Category Archives: Private Banking

Will FinTech dominate the wealth management model of the future?

This short note previously appeared as update on my LinkedIn profile – I recently authored a chapter in the WealthTech Book, a financial technology handbook for investors and entrepreneurs in global wealth and asset management.

My chapter examines the impact of FinTech on the wealth management value chain. The key question I explore is whether FinTech will dominate the wealth management model of the future, or if there still a place for traditional wealth managers. While I encourage you to grab a copy of the book and read the full chapter, the answer is yes!

A lack of innovation in the wealth management sector to date can be attributed to the scattered nature of the wealth management value chain. Banks, which typically own all aspects of the B2C value chain, have been more vulnerable to disruption with new, digitally enabled entrants picking off prize elements of the chain, such as loans or payments. In wealth management, multiple players tend to own specific parts of a B2C chain, making these markets more complex and less attractive.

However, as digital savvy individuals enter the wealth management customer base, a large number of innovative FinTechs are arriving on the scene. New market entrants are already starting to compete with incumbent wealth managers across the value chain. They are leveraging a different technology-based operating model to deliver better customer experiences, at a better price and a lower operating cost. Traditional wealth managers must disrupt themselves; otherwise they are at risk of being disrupted by new players.

To remain competitive, traditional wealth managers should review and transform their traditional service delivery models, find a new balance between human and technology (yes, they go well together!) and focus on the areas where they can add the most value. In addition, they should re-evaluate their business models including how to charge for services and the most efficient, cost effective way to deliver them.

The opportunities and threats from FinTech have just started. To date, we have only scratched the surface in terms of the amount of change we can expect across the value chain. Looking ahead, I anticipate considerable disruption across operating models, especially in terms of how technology and human elements will bring together the FinTech innovations with the traditional nature of the sector.

You can read more about this topic in chapter one of the WealthTech Book. I’d be more than happy to continue this discussion, and welcome you to send me a direct message or leave a comment below!

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Reflections of a year in wealth management

As most of you know I am a wealth management consultant by trade and the past 12-14 months have been big for me personally with many different exciting and international initiatives. Also personally, as I became a dad for the first time and I just enjoyed two months of paternity leave, something great offered by my employer and something I am very grateful of. It provided me with the opportunity to be a full time dad which has been fantastic. I also thought it would enable me to spend more time on writing my blogs when the little boy was asleep (I expected to be more productive to be honest, but you can write a few sentences here and there is what I noticed). The blogs are something I am passionate about, but I haven’t been able to do over the past months.

In this blog I want to provide an overview of the first hand experiences I’ve had in 2017 dealing with wealth managers and/or being active in the market in general. 2017 included quite some travel out of Australia into Asia, Europe and the US enabling me to engage with seasoned professionals and next generation entrepreneurs. While I have not tried to draw any conclusions I feel that my experiences provide a reasonably good indicator on some of the direction the market is moving towards.  Continue reading

Where to go with private banking and wealth management…

Frequently over the past months we have heard about private banks and wealth managers considering divestment of parts of their businesses (e.g. Asian markets for Barclays, Societe Generale and ABN AMRO private banking) or (considering) selling off their wealth management arms (e.g. ANZ Wealth, MLC) to name a few. Although ‘divesting’ is not the only way to increase profitability of the broader ‘enterprise’ it outlines the challenges the industry is currently facing to realise profit.

While there are clear differences between regions, most of the drivers of these challenges are pretty similar on a global scale. I outline key areas of focus, which are not completely ‘mutually exclusive’, but can be looked at from a variety of angles.

drivers-of-industry-challenges Continue reading

Driving ROI out of customer experience improvement initiatives at private banks and retail wealth managers

A customer experience is made up of multiple touch points in a given context (rawson et al 2013) and therefore comprises of all the little things that happen in customer interactions.

 Customer experience initiatives are being deployed at a rapid pace in the broader private banking and retail wealth management industry. New value propositions, operating model designs, mobile apps, remote financial advice solutions, you name it. Many wealth managers (I use wealth management in the broader context, which includes both private banks and retail wealth managers) approach these initiatives in isolation and not as part of a broader customer strategy.

 This doesn’t mean to say that the initiatives undertaken are not good, no! Some of them are great and (aim to) fulfil a defined customer demand. But there are risks involved with the approach as mentioned above, like:

  1. Wealth managers focus on areas that don’t have the highest priority for their HNWI (High Net Worth Individual) clients as they haven’t assessed in detail what the real customer priorities are
  2. Fragmented approach of multiple initiatives, each with the idea to improve customer experience
  3. Losing “eye on the bigger picture” (fulfilling the customer needs)
  4. Initiatives are driven by internal organisational desires rather than a focus on end users and enabling value exchange between customers and the organisation

 Note: This blog is addressing the role a customer centric focus plays in driving ROI for private banks and retail wealth managers. It covers both obvious and less obvious drivers and influencers on these entities.
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