MyPrivateBanking Blog
Daily Comments on the World of Wealth Management

Early this year WhatsApp has been acquired by Facebook for 19 bn USD - not without reason this acquisition has been well above estimated company value. Signs are good that WhatsApp will grow the current 450 million subscribers to reach 1 billion. The mobile app has been initially a mere alternative to SMS but has grown to become a blend of messenger and social media channel. Other messenger apps like WeChat (a strong contender in Asia) or Skype are also throwing their hat in the ring.

But what can private banks and wealth managers learn from WhatsApp and other messenger apps?

  • Convenience. Clients are using the WhatsApp messenger as it is convenient to follow conversations, send pictures and because they immediately get notice if someone is available. Allowing clients to contact their advisor whenever she is online is a powerful tool. Wealth managers should go and fetch it.
  • It’s not a teenager thing anymore. Social media channels in general enjoyed a reputation of being only for a young audience. This age barrier has vanished and more and more older users are being drawn into using apps, social media and messenger features.
  • WhatsApp is planning a telephone function and will in general broaden its functionality. Besides the possibility to conveniently chat or leave messages to advisor/ client soon a telephone function will be broadly available for the app - making the application more flexible than it is already today.
  • Messaging is not email. The hurdle to write an email is way higher compared to messaging, which combines the benefits of chat functions with the option to leave emails. There is no need for all flowery phrases for every message you write. Its fast, it’s fun, it’s what clients want.
  • Everybody knows it. Some wealth managers provide their own contact functions via app – that’s great and important. But WhatsApp is already known by the customer. Allow clients to stay in their comfort zone without having to learn a new technology. Most likely your relationship managers use it already, too.

Wealth managers and private banks need to think about how to leverage mobile messenger technology for their own business. It can be by using existing popular messengers like WhatsApp for some communication. Another option is the integration of similar messaging features in existing banking apps. And keep in mind: these options are not mutually exclusive.

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1. Innovative mobile payment solutions lack backing of strong trustworthy names. I just listened to an interesting panel discussion about mobile payments. There are now tons of interesting and great innovative solutions (examples are Apple’s iBeacon based and  NFC based solutions from various innovative start-ups like barcoo or netsize) but they are still lacking the backing of the big financial players. And this is the only way the consumer will accept new payment solutions. So start-ups - get the big banks and financial players involved!

2. Experience first: customers download apps for testing them - when they don’t fulfill customer’s expectations, the apps will be dropped. The implication here is simple: first, attract your clients by an excellent app description in the app store, screenshots and a strong marketing strategy and second, bind your customers through cool features, really helpful tools and a great user experience. This sounds simple - but many banks fail on it as our latest report testifies.

3. Mobile websites and responsive design gain momentum: the development of native apps is expensive and time-consuming. Testing is required as well as integrating feedback from the users. The advantages of responsive design are numerous. Besides enhancing SEO and ensuring a unified look and feel across multiple devices, there is no hurdle for potential customers to use the mobile websites of a bank since no apps need to be downloaded. It’s easy and flexible without requiring huge investments. Will browser based mobile solutions beat native apps in the short run? No, definitely not. Will it be a serious option in the longer run? Definitely yes, particularly for mobile solutions that do not require great design and all the bells & whistles of an expensive native app.

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For the upcoming report on Mobile Apps for Fund Management, which will be published within the next two weeks, MyPrivateBanking’s analysts evaluated 21 apps from 20 fund management companies worldwide. Surprisingly, the first difficulty came up right at the start of the evaluation process: finding a sufficient number of fund managers who provide an app for their own funds was hard. Most billion dollar fund firms don’t bother to provide mobile apps to the investors of their funds. But why is that the case?

· Fund managers feel that investors don’t need to check their funds frequently, so what’s the use of an app?

· The finance industry as a whole is not really known for its fast adaptation to digital trends – and fund managers are showing a particularly hesitant attitude.

· Fund managers believe that intermediaries are doing their jobs of promoting their funds anyway – so why bothering oneself with an ‘extra’ platform like an app?

