MyPrivateBanking Blog
Daily Comments on the World of Wealth Management

Archive for June, 2015

How the Apple Watch changes the game for banking apps

Monday, June 29th, 2015

Evaluating the apps of the 30 leading wealth managers for our Mobile Apps for Wealth Management 2015 report (launched two weeks before), we were impressed by the rapid adoption of the smartwatch trend evolving to a major part from the launch of the Apple Watch. During the evaluation phase, several wealth managers were throwing their version of a wealth management smartwatch app into the market.

Given the usually slow progress of the wealth management industry in terms of digitization, this development is particularly noteworthy and it implies that the boom of smartwatch app has only just begun. Therefore, we also expect a dramatic increase of the number of banking apps in the retail sector. Starting our new project on the Mobile Apps for Banking 2015 report (see last year’s edition here), we are curious to see how banks are realizing their version of their banking app’s smartwatch counterpart. It is clear that the smartwatch banking apps’ core functions will mainly include features like notifications and communication. Especially in terms of communication, banks will face major challenges as this article describes.

We will be excited to shed a light on the developments and the industry best practices with regard to smartwatch apps for banking for the first time – so watch out for our 2015 report on Mobile Apps for Banking coming out this fall!

 

Why wealth managers need to communicate about app security

Wednesday, June 17th, 2015

Given the recent waves of massive security breaches and the increasing data manipulation, high-net-worth clients are justified in being anxious about their personal data being stolen and used by hackers and fraudsters.

Banks and wealth managers continue to ignore the fact that their clientele and prospective clients do not want to lose control over their information. As our new report on Mobile Apps for Wealth Management 2015 shows, out of the evaluated mobile core apps of 30 leading wealth managers worldwide, only 40% use the app store to inform clients about security.

Security measures of most mobile banking apps are not clearly communicated in the available app stores. An accurate description of banking or trading apps should certainly make it clear how users’ personal data is being used and protected in the app.

Initiatives that already give users the right and ability to learn what security measures banks integrate in their apps are successful in inspiring a feeling of transparency and trustfulness. Keeping the language easy to read and reflected in a clear and concise style is key to inform about the app’s necessary high security and encryption standards.

Wealth managers need to understand that their wealthy clients expect to be informed about an app’s security means before downloading it.

 

Who will win the robo game?

Tuesday, June 9th, 2015

Steffen Binder, MyPrivateBanking’s Research director will be speaking next week at the InVest2015 conference in New York:

Session Description

Online advisory firms like Betterment, WealthFront and others hold a tiny fraction of total AUM, but there’s no doubt that they pose a threat to traditional wealth managers with some customer segments. MyPrivateBanking research has quantified the threat potential of 14 leading robo-advisors companies worldwide, according to 13 criteria. This session will examine which represent the highest disruptive threat to the wealth management industry, particularly their ability to win new clients, their marketing prowess and their deep pockets funding-wise. The analysis will also show the competitive reaction of existing wealth managers and how this will reinvent the whole wealth management industry.

200 USD discount with code “ROBOGAME”

And here you can find our latest research on robo-advisors.

 

The self-driving car is here - but what about self-driving wealth management?

Wednesday, June 3rd, 2015

Today I read that Audi will offer the new version of its A8 flagship model in 2016 with „piloted driving features”. Essentially the car will drive itself under certain circumstances, namely in traffic congestions on the highway. Google Cars have driven more than 1 million kilometers on public roads so far (with only a few minor accidents). It will be only a matter of time until auto-piloted cars will be available on the roads for everyday use. The industry is heavily pushing for a change of traffic laws and it seems that legislators will open up the roads in the near future. The benefits of self-driving cars are clear: fewer accidents, freeing up the driver to attend to other things while riding with her car and overall much smoother traffic and fewer traffic jams due to intelligent routing.

It appears to me that the wealth management industry is today at a similar junction and could push for the auto-piloted investor. But the industry leaders are more skeptical and not quite open to change - just the opposite of the car industry. The products are here - just think ETFs and passive, index-based investing. The technology has been developed: robo-advisors stand ready to help consumers get their investments right. The benefits are clear: Computers are much better investors than human beings.  Passive investing beats active investing in more than 80% of the cases. Algorithms have a much better appreciation of risk and return in financial markets than most private investors (and - I have to add - many professional wealth advisors, too).

But yet we see little enthusiasm in the global banking industry for automated, self-driving investments. The overwhelming majority of global banks leaves it to start-ups like WealthFront or Betterment to bring automated investing to the masses. A notable exception is the brokerage firm Schwab with its Intelligent Portfolio offer and a few online brokers.

It may be the case that banks and wealth managers are fearing that robo-advisors will put pressure on the fees for advisory services. But it should be clear to every industry participant that just as sure as self-driving cars will soon become a mass market, automated investing will be a success story in the financial industry. Why leave it to the start-ups and technology companies?

 
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