MyPrivateBanking Blog
Daily Comments on the World of Wealth Management

Archive for December, 2014

Top-10 Tech Trends in Wealth Management for 2015

Tuesday, December 23rd, 2014

2014 - what a year! Digitization has only started to disrupt the financial industry through innovations like robo-advisors. Mobile apps for various financial areas have really taken off in 2014: wealth management, financial advisors, and fund management, are catching up fast on the mobile battle field. And social media is quickly becoming the most important customer support channel for banks.

But digital change in the wealth management industry is not slowing down. Here are our top-10 trends for 2015:

10.) Personalized marketing based on big data: Social content mining tools deliver a clear client profile, making it easy and convenient to address wealthy clients’ dedicated needs.

9.) Margins under pressure: Wealth managers must be prepared for an increasing pressure on their margins due to the emergence of automated investment/advisory services and the emergence of commission free brokerage.

8.) Messaging becomes ever more important: Particularly the high-net-worth clients expect to be able to reach their advisors anytime and everywhere they are. Instant messaging services, video chat, social media, and co-browsing are gaining momentum.

7.) Advisors become client communication managers: Thanks to client portals and social media dashboards, financial advisors are now able to manage and monitor their client communication through one single tool, thereby increasing efficiency and productivity.

6.) Security remains crucial: Comprehensive security and privacy protection stay on top of wealthy clients’ wish list with regard to banks’ and wealth managers’ digital offerings.

5.) Advisors become coaches: Through content collaboration tools, financial advisors are able to add value to their clients as real sources of expertise and deliver high quality educational material.

4.) Social finance as a new definition of charity: Banks are increasingly recognizing the benefits – social as well as financial – of social finance as opposed to donating to charities by highlighting the investment character of social finance projects.

3.) Social media become most important channel for customer support: Mainly Twitter and Facebook serve increasingly as a public interface to deliver support to clients – first in the mass affluent and retail segments but later also for the HNWI.

2.) Mobile touch-points will start to see, feel, and navigate for the client: As more and more sensors are added to mobile phones plus new devices are getting ready for apps like smart watches or glasses, mobile apps will use contextual data to deliver value to the client.

1.) Automated investment advice is becoming part of traditional wealth managers: Robo advisor start-ups have made a splash in 2014. But 2015 will be the year of established wealth management firms implementing automated investment advice as part of their own business model.

The whole MyPrivateBanking team wishes our clients and readers wonderful holidays and a happy, successful new year 2015!


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!


How Social Media can dramatically lower banks’ customer service cost

Thursday, December 11th, 2014

(by Francis Groves, Senior Analyst)

Social Media Charter, formed in August to help the UK’s financial services industry to use social media compliantly and effectively, is holding a Summit event at the House of Lords on the subject of using social media responsibly.

Interviewed on the BBC this morning, Kitty Parry, the Social Media Charter Chief Executive, highlighted the upside of social media for the banking industry, including the interesting statistic that customer service interactions provided via Twitter and Facebook costs banks (presumably UK ones) an average of 75 pence a time, compared with a cost of £4.75 for an equivalent interaction conducted over the phone. She went on to mention the empowering nature of social media for bank customers as a way of comparing customer service and products between banks.

In our recently published report on ‘Social Media for Banks and Wealth Managers: 2014′, MyPrivateBanking finds that the leading banks globally are indeed focusing heavily on customer service functions in their approach to social media. In our report we provide detailed coverage of the most effective customer service strategies that our analysts encountered and the lessons to be learned from them, as well as information on how much customer query/complaint traffic is now going to banks’ social media presences. However, we also found that very few banks are using social media effectively to showcase their products and services, even new offerings. Although fear of infringing regulations in relation to marketing and social media may be one inhibiting factor, we see a more general lack of social media vision and a pervasive defensiveness in relation to their reputations as the main drag on effective involvement with social media.