· Fund managers think that their good ol’ websites are already sufficiently satisfying their customers’ informational needs.

· Fund managers fear that another communication channel makes their compliance situation even more complex. So why not skip the mobile channel completely?

Should these arguments and barriers be taken seriously or how strong is the case for fund managers’ mobile apps? Don’t miss our upcoming report….

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When walking into a Walgreens store (a large pharmacy chain in the US) it is likely that an electronic coupon pops up on your smartphone which advertises the local goods while showing you where to find them in the store. At Macy’s, a major department store chain in the US, customers have access to free WiFi and are able to scan QR codes of products to review online product descriptions, uncensored customer reviews or see for which range it is worth coming back to the store the next week.

Those are only two examples for the brave new world of omni-channel consumer experiences. Be it from home at the desktop computer, on the go with the mobile phone or at the brick and mortar store around the corner, the tech-savvy consumers expect everything to be readily available at their fingertips. According to Google already 90% of mobile users use different devices sequentially to accomplish a task over time. And as the industry evolves toward a seamless omni-channel retailing experience, the distinctions between physical and online will vanish, turning the world into one big showroom without walls. Location based services, augmented reality and social media integration showcase that the opportunities are endless.

Banks and financial institutions however, still seem to have difficulties making first steps towards an omni-channel strategy that basically requires finding a platform that helps to keep messages consistent across different touch points and devices. This is one of the major results of our upcoming report “Mobile Apps for Banking 2014 – from Multi-Channel to Mobile First”. Only a few years ago many banks have made significant investments in Multi-Channel concepts and today they seem to be hesitant to switch quickly to a mostly mobile based strategy. But consumers demand to carry their bank branch in the pocket and therefore it seems unlikely that banks can avoid the mobile re-invention of their business.

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Android rocks the market and hits 81 per cent of smartphone share in the last quarter of 2013 worldwide. Google´s operating system grew by an impressive 51.3% compared to last year. The winner besides Android was Windows Phone with a massive growth rate of 156% but accounting for less than 5% of the overall market. Apple´s operating system has lost 1.5% of market share but still managed to grow shipped devices by 25% compared to the last year. Blackberry, is the loser of the last year´s race of operating systems with a loss of 40%.

Which operating systems should bank´s consider for the development of mobile banking solutions?

Our underlying assumption is the more operating systems are available the broader a reach will a bank have with regard to client base and spent time on apps. Therefore an app for a single operating system is not an option. Clearly, there is no way around Android´s operating system. Surprisingly, there are still banks which do not provide a single app for this dominant OS.

As our upcoming report on Mobile Apps for Banking 2014 shows, banks have been and are developing mainly for iOs devices, treating Android in many cases as a second choice. Numerous apps (especially supporting apps) were only available for iOs whereas only two apps were exclusively for Android.

The demographic profile of iOs users is at this point somewhat more attractive to banks: the users of iOS are more likely to be 35 or older and are more likely to have a household income of USD 2000k or above per anno (source: Hunch Inc.). But that should not lead banks to believe that only iOS users are an attractive segment. Even though Android users at this point might be somewhat younger and poorer, this will quickly change over the coming years as these users are growing up and moving to professional life. We are not expecting that many of them will change their operating system preference to iOS on that journey.

But banks should also consider developing for Windows Phone right now since the operating system is growing immensely and the market is not yet overcrowded. Research for the upcoming Mobile App for Banking report shows that Windows strong app development support results in better performing and full-experience apps - essentials to impact on customer retention and attract potential new clients.

As for Blackberry clearly the user profile, with an average older and wealthier user, has been a strong motivation for banks to develop apps. However, it remains to be seen whether the operating system will survive the current crisis.

For the future we see apps more frequently in different context and on more and more diverse devices. The upcoming report reveals that more banks are investing into the release of Windows 8 apps which are both suitable for tablet and desktop, also several eReader apps crossed our way. Banking apps will grow into all kinds of devices such as television and wearables like Google Glass and smart watches. This trend will continue and extend to devices today unimaginable and only inspired by science fiction (but becoming reality soon…).

