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Instagram: Even banks can save 1000 words by posting a pic

Thursday, December 18th, 2014

Social media’s disruption of communication is overwhelming financial institutions and creating confusion about which social networks they should focus on. Instagram, a mobile app based photo and video sharing platform, has skyrocketed to 300 million active users thus surpassing Twitter and making Instagram an important global media platform. But the pace of change and the mind boggling competitive dynamic in the social media industry is confusing to more conservative institutions like banks and wealth managers.

As our recent report Social Media for Banks and Wealth Managers: 2014 shows, it’s especially difficult to get banks to understand the significance of social media and the relevance of different social media platforms. 95% of the banks under evaluation have launched Facebook and Twitter presences but only 45% of them have an Instagram official photo stream.

Visual social media has become crucial in developing a good social media strategy. Unlike their more text-based siblings Facebook and Twitter, these channels give access to individual images and images are known to appeal to emotions and tell a story that is easier for consumers to connect with than informational texts. It is this emotional connection that distinguishes a brand, a service, a product, or a company from its competitors. Citi or Crédit Agricole are good examples of banking players that have well-structured Instagram presences with strong corporate images and entertaining posts.

As for those who have not yet joined the bandwagon: photo-stream us! Make us stare, meditate, laugh, frown, and get interested in your brand!


The biggest security risks for mobile banking

Friday, January 31st, 2014

When in December 2012 an estimated 36 million Euros were stolen from of over 30,000 mobile banking app users in Europe, the expected public outcry failed to appear. Although Trojans and other malware have been repeatedly used to hijack user accounts (migrating from PCs and laptops to new devices) those incidents still don’t spark too many concerns for mobile security. As the volume and value of payments flowing through the mobile channel are on the rise, it is likely that hackers will target mobile channels in rapid succession, exploiting users’ outright dependency on handheld devices.


There’s no question that the innovation, product and services development, that is taking place, provides consumers with greater convenience and flexibility. We are used to connecting with friends on Facebook, entertaining ourselves with a quick game and carrying out our everyday banking tasks, using sensitive access data while on the go.

Ensuring that the consumer is appropriately protected in this changing environment is a challenging task for financial institutions and mobile operators. Accompanied by the rapid mobile development, new ways of fraud, breaching security, and other acts of piracy are opening up. The following list illustrates the most common risks today:


Mobility and Convenience

One of the reasons that mobile banking is so popular, is that it can be done ‘on the go’. The immediate access to all our bank information and services meets our need for convenience. This need results in the saving of passwords and user names, which undermines their effectiveness, or even the omission of additional tokens for processing payments. Entering another token might slow the user down, but it adds another layer of security. Losing a device with so little security entails great dangers.


Phishing scams aim to lure users to reveal their private information such as user names, passwords or credit card credentials. By imitating text messages or emails from the bank that contain links to spoofed websites or a request for account information, the user is betrayed into giving sensitive data directly to the thief.

Wi-Fi networks

Public connections are generally not very secure - most places that offer a public Wi-Fi hotspot warn users not to share sensitive information over the network. Many users might be tempted to check their balance while frequenting the coffee shop around the corner.

Several way authorization

While the classic online banking uses an interplay of various channels (e.g. computer and mobile phone, computer and paper-tokens - transaction authentication numbers, computer and token-generator), for mobile banking this is not the case. With a smartphone this protective duality disappears: both credentials (card number/user name and the token) are available on the phone. It is obvious that a stolen phone therefore offers more sensitive data, which can cause a financial loss.


The mobile channel offers a whole new wealth of possibilities for hackers. Trojans that record entire voice conversations, sending them back to command and control the phone, keylogger programs that record every single keystroke the user makes - those are just two examples of malware attacks that are on the rise.


