MyPrivateBanking Blog
Daily Comments on the World of Wealth Management

Mobile apps for wealth management: Will innovation beat complacency?

It has been 10 years since the Apple released its first smartphone, a technology that has become a part of everyday life and facilitated the growth of apps. Since then, consumers have been exposed to innovative and well-designed  apps - as well as online security breaches and fraud. Their experience with apps in their daily life has made them savvier when it comes to what they expect from their private banking and wealth management apps.

While other digital industries have taken agility - the ability to evolve and adapt their digital products to customers’ need quickly - to heart and in practice,  private banks and wealth management firms are still struggling with this important concept. This is especially clear from their digital offerings, particularly in their mobile apps for U/HNW clients.

Based on our new benchmarking report, Mobile Apps for Wealth Management,  75% of the 34 companies we profiled that provide apps for wealthy clients lack innovative features that are helpful to their clients’ financial lives. Many wealth managers consistently underperform in the provision of advanced portfolio features, interactive portfolio tools, top-notch security, and contact features to their wealth clients.

This is alarming because in an age where technology is moving fast - dragging  clients’ expectations with it -  not having an app strategy is the biggest competitive disadvantage facing wealth managers and private banks. Private banks and wealth management firms with weak apps risks irrelevance and losing their clients to other banks or FinTech startups that offer more user-friendly and innovative features as well as value-added services.

One area where private banks and wealth managers have to step up is security.  This is a concern because wealthy clients will not tolerate data breaches and unauthorized use of their data. Banks must employ top-notch security and anti-fraud measures in their apps and constantly evaluate it in order to keep up with malwares and other attacks.  One private bank client who spoke with MPB expressed incredulity at the lack of two-factor authentication in his/her app, which is already standard for credit card companies and retail banks. “I work with are far better and more trustworthy than the ones from my wealth manager, who is handling my entire net worth. They have to change this if they want to keep me as a client,” the client said.

Another area for improvement is the core app features for wealth management. While there has been a slight rise in this category since 2016, the apps that we evaluate this year lack around 40% of the core features we expect to find in wealth management apps.  As technology improves, some advanced portfolio tools such as virtual portfolios and automated, risk re-assessment tools have become standard and average features. Wealth managers who are slow in applying emerging technologies to core features risk an ineffective and boring app and, consequently, losing their clients.

Despite these shortcomings, we do see some  signs that a select few private banks and wealth managers are innovating to anticipate clients’ needs-and running away from the competition in this regard. We find some banks that integrate gamification and virtual reality in their apps, for instance. Content for marketing and client retention by way of thought leadership, market news and insights, also improved from 2016 to 2017.

Overall, we urge wealth managers to develop agile mobile strategies and integrate new technology quickly in their mobile offerings to U/HNW clients.  As agile development is also based on  feedback, banks and wealth managers should also be proactive in getting their clients’ feedback early in the development process and collaborate with other stakeholders to improve their mobile services for the wealthy.

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