Digital platforms have had a huge impact on almost all industries. For private banking services, this could be an opportunity to improve their offerings and deepen their relationship with increasingly tech-savvy clients.
One of the enduring effects of the pandemic will be our new familiarity with digital platforms. Even those of us who were previously digitally illiterate have become accustomed to interacting with family and friends online during lockdown, while the business landscape has been permanently changed by how quickly firms have pivoted to remote working.
The speed of this transition has changed the fabric of financial services, and business leaders have an opportunity to make this a change for the better. Companies can leverage the growing familiarity with digital services to expand their market offering and create an entirely new kind of relationship with their clients and customers.
Private Banking – more than a Financial Service
Private banking has undergone a more dramatic transition than most industries. While other areas of financial services had embraced digitalization prior to the pandemic, private banks had a tendency to stick to the traditional ways of doing business. Research from Refinitiv in March 2020 found that 46% of wealth management clients are only partly satisfied or not at all satisfied with their digital offerings.
Increased digitalization is therefore fundamentally changing the way that private banking companies communicate and build trustful relationships with their clients. Rather than face-to-face meetings being the basis of a relationship, the pandemic has shined a spotlight on the importance of speed and adaptability of advice. This gives financial services leaders an opportunity to develop their offering and provide partnership and mentorship through turbulent times.
Today, the private bank is more than just a financial service. It is a partnership that allows us to achieve true wealth – not just financial security, but the ability to enjoy life and achieve our personal goals. Digital platforms in financial services are becoming an integral part of facilitating this supportive relationship and ultimately delivering a better service.
The Human Touch
While perhaps seeming paradoxical, digitalization has made it possible for financial services companies to enhance the human factor of their offering. Technology and digital platforms have enabled companies to enhance their focus on customer relations by truly analyzing client data and ensuring they respond in a personalized way that is tailored to customer needs.
Companies need to systematically position themselves from the customer’s point of view and create processes that work for them. Digital interfaces help to automate processes and ensure that client interactions with their banking provider is as streamlined as possible. This automation within the application provides a guarantee to the client of legal compliance, and a strict implementation of processes, as well as reinforcing the security of their data. Trust is key to providing a complete service to clients, and digital platforms can ultimately ensure that strict and compliant automatic processes are followed at all times.
Trust is key to providing a complete service to clients, and digital platforms can ultimately ensure that strict and compliant automatic processes are followed at all times.
More Wealth for More People
There has long been a need for a more digital form of wealth management and private banking. Talking to a representative sample of people in the mass affluent market in Switzerland, we found 40% of people were actively looking to switch their private banking provider, and 70% would be open to using a bank with no branches at all, which works solely via a smartphone app. This market has now grown dramatically since March.
A digital-first offering can also be leveraged to introduce greater versatility to financial services, and ultimately create a more beneficial relationship for clients. The future for financial services is in demystifying the wealth management and investment industry for everyone. This creates a multi-faceted partnership in which both client and company are interacting on multiple levels.
As well as evolving these relationships, digital platforms enable businesses to open up their services to entirely new segments of the population. The mass affluent population has long been underserved by the traditional banking landscape. Established high-end wealth management services have been out of reach, which has left them with the inadequate option of an off-the-peg savings account from retail banks. By utilizing artificial intelligence and digital platforms, processes such as onboarding can be expedited, physical premises can be massively cut and the cost of the overall service reduced.
While all of our lives have become increasingly digitalised, businesses in all sectors now have the opportunity to foster new kinds of client relationship and diversify their business offering. In the end, banking should adapt to people and not people to banking.