MyPrivateBanking Blog
Daily Comments on the World of Wealth Management

(By Francis Groves, Senior Analyst)

There was a strong consensus at yesterday’s Robo Investing conference that the future of automated investing is NOT standalone D2C robo-advisors. Breaking even as a go-it-alone robo is simply too much of a challenge for many to succeed; to be successful the robo approach needs to build on the advantage of established brands, though these are by no means certain to be just existing financial brands. Andrew Power of Deloittes made the point that a robo with average portfolios of £35K and charging 75 basis points would need AuM of £3 billion to break even.

What came across most strongly was the wealth of insights into what is need for automated interfaces to play their part in engaging new clients. Speakers made the point that the public need more education about their own need to make financial provision for themselves and the importance of switching from saving to investing if they are going to make their money work for them. However, as Rob Hudson of Aberdeen Asset Management said, institutions shouldn’t make education a main focus but, instead, should use ‘the power of easy’ and concentrate on putting financial products in front of customers.

Richard Theo of Wealthify suggested that simplicity (of design) could move mountains and that design really needed to concentrate on mobile delivery, gamification and the use of ‘nudge’ techniques. Anna Lane of the Wisdom Council also voiced concerns about simplicity and strongly recommended institutions leave out jargon and give absolute costs as well as percentages and basis points. The key learning points are to recognize that financial service users prefer automation to human interaction where it delivers what’s needed and that advisors need automation to improve efficiency and raise client:advisor ratios. Engagement is more than a good user interface and requires the creation of trust by means of the kind of preference and behavior analysis and anticipation of client needs that AI/machine learning can provide.

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One of the biggest trends in digital banking and wealth management in 2017 is personalization. As described in this article (source: Bank Innovation), consumers become increasingly accustomed to personalized digital services thanks to innovation-driving companies such as Netflix or Amazon. The core of this new level of service is to know your customers and to meet their individual needs.

Therefore, we highlight this area in detail in our new report on behind the log-in spaces of wealth management apps and secured online portals. Indeed, we found several good examples how wealth managers make use of the data resulting from their clients’ online and mobile usage to improve user experience, client satisfaction and security.

However, monitoring user behavior to detect suspicious actions is only where the journey starts – soon clients will expect no less than getting a truly contextual feeling when accessing their wealth management app. While the article mentioned above states that clients should have the opportunity to set off certain features they do not want to use, we think that online and mobile tools will be required do this automatically. Digital users will create their own digital finance tools not by changing the settings but by simply using them.

Our report sheds light on various areas of digital tools that benefit substantially from technologies like predictive analytics besides presenting the industry’s state-of-the-art client-only solutions and giving valuable recommendations for creating a winning user experience.

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Robo advisors launched by start-up companies were long perceived as a substantial threat to established players in the financial industry. But now established players are taking over the game. We are witnessing the launch of so-called hybrid-robo advisors by established players like Schwab and Morgan Stanley who have realized that embracing the technology and combining it with already existing assets like client base and experienced advisors will enable them to beat “pure” robo advisors in terms of the client experience.

In our opinion, those players who truly integrate technology in order to deliver better service will be the ones that stand out in the long run. Simply promising a human touch point in order to justify higher fees without a well thought out system in place to actually deliver this kind of service wont be enough.

Check out our new research on this topic.

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Artificial Intelligence (AI) and chatbots are a very big topic at the moment. Yet, there are a lot of uncertainties related to the emergence of this new mega-trend. Chatbots are software-based agents that can lead an intelligent conversation with users, sometimes based on AI, sometimes based on pre-defined responses. So basically you are chatting with a robot. This trend has already arrived in the financial services industry with FinTechs, Challenger Banks and also established players starting to jump on the bot wagon. These are very interesting times as bots are going to revolutionize the way companies will interact with their clients and we are now seeing the first real examples of bots being launched in the financial services industry. We can definintely say, that the bot trend is something that noone can ignore!

In our new report Chatbots for Banking and Wealth Management: Why financial institutions should emply virtual assistants we investigate the ways chatbots are already used in banking and wealth management and explore how they will revolutionize the future client interaction. For our assessments and recommendations, we screened more than 100 established banks and wealth managers to identify and analyzes the 35 most advanced and innovative chatbots and virtual assistants. In addition the report evaluates state-of-the-art chatbots by 9 FinTechs and challenger banks and as well the offerings of 8 bot developers.The report provides data driven answers to following key questions a financial institutions should ask when using bots of client interaction:

  • What does the current landscape for chatbots in financial services look like and what drives the developments?
  • Which are the most advanced chatbots in the financial services sector, how do they look and what do they offer?
  • How will bots change and enhance the client interaction and communication?
  • How to choose the right bot, platforms and implementation?
  • What do the vendors offer?


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The pioneer years of robo-advisors have come to the end and the market will separate the wheat from the chaff. Too many automated investment services target the same, growing - but still not sufficient - client segment to nurture all or most of them. Too few of the automated investment services see their platform through the eyes of a first time user, while many are losing sight of the need for sustaining a customer experience that will - ideally - last for years.

In our new report on the leading robe-advisors worldwide, MyPrivateBanking makes a series of recommendations on the basis of our benchmarking evaluation, among them:

Aiming for transparency is the best policy, especially when presenting the robo-advisor’s pricing and product and process information.

Automated investment platforms need to be subjected to rigorous user experience testing. Looking good is not enough - equally, content must be in-depth.