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One of the most exciting digital developments in the financial services sector is the use of cloud computing. Exciting, because it’s one of the hottest trends around in financial technology at present. The financial sector, not known for its fast adaptation of digital trends, due to natural concerns where everything is about client data and money, is taking its first steps into this brave new world.

The potential benefits are obvious. Besides offering secure deployment options, cloud computing substantially speeds up time-to-market for new products. The keyword is efficiency: relying on excelling, up-to-date and trustworthy IT structures, enterprises reduce costs as well as risk. They don’t need to make big decisions too soon - hoping for a happy ending – but can rather go for testing the alternatives and, thus, aiming for the proven best solution.

Additionally, as the demand for business intelligence analysis tools is increasing to better serve customers’ individual needs, so does the demand for IT that can cope with such huge amounts of data. Moreover, cloud systems offer the flexibility that in today’s fast moving digital markets give a real competitive advantage – without imposing the costs for restructuring the complex in-house IT systems.

For example, a bank could decide to combine a private cloud with extensive security provision for a CRM database while using a public cloud at lower costs for less sensitive tools like marketing and social media. Apps can be developed cost-effectively through platforms as a service. And all this without any capacity going to waste, since with a cloud, you pay for what you’ve used and no more.

However, concerns regarding security and client data issues still prevail and these are hampering financial firms from jumping into the enticing warm water, as ballyhooed by the numerous providers. Indeed, well-designed cloud systems often provide more sophisticated security systems than finance companies themselves do nowadays. However the mindset will change; this is one emerging field that it will be well worth keeping an eye on in the coming months.

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By Francis Groves, Senior Analyst

How far have compliance requirements for social media in finance come and exactly which are the most likely problems and the prime concerns of the regulators?

2013 saw significant strides being made towards making social media compliant in the banking and finance industry. This trend was particularly marked in the United States with the SEC signalling last spring that social media was an acceptable medium for disseminating the kind of information that could move stock prices just so long as the company’s investors were made aware that Facebook, Twitter & co. were going to be used as channels for this purpose by that company. In June the US’s Financial Industry Regulatory Authority (FINRA) announced that it would be carrying out spot checks on institutions regarding compliance in the social media arena. In a separate development, in September FINRA fined a broker for Facebook remarks about a company in which he and a few dozen of his clients held investments but which he failed to disclose in the Facebook entry. Finally, in December the Federal Financial Institutions Examination Council (FFIEC), which performs a policing role in relation to corporate practices of US banks and other financial institutions, produced its own final guidance on social media practice.

Just this week, the SEC issued guidance on the use of social media by financial advisors that makes clear that they are prohibited from using social media channels to advertise or promote themselves by means of client testimonials. Although customer testimonials may seem a fairly harmless form of self-promotion, under US law, as far as financial firms are concerned, testimonials are considered too selective and unrepresentative.

So, as far as the US is concerned the regulatory framework is fairly clear and, not surprisingly, expertise and resources to help the finance industry with social media compliance have become widely available. Social media compliance practitioners in the US include i-Social Smart, Actiance, Nexgate, GremLN, Gladiator Social Media Compliance Services, Smarsh and SocialComply from Temenos, the Swiss banking systems provider. Meanwhile, in Europe the regulatory picture is less clear with legislators and regulators still looking into the issues and considering their issues. Fewer social media compliance services seem to be available although some, such as Actiance and SocialComply, which are active in North America, also operate in Europe.

So what are the key demands that regulators have or may have in relation to social media channels in finance and what effect is this likely to have?

The following seem to be the main areas of concern in relation to social media in banking and finance:
- The risk of fraud / the danger to financial brands
- The danger of failing to take responsibility for social media content because the channel is deemed to be an   external third party
- Failure to train staff properly on handling social media as company representatives
- The danger of social media using customers privacy being breached (by themselves or staff)
- The problem of institutions responding to social media communications too slowly
- The danger of security breaches

Clearly these dangers are not negligible but neither should they create enormous problems for banking and finance staff who themselves are rapidly becoming more familiar with social media in ordinary life.

