Category Archives: Wealth Management

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

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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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Wealth management – What are you doing next?

What a time to be in the wealth management industry… – What are you doing next?

In my work I am confronted daily with clients’ questions on what they can expect next to ‘hit’ them. We read and hear every day about startups, fintechs, robo advice, disruption etc. and I will obviously share my perspectives on these, there is also the logical next question of “what are you doing next?” All wealth managers know too well that their business model is under pressure and that significant change is expected (it has already started). Reality is that in many cases most of their budgets are still allocated to initiatives focussed on legacy technology and regulations. If they are considering top-line growth initiatives these tend to be approached in isolation or as an add-on to the existing practices, instead of being integrated properly into their broader business model and operations. This is interesting considering that there has been a growing emphasis being placed on customer centricity (and contrary to this, legacy technology and regulations are mainly internally focussed initiatives).

SocialFS 21 v2

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Change creates opportunities

Some observations to consider before you continue reading…  Continue reading

Customer Experience: Playing maturity catch up…

Observations from the Sydney CX Design & Implementation Conference

(11 November – 12 November 2015)

I was lucky to be able to attend the Customer Experience Design & Implementation conference in Sydney last week listening to and speaking with organisations as each shared their experiences, success stories (of course) and learnings (can’t be enough) from organisations covering (but not limited to)  Telco’s, Financial services, Age-care, Government, Recruitment, Logistics, Design, Technology vendors, Fintech and Startups.

It was great to hear the variety of ways organisations make an effort to improve customer experiences across different industries. Such perspective across industries becomes increasingly valuable as many of the experiences people have to one industry drive their expectations and perception of others. As a result, a glass ceiling is put over industries with lower maturity levels in regards to customer experience and related expectations. From my view, which focuses on financial services and wealth management, those industries with lower customer experience maturity levels must play ‘maturity catch up’ versus other more established industries and/or organisations.

In case you are not interested to read further for more detail, buzzwords to summarise the conference include: #Employeeengagement drives customerengagement; #Designthinking; #Listening; #Empathy; #ValueExchange; #Culturalchange; #Differentiateyourexperience; #Multiscreen/#Multidevice; #Rewarddrivescustomerbehaviour; #Customerownsthejourney; #Actionable; #Beingandfeeling; #Voiceofthecustomer; #Nuroscience; Continue reading

Resistance to change to a Needs Based Segmentation Strategy cannot be the advisor anymore…

Last year I spend two blogs around the need for adjusted segmentation models and adjusted pricing and of business models for the private banking industry.

In the first blog I detailed the importance of a Needs Based Segmentation Strategy, but also outlined some of the challenges organisation faced:

“Changing your segmentation strategy impacts the complete way a firm needs to think and should operate. It is not only operational (cross business unit thinking) it is also a cultural shift in the organizational thinking and the position of the client in the operating model. While the relationship manager was in the middle of the operating model for years, the HNWI client wants to be at the center of the operating model now and uses the different facilities around them (e.g. branch, advisor, call center, online, mobile, social media, …). The HNWI expects these facilities to be available, because these clients have personal preferences and want to make the decision themselves. -“I would like to use the channel I want to contact my bank, not the channel I have been asked to use”. – Not all clients want to be fully in control, because they like to have everything managed for them, but even this group seems to be increasingly involved in managing their own wealth. These examples, again, show the different clients and the different way of being serviced (with a different price tag that should be expected from a cost to serve perspective)”. Continue reading

The transition from cassette tape to digital music in the wealth management industry

In 1963 Philips founded the cassette tape. It became very popular next to gramophone records and turntables. The cassette tape was one of the first, or THE first, portable music bearing players available to the mass market. These cassettes where suitable  for use with several players (cassette recorder or deck and Walkman) and, until the end of the 90’s, cassette tapes  were actively sold, having hailed a new era of music accessibility.

Over time, Philips again led the way in disruption and founded the Compact Disk (CD) in 1977, which became even more popular and as we know, still exists today. After some years, individuals could even create CDs themselves with music, movies or even documentation (legally or not, but that is not the focus in this case). People seized the opportunity for ownership. The CD then evolved into the less popular minidisk.

Today, we are all familiar with digital music e.g. the MP3, or online music portals like Spotify, ITunes and so on (all not from Philips by the way).

Parallel with the wealth management industry

The wealth management industry is evolving as well, but the transition is not going very smoothly and requires time (it goes slow!). Historically, as I have written in previous blogs already, the wealth management and private banking industry had a niche focus on the rich of this world that wanted to invest to grow their wealth. To make sure the rich were willing to store their funds at a particular bank, the bank went ‘all the way’ to win them as their client. Red carpet, expensive lunches, tickets for whatever event (I know I formulated it a bit short-sighted). And this still exists. But wealth management has developed to be available to ‘all’, not only the super-rich. Also, a (less rich, but still having enough cash) group called “mass affluent” came to be targeted by the banks. And so, this is where we are today as banks are increasingly looking to reach a broader group of (potential) clients (even so, this doesn’t mean that mass affluent clients receive the same treatment, which to some extent is understandable). Continue reading

No digital? No joy!

Why wealth managers without an integrated digital offering are out of play

My last blog is already been quite a few weeks ago. It has been very busy on all fronts, but not with blogging on SocialFS. A recent visit to Hong Kong as well as several conversations with many interesting people in the wealth management industry from Europe, North America and Australia formed some interesting views around the use of digital tools within the wealth management industry.

Soon from now we might end up saying that wealth managers that are not meeting HNWI demands regarding digital are out of play. I had the honor to present the World Wealth Report in Hong Kong in June. This report shows that an average of 65% of the HNWI population across all age groups and wealth bands are thinking of leaving their wealth management firm when there is a lack of digital (enabled) services. For the younger HNWI population this is even 80%. This research has been conducted among over 4500 HNWI globally.

The report also shows that there is an increase in the preference for digital contact versus a decline on direct contact. (Please see the figure below).

Direct vs Digital

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