MyPrivateBanking Blog
Daily Comments on the World of Wealth Management

Archive for June, 2014

How my childhood Lego skills helped me building an app in only a few hours

Friday, June 27th, 2014

This week I had the chance to attend a workshop led by MicroStrategy, the Business Intelligence company, to learn how to build an app in no longer than a few hours. To be honest, this sounded a little bit upbeat to me: evaluating app features is one thing, but developing them myself in only a few hours?

After a short introduction into the company’s worldwide operations, products and services the attendees were handed out a kind of script, which should lead us through the different steps for becoming a true app developer. Still skeptic, I started with the first task. Following the instructions, I created an app homepage on the personal computer, which immediately showed up on my tablet.

Excited from this success, I continued with clicking, dragging and dropping, typing and sizing. It reminded me a lot on my decades old experience with building a house, a farm or a car with my Lego kit. In the end I was entirely puzzled by this genius piece of digital work I was responsible for: a retail shop app containing a comprehensive product list, filter options, a barcode scanner, an interactive map with all of ‘my’ stores and the respective sales figures, multimedia documentary as well as a calendar containing all of my meetings and cool features like the app showing up different content when changing the orientation of the device.

At the end of the day I came to the conclusion that it’s not only possible to develop a mobile app without coding skills, but that it’s easy, fast and even fun – through the right platform, of course. This is why software vendors that offer such a modular approach are gaining substantial ground. Another example that is pushing a similar approach is banking software vendor Avaloq who is also increasingly relying on a building kit approach. This market is still in its infancy and it will be well worth keeping an eye on it in the coming months. It also shows why apps are such a fast and customized weapon in the fight for new clients and market share. Within only days you can change your offer, adjust it to new customer needs or respond to your competitor’s last move.

 

Why Artificial Intelligence will become BIG in wealth management

Friday, June 13th, 2014

We’ve just recently heard the news that a computer software has finally passed the Turing Test. There is some debate if this actually happened or whether it was really successful. Basically, the mathematician Turing put forward the idea of an ‘imitation game’, in which a human being and a computer would be interrogated under conditions where the interrogator would not know which was which, the communication being entirely by textual messages. Turing argued that if the interrogator could not distinguish them by questioning, then it would be unreasonable not to call the computer intelligent, because we judge other people’s intelligence from external observation in just this way.

We have now little doubt that software development is at a point, where computers will be in a position to support or take over complex decision making from human beings. We are talking here not only about clearly structured tasks and decisions like in a chess game (computers have been beating the best human chess players for years) but complex decisions involving many factors including emotions, human relations and spoken language etc.

Looking at giving advice and decision making in wealth management, it seems to me very obvious that in this field, the role of AI will become BIG in the next five years. We are already seeing a wave of so called robo advisors encroaching on the territory of established wealth management firms and private banks. So far, they are using relatively simple algorithms to determine their clients’ risk propensity, preferences or asset allocation (and are rightly critisized for their simplistic approach). But it won’t be long and much more powerful software will take a much more holistic approach to the clients’ situation and the results will most likely beat the knowledge and skills of human advisors in several dimensions.

Wealth managers should start thinking about AI and how to integrate it in their business modell. In September we will publish a new report on automated computer-driven wealth advice (robo advisors). The topic of AI will take a prominent place there.

 

Mobile websites as game changers

Friday, June 13th, 2014

Starting with this year’s benchmarking project on wealth management websites (due in September 2014), we decided to focus much more on private banks’ mobile websites to contribute to the fact that mobile websites have become an important factor in the digital battle for clients’ and users’ eyeballs. But successful mobile websites have – in many respects – very different requirements from their desktop siblings.

What do we expect from a good mobile website?

  • Clearly structured entry page: the entry page should contain prominently placed call-to-actions, a short menu containing only core content, as well as the possibility to login for financial transactions and account overview.
  • A search function on the entry page: mobile websites should allow for easy content search on the homepage of the mobile website in order to allow for fast information lookup. Optimally, smart search features like autofill or search filters are provided.
  • Balance between relevant content and easy navigation: content should be optimized for small screen sizes while, at the same time, informing comprehensively of the wealth manager’s products and services.
  • The choice between mobile and full view: customers should be able to choose the view they prefer since some would like to view the full website for getting more and detailed information whereas others prefer an easy navigation while on the go.
  • Flexible content consumption: busy clients should have the chance to send interesting articles via e-mail in case they wish to read it later.

This is by no means a comprehensive list. Stay tuned for our full report after the summer break.

 

Five reasons why you should not give your retail banking app to wealthy clients

Thursday, June 5th, 2014

Many mobile apps that offer a good provision of core functions for wealthy clients have not managed to stay ahead of the competition. Why so? The analysts at MyPrivateBanking Research disclose the captivating story of what makes a mobile app for HNWIs successful in the forthcoming report ‘‘Mobile Apps for Wealth Management 2014’’. One of the striking results of our research so far has been that only 24% of banks offer an exclusive banking app – for their wealthy clients only. All other banks offer a general banking app to all of their customers – retail, high-net-worth or in between.

Even though the existing retail apps may also be relevant for HNW clients, there are good reasons to offer a customized solution:

  • HNW clients love to be treated exclusively and separately from the crowd. That’s the reason why they are paying substantial fees to their private banker or wealth manager in the first place.
  • HNW clients have other client needs in the mobile world. Often, they are heavy travelers, need to communicate a lot more with their banker and have deeper and more demanding information needs.
  • HNW clients are interested in different products than retail clients. A banner ad for a cheap consumer credit or a good car insurance rate might not really capture their imagination.
  • Investing, research and market developments are key areas of action for HNW clients. Checking and analyzing their portfolios in real-time anywhere in the world, executing a trade or checking quotes are important mobile activities for HNW clients.
  • HNW clients are longing for an app that matches their advisor’s app. Meeting with their advisor will be more and more app supported. Both parties to the meeting should be able to communicate on the same level using matching apps.

And no matter how sophisticated the financial operations they need to support, an app developed for wealthy customers should first of all engage them by means of elegant design, user-friendliness and easy-to-digest content.

 
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