I am a millionaire, please txt me on WhatsApp

Wednesday, December 10th, 2014

Digital channels are gaining ground when it comes to communication between affluent/high-net-worth individuals and their financial advisors. A substantial minority of around 20% - 30% already communicates with their financial advisor via instant messaging providers, video chat, social media, and screen sharing. These data are from our latest 2014 Wealth Survey, covering China, the US, UK, Germany and France. Yet, the most striking insight is that the wealthiest group – high-net-worth-individuals with more than 1 million USD of investable assets – are the most tech-savvy when it comes to digital communication. Around 40% of this client segment state that they are using messengers and video chat predominantly when communicating with their financial advisor.

Implications for wealth management firms are disruptive: Advisors need to be ready to use new digital channels, and security and compliance issues need to be addressed. However, in the long-term there are even more profound consequences. If communication moves from analogue to digital, it becomes possible to use software for automating communication and answering inquiries. Robo-advisors are already automating portfolio allocation. It’s not unthinkable that they will also automate client communication in a not too distant future.

For more learnings and insights, get our 2014 Wealth Survey including 289 data slides.


S-Money, A New (French) Revolution in Payments

Tuesday, December 9th, 2014

(by Francis Groves, Senior Analyst)

In our most recent report on Social Media in Banking & Wealth Management, MyPrivateBanking highlighted the arrival of payment processes that use social media channels, specifically the introduction by BPCE and its S-Money subsidiary of a payment service for Twitter users. This service was launched in October and is initially focused on facilitating payments in a social context such as crowd-funding, friends clubbing together to buy a gift or charity fundraising. Go to the @SmoneyFR Twitter stream at the moment and you will find them promoting the AFM Telethon campaign to raise money for families affected by rare neuromuscular diseases (especially in children) - “@SmoneyFR #envoyer X€ @Telethon_France.”

The new service is reported to rely on standard security within the payment/credit card industry. Payments to another individual are limited to €250 and are not (yet) confidential. In the future payments by direct messaging may be available. Although some reports indicate that the service is a collaboration with Twitter, we understand that it is in fact an initiative of BPCE/S-Money on their own, using publicly available Twitter documentation.

But Twitter payments are only one part of the range of recent initiatives by S-Money. At the beginning of the year they signed up with the Visa subsidiary, which will allow customers to store their card details - securely - in a single place.

Then in February, ‘Dilizi’ a new system that turns merchants’ smartphones or tablets into card payment systems, was announced. This new system is particularly attractive to traders who work away from their own premises a lot, such as plumbers. It could also be used in raising money for good causes.

One particular segment of French society that has come into S-Money’s orbit this year is the country’s student population. In July, Crous, the state-owned provider of university services (such as canteen meals) chose S-Money as its e-payment manager. So, potentially, 1.6 million young people are likely to become familiar with S-Money.

At a time when there has been talk of payment processing slipping out of the hands of traditional banks, it is interesting to see that BPCE seems to have the expertise, the financial resources and corporate courage to put the understanding that it has of its home market to work to buck that trend.


Why falling stocks might make your ears ring

Thursday, December 4th, 2014

The question is not if there will be wearable banking but rather when it will arrive in the mass market. While wearable activity trackers already observe every step of an increasing number of people, the use of wearable mobile devices (other than smart phones or tablets) for financial matters is still in its early stages. But there are a few financial services apps already out there for Google Glass and smart watches. Just check here, here and here. These are the early movers but there is no doubt that others will follow soon.

It’s not clear yet which apps and which devices will ultimately be successful: It could be devices like Google Glass, smart watches, or even bracelets for taking the role of contactless payment tools. Even more far-fetched ideas might ultimately come to the market. Why not a partnership between a big fashion house and a stock broker. Earrings, which discretely start to vibrate when stocks fall below a certain level certainly could find their buyers. Therefore, continuous research among its client base, rapid prototyping and closely watching its competition should be on every bank’s critical path to their next breakthrough mobile app.