(by Francis Groves, Senior Analyst)
In MyPrivateBanking’s latest report, ‘Mobile Apps for Financial Advisors‘, 9 of the 14 vendors covered told us that they provided private banks/wealth manager with some form of electronic vault functionality for use in conjunction with their advisor apps. We believe that this is an encouraging level of provision in this area but there is undoubtedly a lot more that could be done in this area to help advisors/relationship managers and their clients. Moreover, the document handling/electronic vault/secure mailbox sector is full of ambiguity and confusing terminology.
Our focus is chiefly on wealth management clients and their requirements but banks themselves can also be purchasers of electronic vault facilities, as remote back-up services, increasingly cloud-based. Of course, there is likely to be some overlap with the vault facilities that the banks themselves provide for their private clients but it adds to the confusion. On top of that, some service providers and industry specialists use alternative terms such as a ‘digital vault’ or an ‘Internet data safe’, not to mention brand names such as SmartVault, a US provider specialising in vault solutions mainly for accounting purposes.
More serious than the confusion over terms, is the lack of clarity over the details of these client vault services. For example, is it good practice to use the client’s digital vault for posting mail (and documents) as well as for longer term storage? If a relationship manager can put things into their client’s digital vault, can they also retrieve them if, say, they made a mistake and put another client’s documents there by mistake? Presumably, the client’s digital vault requires backing-up, so how quickly would the client have access to that in a disaster recovery situation?
It looks as if private banks and wealth managers are only just beginning to understand the importance of client vault facilities to their overall offering to their clients. Banks face decisions about whether to offer vault services as a way of differentiating their private banking services from their retail ones or whether to use the offer of a digital vault for clients as an incentive for paperless banking. Another area of uncertainty is the extent to which banks should allow clients to store other non-bank related documents, such as electronic copies of wills or deeds of ownership to mention just two, in their digital vault. Providing clients with a secure vault could well become a key way for private banks to ensure they remain (or become) a wealth client’s most important provider of professional services rather than the client’s lawyer or accountant, who may be able to offer their own digital vault service.
Private banks need to give clear messages about what their client digital vault facility can be used for, how secure it is (and whether this security provision is different from that for other banking services), the client’s responsibilities for keeping it secure and who has access to it, both for depositing documents and withdrawing them.