MyPrivateBanking Blog
Daily Comments on the World of Wealth Management

What does it take to be a Leader in digital wealth management?

The need for replacing legacy systems with more agile, and often cloud-based, platforms is clear, and most of the world’s top wealth managers are currently in the process of restructuring and transforming their existing business models to a digital first, agile, and innovative plan. However, some of these top wealth managers are more successful than others, and this brand new MyPrivateBanking report showcases these “top of the top” leaders.

2018 yields clear improvements but weaknesses remain

After a full review of the mobile app strategies, websites for wealth management, and social media channels for wealth and private banking divisions, we have been able to rank the top ten leaders for digital channels. A subsequent evaluation showed that within this top ten ranking there are clear differences in how these leading wealth managers approach their digital transformations and how successful these transformations have been. Importantly, this year’s report reveals a clear weakness in the long-term planning of even the cream of the digital wealth management crop. In particular, there is a clear failure to foster digital leadership from the bottom up-something that will, in the years to come, cripple the success of a long-term digital strategy. Interestingly, this lack of bottom up leadership and a failure to secure the talent pipeline is partially mitigated by clear improvements in top down digital leadership between the 2018 report and the 2016 report.

Digital winners are solidly on board with fostering top-down leadership

In 2016 we were surprised to find a lack of top-down digital leadership in the world’s best digital wealth management firms. Only 55% of these organizations had a dedicated C-level position for digital wealth management or similar. In this year’s report, then, we were pleased to see that this clear weakness has been rapidly overcome-over 80% of 2018’s digital winners now have dedicated digital positions at the very top of the hierarchy. This shows recognition of the need for top-down guidance of digital transformations and the importance of having an ally at the top of the hierarchy for fostering innovation. This increase is one of the strongest positive findings of this year’s evaluation.

Bottom up leadership is, however, still very weak

While the finding for top down leadership is a very positive step in the right direction, this has not yet been balanced with an equally strong emphasis on bottom-up leadership. Top down leadership, and having a C-level digital ally, is undoubtedly a key factor in short term success-especially when it comes to fostering innovation, pushing through reforms, breaking down silos, and similar. However, we caution that bottom up digital leadership is equally important for long term digital success and is, critically, only present in around 55% of this year’s winning organizations.

Securing the talent and leadership pipeline is key for long term success

Long-term thinking means also developing a strategy to maintain the talent pipeline within the bank and a smooth entrance ramp for talented external hires. At the same time, established banks have to make sure that talent stays in the company rather than being lured away by better offers from FinTechs or competitors. Only half of the top ten digital leaders have a clear and comprehensive strategy in place for securing their innovation and leadership pipeline-meaning that many of these leaders risk losing traction when it comes to long-term digital leadership.

Securing the talent pipeline is about more than just hiring practices. This can be both a top-down and a bottom-up process and, realistically, it should be both. This is a strategy that ensures that new employees are provided opportunities to become innovation leaders by providing internal training and mentoring. It also means ensuring that leadership is fully on board with promoting and fostering a culture of innovation and digital focus within the firm.

Our latest report goes into greater detail about the ways in which wealth managers and private banks can successfully secure this talent and leadership pipeline in order to set up their organizations for long term digital success. We cover key aspects of a successful long term digital strategy, discuss the differences between finding a good talent pool and supporting internal development of promising leaders from day one. We also provide examples and case studies of organizations who have been successful in this area in order to derive learning points from them.

Tags: , , , ,

Subscribe