Private View Blog: High time private banks started mining their data riches
Private banks love to talk about “customer experience” and the role relationship managers play in facilitating these “journeys”. But some are starting to realise that if the route-map, vehicles and travelling companions have not been prepared in advance, the journey can come to an abrupt halt, in the middle of nowhere.
A recent rooftop symposium at London’s Grange St Paul’s Hotel, under the guidance of technology provider Appway, attempted to examine these relationships from the perspective of clients, as well as wealth managers and tech firms.
It quickly became apparent that many sheepish wealth managers are in “survival state” at best, struggling to optimise vast reams of data they collect on clients.
“Clients are telling their banks: ‘I have other digital experiences in other parts of my life and I expect you to do better’,” said guest speaker Seb Dovey, founder of wealth think-tank Scorpio Partnership, but now working in an advisory capacity with a handful of international boards across other, non-financial sectors. “They would rate this industry B minus. It is not the equivalent of Netflix for these clients.”
While banks talk about “onboarding” and other key “magic moments” in their dialogue with customers, there is a wealth of data they are constantly collecting during discussions about properties, family members, businesses and travel destinations.
Countless families and high net worth individuals have complained to PWM over the years that if they are sharing all these valuable family secrets with their private bankers, trusting them with their ethos, purpose and family philosophy, then why is the result simply to try to sell them more structured products?
“If you can curate all this info then you have a right to do more with it,” believes Mr Dovey.
Working together
While most banks base their tactics on grabbing market share, assets, clients and staff from rival wealth firms, fellow panellist Roopalee Dave, director of wealth and asset management at EY, called for increased collaboration. “Banks should no longer be competing to serve the customer, but working together,” she said.
Privately, banks and consultants tell me wealth management is not a good listening industry, there is very little acknowledgement of organised thinking. Participants prefer to complain rather than research, debate and respect change and innovation.
We are trapped in a bizarre, parallel reality, where the banks all think they are experts and do not trust the knowledge and experience of their clients. Yet as Mr Dovey points out, wealthy families do not entrust two thirds of their wealth to be managed by their private bankers, because they perceive them to be irrelevant to their needs.
The answer, he believes, is through knowledge management. Private banks and asset managers regularly speak at conferences about how their product reigns supreme in the market, their portfolio managers have found a golden paradigm to locate the best investments and how their research teams have access to previously undiscovered information sources.
The truth is that investments, banks, funds are pretty much commoditised, providing near-identical outcomes. If you want to build a wealth manager for the future, believes Mr Dovey, the products and investment architecture are all there, it is the knowledge and data management system you need to build. This is where the big techs, particularly the Asian firms, have the advantage. If you can aggregate, analyse and utilise data and knowledge about individuals and families, then you can move into any business sector, including wealth management.
The complacent wealth firms gathered on the London rooftop in springtime might be wise to heed Mr Dovey’s words before their “customer journey” is derailed in the desert.
Yuri Bender is editor-in-chief of Professional Wealth Management. Follow him on Twitter @YuriBender
Register now for free access to PWM, and sign up for our newsletter.