It is therefore the new imperative for financial service providers and banks to shed their widespread ‘wait and see’ attitude and start implementing a comprehensive strategy that includes cross-channel monitoring, development of clear policies and monitoring of the market places where their apps have achieved mass penetration. The solution lies in being responsive to the rapid changes taking place in the mobile landscape - allowing defenses to respond in real time by using big data algorithms. However, the most important and most neglected part of any security strategy must be the education of the client. 99% of all security breaches in online banking are (ultimately) causes by human error and carelessness. So, it was shocking for us when we found in our mobile app benchmarking analyses - over and over again - a lack of security information and anti-fraud education within mobile apps, app store descriptions or on mobile portals which function to make apps more popular. The change of this shortcoming is job number one.


How we evaluate apps, websites and social media

Thursday, April 18th, 2013

Yesterday one of our clients asked me in a meeting how we make sure that our evaluations are really objective and independent. I think that’s a fair and very important question so I am answering it today via our blog.

First of all, we are not being paid to write a report. We write reports and do benchmarking analysis on topics and companies we chose to. Only when the research is done and final, we start to sell the product.

Secondly, we are using a very structured and elaborate research process. We start by doing interviews with end-users trying to find out what really drives their preferences and usage behavior of an app or a website. Based on this qualitative research we construct use cases. Where do people use an app? Why? What motivates them? What do they like about an application or a website, what do they hate? The next step is to develop a catalogue of very detailed benchmarking criteria based on these typical use cases. Once we have our benchmarking criteria we test them and refine them until they are absolutely bullet-proof and work across all the different global markets. Then our analysts start analyzing apps, websites or social media presences. We always compare the global leaders with each other because we are convinced that the leading financial firms are the benchmark of the industry worldwide. This process is repeated twice within 4 weeks by two, sometimes three independent analysts to make sure that our standards are applied objectively. The final result is our detailed, comprehensive and completely data-driven benchmarking analysis.

Thirdly, we make sure that our analysts are objective and neutral. They are not paid based on sales or revenues they are generating with certain clients. They are paid for their analytical skills and only for their analytical skills. This ensure their complete neutrality in the process.

Last but not least, we are doing no consulting work in order to avoid that our company gets attached to strongly to one client’s revenue stream. We are living from the sales of our reports and some limited advisory work we do. But there are no extended consulting projects at all.

These four points ensure that the results you see in our research are based only on an objective and scientific analytical process and not any other considerations. This is what earns us the trust of our clients.


Barrons: MyPrivateBanking Takes Extremely Sensible Position

Wednesday, May 25th, 2011

We have been very honored that Barrons - probably the most prestigious investor magazine worldwide - has mentioned and approved of our research about discretionary accounts:

“SPEAKING OF MADOFF’S TREACHERY and the demand for transparency, new research findings by MyPrivateBanking Research show that only 10% of the world’s top wealth managers publish performance data for accounts that give the wealth manager or private bank the authority to buy and sell securities at their discretion.

Even more unbelievable is that just 22% offer specific information about their fees. And just 8% offer at least a three-year track record on the performance of their discretionary accounts.

MyPrivateBanking, an online independent advisor to wealth-management investors, says its results are based on an analysis of public Websites, including all reporting documents that the 40 largest wealth managers worldwide put online. MyPrivateBanking takes the extremely sensible position that discretionary accounts are like mutual funds and should open their books in a similar manner. And investors who can’t get this information (and keep in mind, some favored-few heavy hitters probably do) ought to get out, and get out now.”


Sneak Preview: Our New Private Banking Website Ranking

Monday, March 28th, 2011

Next week will see the publication of our new Private Banking Website Ranking. This is already the second (revised! enlarged!) version of our report “How Wealth Managers Can Win Clients Online”. Here is the link to the (old) first edition. For the new edition we have ranked and rated 40 banks and wealth managers on more than 50 criteria related to their online presence. And we can tell you already: We will see a new winner. And the top-3 banks come from three different countries on two continents. If you wish to receive the press release please send us a quick note via our contact form.


