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banking across all verticals will be mobile. Firms need only two core tenants when dealing with a digital consumer: “Simplicity wins and design matters”
So, should incumbents be worried? Blackman says no, not really: “Until a big, game-changing proposition emerges, new players will in a sense, be doing nothing more than picking up the crumbs.” Fernandez holds a different view: “Generally speaking, many established banks and wealth managers have ignored the signals of change for too long and find themselves lagging behind.” In his mind, the largest danger facing existing players is their temptation to do nothing. Blackman adds that “should they choose to”, incumbents can make life very difficult for wealth management Johnny-come-latelies. They already have “the marketing momentum, infrastructure and processes in place—they just need the technological know-how.” Newcomers, he tells IBS, should be careful who they pick a fight with.
Dealing with other peoples’ money and running a highly regulated business leaves little room for experimentation, adds Blackman. No matter how “sexy” a piece of IT might look, clients will always demand proof-of-concept. “In wealth management, when the tech going gets tough, there can be no substitute for experience.” Clients who want to sleep at night, he says, deal only with the vendors that can prove their worth. “In other words, if it’s good enough for your closest competitors, it’s going to be good enough for you.”
“We think experience, and of course in many cases a significant and loyal customer base are not to be underestimated,” comments Hacking. “We believe that there is still a large proposition of customers who while
undoubtedly “multi-banking” will nevertheless want to keep the number of advisors with whom they deal down to a manageable number.”
So, where will the wealth industry end up in five years’ time? Trousdale believes that it will undergo something of a cloud-based renaissance. “Cloud technology has become pervasive in the financial sector – a big departure from attitudes that prevailed five to ten years ago. In the same vein, digital experiences provided by advisors will become non-negotiable for investor clients in a very short timeframe, likely less than five years out.”
“The pace of change has accelerated considerably these last few years,” adds Hacking. “A combination of new technologies and changing customer attitudes will mean that the winners will be those who a) put the customers they aim to serve first, b) remember that all customers, be they UHNWI or retail customers, want to be able to turn to humans from time to time, and c) and invest heavily and continuously on technology.” While many organisations have now understood this, he adds, there are still quite a number who continue to underestimate the level of continued investment and effort required to both keep up with and gain on the competition.
“Although nobody has a crystal ball,” says Fernandez. “It’s clear the industry will be very different in five years’ time. Hundreds of billions of dollars are being invested into the digitisation of our world, across all areas of life and this will have a huge impact.” At the end of the day, banks and wealth managers deal with information and data, which is the same resource the software industry trades in. “It’s all about connecting the dots”.
www.ibsintelligence.com © IBS Intelligence 2017
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