digitizing wealth management - verdict · wealth management is being impacted by new entrants...
TRANSCRIPT
DigitizingWealthManagement
DigitizingWealthManagement
Challenges facingthe wealthmanagement market
Challenges facingthe wealthmanagement market
Changing customerbehaviourChanging technology
Challenges facing the wealth management industry
Wealthmanagement is
being impacted by
New entrants Increasing operatingcosts
Wealthmanagement is
being impacted by
Changing technology
Banking isundergoinga digitalrevolution
Cloud
Big Data
MobileBanking isundergoinga digitalrevolution
Mobile
Social
Internet of things
The market is disrupted by new entrants with innovative technology
Globally, only 25% of wealth managers provide customised advice online
*BCG Overcoming the Digital Dilemma in Wealth Management
Changing customer behaviour
Source: Capgemini33.5%
75%
44%
10%
Source: BCG
MEA region is the second-highestproportion of newly created wealth
of HNWIs in MEA prefer digital contact
Customers expecting a more digital experience
Source: Finextra Source: BCG75%10%
of PWM clients surveyed would like moreinteractive multichannel offerings
Intergenerational retention rate in PWM
Increasing operating costs
6271 75 75 74 7566
8881
87 90 88
60708090
100
The private banking industry’soperating costs are continuing tocreep up. The industry needs to
focus on working out its efficiencypoints and optimising them
Cost-Income Ratio 2007-2012 – Diversified Firms vs. Pure Play Firms
62
0102030405060
2007 2008 2009 2010 2011 2012
DiversifiedFlexibilityEconomies of ScaleSynergies
Source: “Private Banking Benchmark 2013”, Scorpio Partnership, 2013
The private banking industry’soperating costs are continuing tocreep up. The industry needs to
focus on working out its efficiencypoints and optimising them
(Scorpio Partnership, 2013)
Pure PlayRegulation (MIFiD, FATCA etc.)Complex Financial MarketsPersonnel Costs
Delivering acustomer-centricdigital strategy
Delivering acustomer-centricdigital strategy
Requires constant investment and innovation
Must equally address clients’ and internal staff’srequirements
Should not compete with the relationship manager
Should look at 3 specific goals: revenue growth cost reduction advisor strengthening
A Digital Strategy…
Requires constant investment and innovation
Must equally address clients’ and internal staff’srequirements
Should not compete with the relationship manager
Should look at 3 specific goals: revenue growth cost reduction advisor strengthening
The external goal
Delivered at the rightplace, time and withfull transparency
Through the rightchannel
Personalized forindividual needs
Rightproducts
and services
Introducing new customer experience
Rightproducts
and services
The internal goal
Delivered quickerfollowing agilemethodology
New sources ofrevenue
New tools to empowerand educate internal staff
ITinfrastructure
andprocedures
Building a new efficient operating model
ITinfrastructure
andprocedures
Process simplification
Scalable, highly-automated back office
Rich, omnipresentchannels
Enterprise data model
How to get there
Process simplification
Real-time information
Rich, omnipresentchannels
Contextual information
A series of building blocks
Customer
Custom
er InteractionsWWW
Kiosk
ATMW
eb
Digital Engagement
InternalEvents
CustomerInsights
Products
Decisions
Custom
er InteractionsWWW
Web
Mobile
IVR
Branch
ExternalEvents
TheopportunitiesTheopportunities
Opportunities for the wealth management industry
Current players stillwell positioned
Strong fundamentalsCustomer behaviour
Social
Current players stillwell positioned
Digitization
Strong fundamentals
of the MEA HNWI’s are confident in theirability to generate wealth in the nearfuture
87.2%MEA annual growth in millionaire
wealth through 2018, trailing only Asia
9.5%
Strong fundamental growth in demand underpins this opportunity in wealth
of the MEA HNWI’s are confident in theirability to generate wealth in the nearfuture
Customer behavior
High Net Worth Individuals place more trust in wealthadvisors than the rest of the world
Wealthy individuals in MEA are 48.2% (the highest)more inclined to pay for a more customized level ofservice.
Trust
Willing to pay Wealthy individuals in MEA are 48.2% (the highest)more inclined to pay for a more customized level ofservice.
Assessment to be made based on the above criteria
HNWI in MEA are more inclined to seekprofessional financial advice that the rest of theworld
Greater demand
Great opportunity to develop an increasingly client-centric service model to grow revenues
Digital
Reduction in customerattrition as a result of havingan advanced digital offering
5%Increase in revenues from crossselling as a result of having anadvanced digital offering
2% - 5%Efficiency gains from greaterautomation and more streamlined processes
10% – 15%
An advanced digital strategy will allow banks to lower costs and improve customer service
Reduction in customerattrition as a result of havingan advanced digital offering
Increase in revenues from crossselling as a result of having anadvanced digital offering
Efficiency gains from greaterautomation and more streamlined processes
Social
HNWI more likely to makebusiness decisions with socialdecisions in mind than the rest ofthe world
55% “Ample opportunity exists toguide, educate, and supportHNWI in relatively new socialimpact endeavours such associally responsible investing andimpact investing”
Tapping into this can be an important revenue stream for wealth managers
*MyPrivateBanking report March 2015
HNWI more likely to makebusiness decisions with socialdecisions in mind than the rest ofthe world
“Ample opportunity exists toguide, educate, and supportHNWI in relatively new socialimpact endeavours such associally responsible investing andimpact investing”
Conclusion
Opportunityabounds, but so
does competition.Customer
expectations areraised.
Opportunityabounds, but so
does competition.Customer
expectations areraised.
Thank you
temenos.com