Wealth Managers need to Embrace Mega Trends Now to Survive and Thrive

Video transcript

1. What are the most notable effects of the pandemic in acceleration and deceleration of global megatrends?

Ackermann: So, one of the most notable effects of the pandemic is the scale and acceleration of several megatrends, and deceleration of others. Until the pandemic hit, almost everyone believed certain societal forces were here to stay, like the sharing economy, urbanisation and globalisation. Now, a lot of the megatrends have changed, and I would like to share them with you because I found them quite interesting. So, with the pandemic, the mega trends changed into a much greater focus on cost reduction, safety and surveillance and corporate responsibility. One of the top two changes we see in the global mega trends is the virtualisation of the workforce. We work differently, and of course, on top of that, digitalisation, which has a huge effect as well in our industry. And I would like to say also, I saw lately what happened is not only the rise of digitisation as a topic, but also knowing that we have to be much faster after the pandemic. There’s an acceleration of timing. So, it changed the trends on one hand, and on the other hand, really also the acceleration of making decisions, and of digitalisation.

2. So Helene, how can these global megatrends be translated and institutionalised by banks?

I think banks already started to really change the way they work. During the pandemic, they started to be agile. They started to flatten their hierarchies. They started to have the communication to make the decision-making process much faster. They also had digitisation, etc. They work differently, so we all work from home, we all achieved our work from laptops and mobiles, for example. So, if banks continue to really do that and make sure that they also have the capability in the future, what they learned during the pandemic will really help. Banks can use the mega trends in digitisation and work differently with their workforce. That's one end. On the other hand, we also see that the industry itself is changing. So, a lot of things or offers that used to be very important in banks are not so important anymore, like going to a bank itself, for example. We also see more and more neobanks emerging. This is a different approach- banks who were already innovative and continue to innovate. I think that's an important point. Customers today expect that their bank is innovative and inventive and will provide the right technology that the customer can use. And it's not only about accessing and having the right technology, but also make it a customer experience that can surprise and delight the customer. It doesn't matter if you're a retail customer or you’re a wealth customer. As a bank, you have to change how you work with all customers and how you can surprise them and have an innovative way. We saw in 2020 that even the wealth customers changed their perspective, they said for them to have digital offerings is far more important than the years before, an increase of 61%.

3. Where do you see the most urgent need when it comes to investment priorities within digital wealth services?

We did the research just lately with Compeer, which is one of the research companies in the City of London. And we talked to 500 investors, so people who are really in the wealth sector and investing their money. And we talked to them to understand what is important to them in the digitisation of the world. And I think we got a lot of valuable insight that I would like to share. And it's also important, one of the most important topics, and I also mentioned it before already, banks have to become customer centric. That was what the wealth investors also gave us as feedback. So, a lot of them just want to have life statements and performance reports. They want real-time data available online that they can select from, or have potential relevant information about future investments. Or even very basic things like administrative tasks such as changing their address and contact details. I think that's very important, only 8% said for them it's still important to have a personal telephone contact or meet in person. This means 92% of even the investors in the wealth area, they're really counting on digitalisation and having the right tools. And I think that's an interesting fact that we have to take into consideration moving forward.

4. So how can banks leverage the opportunity of digital services?

Half of all those investors that we spoke with are accessing their digital wealth service daily or weekly. So if you count that up, that's 52 or 365 opportunities to offer a value to this customer, to make an up-sale. But on the other hand, half of them were really not happy with they got with their investments, asset management, etc. as a digital offering. They didn't like it. They were even dissatisfied, a lot of them. So, the goal for wealth management firms is to really understand why they are dissatisfied and use those touch points to, as I said before, surprise those customers and also make use of the data and make offerings which they see as adding value. And I think that's something that should be worked on. On one hand, we also should use the digital channels on onboarding new customers, and also giving them the right messages and value-add services so that they stay. But then also with the existing ones to really make sure and understand what more can be done besides offering them the basic digital journey, really go beyond the borders and think about what can we do exceptionally for those customers. If we know that one of our customers likes to play golf, why not offer him automatically, with the right technology, additional, let's say certain offers for golf areas, etc. So really start not only onboarding and having the right to choose stations for different channels, but get creative. How can you work with those customers? How can you make a very nice experience for these customers to do business with you?

5. Can you demonstrate or give us an example of how the whole set-up of such digital wealth management services could look like?

Very interesting question, and I have a couple of use cases, but let's talk about one specific client today. So there's a German private bank we're working with and this German private bank has locations around the globe, outside of Germany, of course, in UK, China, etc. And they wanted to have an offering to their customer that they could access 24/7 as a digital service. And therefore, we worked with them on a robo advisor. So every investment that a customer does, which is more than USD 50,000, he gets a digital onboarding, he sees the possibilities of investment, he has a customer-friendly interaction. So therefore, they were able to offer the customer a 24/7 hybrid advisory service. He can still have the direct contact that he wants to, but he can have the full seamless experience on a digital journey when he onboards or he wants to make an investment with the robo advisory tool. We have a lot of other use cases. So in case you're interested to see how we can help you to get even faster, innovative way into the new and post-pandemic world, please visit our website. You will see an insight about wealth management with a lot of good documentation. What can be done? What are the trends? The important question is not just what can be done to be ready for our current situation, but also for the future? And it's time to act now and we’re looking forward to working with innovative organisations to realise their digital ambitions.