At MyPrivateBanking, we have consistently identified low cost advantages as being one of the attractions of social media. Effective use of social media gives financial institutions opportunities to both identify their own customers’ needs and preferences and to keep track of competitor activity in key areas. More generally and longer term, we see the banking and finance industry’s engagement with social media as empowering for customers and as an important factor in the achievement of better financial services than ever before. It would be a pity if regulation inhibits the growth of social media in finance and, to be fair, we believe that this is unlikely to happen. Many institutions will need outside help with achieving compliance in this field but the real danger may be that financial regulation of social media becomes unduly restrictive or, even worse, an excuse to stop necessary changes to the industry.

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Videos are a widely used tool in viral marketing as they convey a message ten times more powerfully than a text could do and they are easily consumed on mobile devices when on the go. Consumers don’t like spending time watching lengthy videos just as little as they like being spammed with advertisements. Personalized short videos produced with apps like vine could be an answer to that. These six second self-made videos posted on social media channels like Facebook or Twitter address the user in a quick and catchy way. Unfortunately, apart from a few banks, the financial world has not yet realized the potential of the self-made videos.

NatWest is one of the few banks using this new opportunity. The bank produced an array of short videos in order to reduce answers for user requests on their Twitter support channel to a single tweet:

https://blog.twitter.com/2013/natwest-gets-creative-with-customer-service-on-vine

And this is only one example of the potential of short videos: vine videos can be implemented and integrated virtually anywhere, be it a website or a PowerPoint presentation - revealing their true potential as an eye-catcher that grabs your visitor’s attention in a few seconds.

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The mobile payment industry grew substantially in 2011. There were already 212 million m-payment users at that time and the numbers have been growing significantly ever since. In past years, the largest banks worldwide were slow in adopting innovative payment functions, but now they are starting to catch up with industry trends. We will introduce some of the best payment options that we encountered while evaluating mobile banking solutions for the current Mobile Apps for Banking Report.


Contactless payments allow users to pay for in-store purchases by mobile phone without needing to provide a banking or credit card. CIBC Mobile Banking is an example of this, as it allows the bank’s clients to pay for their groceries, grab a coffee or buy a movie ticket with just a tap of their smartphones. Also, Itaú QR Card enables customers to make day-to-day payments by scanning QR codes of participating partners’ products, with the receipts being automatically forwarded to the client´s postal address.


People-to-people payments are ideal if users want to pay friends, family or acquaintances without needing their bank account details. Various alternatives are available on the market to satisfy different client needs. Commonwealth Bank of Australia’s app collection provides a solution for paying contacts by e-mail, mobile phone or even Facebook accounts. With the addition of another useful feature, clients of National Bank of Australia can also generate QR codes to request payments from their contacts.


Wallets commonly function like a virtual prepaid card that users can create by utilizing the app. BBVA provides such a virtual wallet and cross-sells small credit lines through an included financing calculator. The app allows users to directly calculate financing options and to apply for a loan in only two steps for purchases made with the credit card.


If clients of NatWest forget their banking or credit card at home they will still be able to get cash. The “Get Cash” option provides a code which clients can use to withdraw cash directly from any of the bank´s cash machines or at major supermarket chains.


Barclays Pingit has always been a front runner in mobile payments, allowing clients and non-clients alike to use the service. The bank has been popular for sending and receiving money using just a mobile phone, and in its latest update the bank has added QR code payment options for offline purchases.


Mobile payments are an increasing trend and there are numerous pathways which banks can choose to add more convenience to their customers’ lives and gain potential client interest. Banks need to pay attention to future trends and determine which payment methods will be dying off in the process in order to keep their mobile apps up-to-date and to win clients’ loyalty.

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(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.

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