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IBS Journal June 2018


29


take up a more active role in how to implement the system, as they have to meet the demands of the customer. This means that the customer is the one to decide how much they want to be involved in their portfolio management, and the channels through which it desires to do so.


Schramme’s last highlighted point is that a more digital ecosystem of interactions must be driven by data, to offer a more engaging and more productive relationship. “It’s augmented intelligence to the professional,” he adds.


Looking nice and fancy


When it comes to front-end, it is important to note that high net worth individuals like to interact with their bank in the same way any other person does: with transparency, and from the comfort of their own sofa. This means that digital, mobile platforms are the key to retaining consumers and keeping them happy – not different in any way from retail banking. Last year, when IBS Journal discussed this very topic, we found out that about 85% of high net worth individuals use three or more digital channels, yet UK companies were not catering enough to these needs and communicated, in many cases, solely via email.


This issue has become a pressing one due to two reasons. The first one is the frame of comparison that new front-end and digital banking platforms provide, which clearly offer a much more intuitive, convenient and multichannel approach. The second one is that younger generations will be taking over in the private banking clientele, which means that in no time digital natives will be staple in all areas, and will stoically demand multi-channel and digital management options. But more so, digital adopters are, in most cases, equally uncomfortable dealing in outdated channels.


We also pointed out that this very discrepancy has allowed many incumbents to rise to attempt to provide solutions in and around the areas of private banking, and wealth management as a whole. Executive vice president at Profile Software, Dr. Theodore Krintas, explains that while many smaller fintechs have focused on providing services and products with a more modern front end and at a more affordable rate, they are always sections of the whole system.


“Companies like ours provide products and suites that offer the best possible capabilities for banks and wealth managers, and they are tailored for each of our clients and their market,” says Dr. Krintas. “We invest in AI, robo-advisory, automation, data analytics and so on, because we want to be at the forefront of private banking systems, and we believe the industry is heading in this direction.”


machine to do an advisor’s job, but rather, to free up the advisor’s time so they can attend to more customers


“ It’s not about getting a


Peter Schramme: triple challenges to the current state of private banking


What are the main priorities for Profile Software’s Private Banking platform? “Maximum possible automation,” says Dr. Krintas. This has become a must in most suppliers, and Dr. Krintas is adamant to stress the importance of robo-advisory in his company. “It’s not about getting a machine to do an advisor’s job, but rather, to free up the advisor’s time so they can attend to more customers, and so, the process and the staff become more efficient,” he says. Following up from the aforementioned issue of the cost of income challenge, automation helps mitigate the impact of lower profitability by lowering the costs.


Dr Krintas also raised what he called “maximum possible accessibility”, a criteria whereby they hope to support the highest number of people accessing the platform, from personal advisors, to relationship managers and event customers. This ties in with the topic above regarding front-end channel access. Dr. Krintas hopes to provide a modern customer journey comparable to those found in retail banking. That includes mobile access, browser access, phone access and so on.


Just like we have seen in retail banking, regulation has driven new technologies coming out in the market. In the medium to long term, Schramme believes that Open Banking will affect private banking and wealth management just as much as in retail. Similarly, he believes that blockchain and smart contracts will end up making a break in this area just as it is doing in others. MiFID II and Open Banking have already hit the scene, and with GDPR having been recently implemented, the flow of technologies and regulatory pressure will be no different from retail banking.


www.ibsintelligence.com


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