and lower HNW client segments.
The size of the opportunity in front of advisers with the right mindset to attract a more technology focused client base is huge.
However, as the head of a UK private bank quotes in the Boston Consulting Groups, latest Global Wealth report “The clients of tomorrow will simply not accept working with a wealth management provider that does not have top digital capabilities to let them access what they need at any time they want.”
If you've not started implementing your digital strategy, delaying because of the lockdown could find yourself left behind. Many of your competitors are ahead in their digital journey with 73% in their mid-advanced stages of implementation. It's not safe to assume things will be returning to the old- normal.
Two-thirds of firms put cyber-security and risk-management as their top priority.
This is closely followed by 60% of firms wanting to enhance their client experience.
The clients of financial advisers and wealth managers will continue to be those with complex financial lives who don't fit into the easy models for financial advice. Having sold their business, inherited significant wealth or received large compensation payments, they need help to understand what to do and reassurance to hold their nerve when the markets move against them.
Digital must complement your client relationships and advice should be clear and very personal rather than something clients could do for themselves using any of the online providers.
Our technology is designed to beautifully complement the service your deliver, putting your brand in your clients’ pockets and enabling you to be with your clients in the moments that matter.
Let us take you on a digital journey where you concentrate on the advice whilst we take of your technology, click here to book a personal consultantion.
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Sim Sangha is Business Development Director at moneyinfo limited.
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