I think one of the biggest challenges for private banking in the digital age is how to maintain revenues while controlling costs to meet investor demand. This challenge is even more intensified by the overall digitization in wealth management, which has resulted in both a surge of new competitors and ever-evolving customer expectations.
Accenture recently conducted a survey of more than 1,300 investors across North America, The New Face of Wealth Management. The main takeaway is that investors prefer the best of both worlds with hybrid models—a combination of humans and digital capabilities.
Delving further into the survey data demonstrates that 66 percent of High Net Worth and Ultra High Net Worth investors responding to the survey also prefer a hybrid advisory model, with a surprisingly low 22 percent preferring a dedicated financial advisor. For most private banking firms, such a change in client expectations is significant and, in most cases, their existing legacy technology platforms are struggling to support the changes needed.
Previously, private banking clients preferred having a dedicated financial advisor. The fact that clients now expect even complex products like hedge funds and proprietary funds to be accessible in digital form is a wake-up call to private banking firms with older back and middle office technology that doesn’t support this functionality.
While there is no shortage of new fintech firms looking to serve the digital hybrid advisory market, there are actually only a few vendors able to address the complexities required of private banks. At Accenture, we are working with an emerging ecosystem of fintech firms that collectively support our clients’ ability to offer more effective digital capabilities. With client digital expectations and service complexities continuing to put pressure on existing platforms, the time to upgrade to the wealth platform of the future is now.
If you are considering updating your platform capabilities and would like to have an in-depth conversation about digital tools and possible solutions, please email me.