Robo-advisors risk side-lining themselves if they don’t recognize that clients need financial plans as well as investment portfolios. At least a basic financial planning offer should be considered for inclusion as part of the robo value proposition.

We foresee the need for leading institutions to be more radical and wholehearted in their automated investment initiatives in the next few years, even if this means starting over again with a second robo-advisor to replace their first.

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MyPrivateBanking Research has taken a comprehensive look at the performance of the overall leaders in digital wealth management across mobile, website and social media channels.   Our assessment in this report is both highly granular, based on the underlying benchmarks by channel, but also it considers the holistic aspects of how firms have put in place strategies for digital transformation, to offer a unique perspective. The results show that only 5 of the Top 25 global wealth managers by AUM make it into our shortlist of eleven digital leaders, and just over half feature in the ranking of Top 20 cross-channel performers. This is a disappointing performance for two reasons, one is that as a sector financial services is a forerunner of digitization (especially in terms of electronic payments), and then there is the fact the 25 largest global wealth managers are responsible for over $15 trillion USD of client assets, circa 80% of the industry. That is a large proportion of clients for whom their wealth management relationship is under-digitized and the pace of change is too slow.

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In our latest study on “Fund Managers’ Digital Presences for Institutionals and Advisors” we have looked into the digital presences of fund and asset managers targeting institutional clients. We reviewed the websites, mobile strategies and social media efforts of the world’s biggest fund and asset managers from the perspective of “institutional investor” and “financial intermediary.” Read the rest of this entry »

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Today, the city of Düsseldorf in Germany has blocked a major bridge for cars as this bridge has become a big “Pokestop” and hundreds of Pokemon-gamers have occupied the bridge to hunt Pokemons. The game was released on July 6, 2016 - just three weeks ago and was downloaded more than 30 million times (status of last week). There are more than 20 million active, daily players, it is claimed. Pokemon Go is probably the most successful game that has ever been released.

Pokemon Go is an app-based mobile game that uses augmented reality. Players hunt Pokemons of various types, train them, exchange them and have them fight against each other. The fascination of the game is to a large degree caused by the blending of virtual elements (the Pokemons) with the real surroundings of the gamer. This is what we call “augmented reality”. It is a concept that is now available to the regular smartphone owner as modern smartphones contain HD cameras, gyroscopes, GPS and various other elements.

And augmented reality is exactly one of the critical elements that will be integrated in the digital customer journey in wealth management as well. Only a few years from now it will be unimaginable NOT to use augmented reality when communicating and transacting with your wealthy clients: virtual meetings, portfolio simulations, performance reporting, educational seminars, virtual events will all contain elements of gamification and augmented reality. Together with other important trends like speech recognition or the use of artificial intelligence for investment decisions, augmented reality is one of the critical features on the way to complete digitization of the customer relationship. While the number of personal interactions in an offline-environment will shrink considerably, it will be important for every private bank to make the customer experience in the digital sphere as unique as it used to be in the “old” offline world. If you haven’t, download Pokemon Go today and get a glimpse of wealth management’s digital future. You should also read our briefing on gamification in wealth management.

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In the following interview Oren Kaplan, the CEO of SharingAlpha, explains what the new firm is all about and why it is important to the wealth management industry.

MyPrivateBanking: Oren, can you explain the idea behind “SharingAlpha” in a few words?

Oren Kaplan: SharingAlpha is a user generated fund rating platform, or in other words, it’s where Morningstar meets TripAdvisor! SharingAlpha will also rank the fund raters in terms of their fund selection capabilities which will allow fund selectors and investment advisors to build their own proven track record. The users will also be able to construct a number of virtual fund of funds and SharingAlpha will rank them according to their asset allocation performance.

MPB: Why do you think that the collective fund ratings of investment advisors offer valuable insights given that we all have seen over and over againg that more than 80% of active fund managers are collectively not beating simple index strategies?

OK: Funds will receive a high SharingAlpha rating only when the different raters expect the fund to beat the passive alternative. Predictions based on collective wisdom have been proven to work in plenty of cases. Furthermore, qualitative fund analysis - using for example factors such as cost, capacity and active share - have also been proven to work and using a large group of market experts will make this task possible.

MPB: Is SharingAlpha also interesting for afffluent and high-net-worth investors?

OK: Yes, the fund ratings and raters ranking will certainly be followed by all types of investors.

MPB: How can the private banking industry take advantage of SharingAlpha’s offer?

OK: Number one, to improve fund selection and asset allocation recommendations based on the collective wisdom that will be shared on SharingAlpha. Number two, to build their track record and prove to clients that they are able to add value to their portfolio and justify their fees.

MPB: Thank you, Oren!

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the-question-for-wealth-managers-is-no-longer-if-they-should-have-a-mobile-app-but-how-they-can-develop-a-winning-mobile-app11

The question for wealth managers is no longer if they should have a mobile app, but how they can develop a winning mobile app to provide them with an essential competitive advantage.

Almost eight years ago, in July 2008 the Apple App store was launched and Google Play followed only a few months later. Since then the app market has grown, apps have become an essential part of our lives and the technical possibilities have developed a lot. The wealth management industry is typically not among the first movers when it comes to technical innovations but we have seen that the market of mobile apps for wealth management is slowly but surely catching up. In our latest study Mobile Apps for Wealth Management we have analyzed the mobile apps of 30 of the biggest wealth managers worldwide. We have found that in contrast to the previous years, the number of wealth managers that offer dedicated apps to their wealthy clients has increased (from 63% in 2015 to 82% in our latest 2016 study).

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