Jun. 17, 2010
Talk to a private banker about the Internet and the usual response is a shrug of the shoulders. Dig a bit deeper and you hear that wealthy clients are too conservative, too cautious or too old to use the Internet, either for research or for transactions. Instead of just typing messages into their PC or smartphone, supposedly they don’t want to compromise their privacy on the worldwide web, they value personal service and the direct conversation over the phone or in person.
Given this mindset it is no wonder that for many private bankers and wealth managers attracting and serving clients online has a low priority. There are only very few private banking innovators that offer specific Internet-based private banking to their clients. For example, the Swiss bank Wegelin launched Nettobank a few months ago, an Internet start-up for affluent clients. The big banks, like UBS or Deutsche Bank, usually have good transactions platforms for their retail clients, which are also open to the private banking segment. But you’ll find very little customization for the private banking client. The majority of private bankers and wealth managers offer little digital innovation for their most valued clientele. Many private banks don’t even offer a transaction platform - Julius Bär is only the most prominent example of this omission.
We think that this is a huge mistake. The client base of private bankers and wealth managers doesn’t stand still, their customers are in the middle of profound technological and cultural changes. Ten or only five years from today a new generation of private banking clients will have taken over. The 30 or 40somethings of today, the majority of whom have yet to inherit a lot of wealth or make their fortune, will be center stage for every private bank in a few years’ time. This generation is not only 100% online-literate, they are also increasingly, and happily, using social networks like LinkedIn, Facebook, Twitter and others.
Any private banker who is interested in winning over this new generation of wealthy clients needs to identify a solid online strategy that addresses the three key challenges:
- How can I offer my existing clients an online private banking platform that not only allows transactions but also incorporates the traditional values of private banking such as heightened privacy, personal contact and valuable, personal advice
- How can I attract new clients through an innovative and useful public web presence. This includes traditional online-issues like usability and design but also interactive features like smart tools to show the bank’s value to the potential new private banking client.
- How can I take part in my target group’s everyday conversations on social media and become visible on social networks like Facebook, LinkedIn or other niche media in a positive fashion.
The last point is probably the most complex challenge as these media are terra incognita for most private banking providers at present. Yet, it is also the most important to solve. A forthcoming report by MyPrivateBanking will tackle these questions in depth.
Data source of chart: MyPrivateBanking Research Report