Happy Holidays to All Our Readers

Thursday, December 23rd, 2010

2010 is slowly reaching its final days. It has been a good year for many investors despite ups and downs and many unsettling questions especially about the banking industry.

It is our mission at MyPrivateBanking to analyse and watch the Private Banking industry and to provide clients as well as industry participants with unique data, insights and comment. We hope that we have achieved this over the course of 2010.

We are looking forward to 2011 that will bring a number of new features and innovations to this website as we strive to make our research and reporting as well as the MyPrivateBanking social network even better. Stay tuned…

And here, a final link for 2010, a great summary of all investing fads and themes from 1996 to the present by Joshua Brown who has also in 2010 appeared on MyPrivateBanking in an interview.


Video-Interview on our Social Media Report

Friday, November 19th, 2010

In an interview with the leading Swiss paper NZZ our Research Director Steffen Binder presents (in German) the results of the latest MyPrivateBanking report “Wealth Management and Social Media.

Click here the see the full interview.



A New Generation of Wealth Management Clients?

Wednesday, May 19th, 2010

We have just released our new German client wealth management monitor and the most important finding is that Germans are a bit shaky with regard to their customer loyalty. 43% of the 300 surveyed wealthy clients are considering to switch their bank within the next six months. (3% say they have already made their mind up to switch and 40% say they think about switching). The interesting part is that the younger customers (under 35) and the wealthier ones (investable assets of more than 500,000 €) express an even higher likelihood to switch (>50%).

Only a minority of these clients will in reality change their bank and find a new provider. But it is still a small revolution in a country where, in the past, you would rather divorce your spouse than change your bank. For the wealth managers this new situation brings threats but also opportunities for new market entrants and banks with a strong marketing strategy. Overall, we feel that more competition should be good for the  client as quality and transparency increase. After all, consumers spend a lot of time to make decisions about a new car or a new mobile phone contract - why shouldn’t they spend more time and effort to think about their wealth management, a decision that is far more important?


Bloomberg on MyPrivateBanking

Thursday, March 25th, 2010

“Ninety percent of wealth-management clients are not aware of the costs they pay indirectly,” said Binder, 43, who in 2008 co-founded, a Kreuzlingen, Switzerland- based firm that provides research and analysis on the private- banking industry. “If they invest in relatively expensive alternative products it can be a huge amount.”

That’s from an exclusive story Bloomberg published yesterday on MyPrivateBanking and the wealth management industry in general.


Why Pictet Is Wrong

Friday, October 9th, 2009

Yesterday we have released our latest report on the performance of equity funds associated with the biggest wealth managers and private banks. The bottom line was that about 80% of the funds missed their benchmark and 20% overperformed (we looked at the core funds, actively managed, for Europe, Asia, USA and Global). Now, this is hardly a new and surprising result - a lot of research has come up with similar data. Yet, it seems that a part of the private banking industry is not ready yet to look in the mirror and analyze hard facts and data. One journalist remarked to us, half jokingly during an interview, that we probably “are not gonna make lots of friends in the wealth management industry” with the study. True enough, one day later the boss of Pictet asset management, Stephen Barber, slammed the report as “totally meaningless” because of too narrow a sample of funds. (Pictet ranked number 10 out of 13 ranked asset managers.)

We  respond to Mr. Barber that if a wealth manager choses to offer broad based funds for European, Asian, US and Global equities, an investor must expect that the performance of those funds is a valid measure stick for the equity investment competence of this asset manager. To put it very bluntly: A broad based fund firm must be able to manage equities of the four global core regions well.

True, there might be many other funds offered by a fund manager. Yet many of them have only a short track record (because those poor performing funds get closed down or merged all the time and new ones started). Others have interesting investing themes like the “Pictet Agriculture Fund”. But how is this fund comparable to other funds and what would be a fair benchmark?

We don’t think that private banks are generally doing a bad investment job. But we think that there is room for improvement, especially as far as in-house products are concerned. Looking at the facts is a first necessary step. Research bashing is not.