The Journey for Digitization in Private Banking

Posts Tagged ‘private banking’

The Journey for Digital Private Banking

Thursday, December 4th, 2014

Digitization in Private Banking must meet more demanding criteria than those of Retail Banking: Relationship Management is more intensive, products are more complex and greater confidentiality and security are required.

The upcoming client generation change to digital natives demands digital transformation in daily business: Those who are late will be punished by life itself! Providing social business technologies strengthens communication, deepens relationships and stimulates business activity. Digital transformation is happening – with us or without us.

Additional Challenge

There are good reasons why the so called “Digitization” in Private Banking cannot be covered by existing and enhanced eBanking functionality: Web 1.0 technology may provide content presentation such as portfolio asset reporting and product fact sheets to the client. It also facilitates direct order capture by the client using web applications. The growing support of content management systems and web apps for BYOD (Bring your own Device) certainly improves services for Digital Natives in the Retail Banking segment. But does this meet the requirements of Private Banking?

Private Banking is a relationship business, multi-directional interactions are the rule!

Private Banking is a relationship business – in my view it will remain so. It should at least be guaranteed in a bidirectional sense between the client servicing unit (UBS: Client Advisor/Kube, CS: Relationship Manager) and the portfolio owner. What is demanded for high-value clients, is multi-directional assistance from experts in asset allocation, research and (still) tax optimization side. This should be driven in active or reactive manner.

Straight through reaction to events

Whether single events like capital flow, bond maturity, market movement or an overall end of day portfolio health check report the need for action, depends on the Alert System availability within the current B2E Intranet. What is important is the personal handling of the action by the relationship manager. See also our Use Case Investment Process of a Private Bank.

A highly focussed communication and collaboration effort will then lead to the elaboration of the best possible measures and to a commonly agreed investment decision for the client.

Tailored Investment Decision or Mass Customizing (Hybrid Approach)

Algorithm-based rules can help client advisors in the evaluation of rebalancing needs for preparing specific investment shift proposals. But, there is still an overall perspective to be gained by considering the historical and current personal sensitivity of the investor. Generalized and uncommented direct digital recommendations could jeopardize client satisfaction.

External and internal compliance regulations are constantly increasing. Applicable Offering restrictions based on each beneficial owner’s domicile or the need for identifying the investor knowledge and experience to verify suitability of a recommended asset class selection considering former risk capacity and assumed risk tolerance result in communication needs as well.

During the lifetime of a discretionary mandate, mass customizing may be feasible for a defined investment strategy. But this earlier defined profile should be verified from time to time by a person to person dialog (P2P) considering the historic performance and risk figures as well as the experienced risk capability.

Conclusion: Genuine portal systems but with “Social Business” are needed

Not only for the advisory digital private banking and discretionary wealth management segment but also in the following business areas we still require flexible but complex portal solutions as they are implemented in internal workbench (UBS: Client Advisor Workbench) or workplace (CS: Frontnet/InvestNet) solutions.

Sales support of Discretionary mandates / Power of attorney
Asset Management consulting for institutional investors
Investment recommendations for family offices and external asset managers (B2B)
Integration of Investment Banking services for corporate clients

These Java based platforms integrate not only content by Content Management Systems (CMS), but also complete applications in standardized business processes (BPM) such as the systematic advisory process. So what is missing?

The human factor. Business is Human!

Without trust in the relationship management we cannot expect sustainable success at longer term! Do our kids or grandkids open our mind to what has been achieved in public social networks the years since Zuckerberg launched his Public Social Network to share personal views? Digital Natives build wealth anyway, either from business success or from inheritance – they need personal advice in a digital way!

The following sections present the current state of our development in sample configurations.

Systematic Digital Private Banking, our Products ready for Use

Social Business with genuine Web 2.0/Enterprise 2.0 capability.
Our products follow an integrated approach and embed public social networks as LinkedIn, Xing, Google+ and Twitter right from the start.

All features support successful collaboration, cooperation, Social Networking and Profiling. Existing applications and business processes can be integrated thanks to the open Java portal system Liferay. This product was placed in leading positions of Gartner’s Magic Quadrant for horizontal portals for 5 years in a row.

P2P Communication: An instance for Social Graph 2.0

Social Graph visualizes your multidimensional and multilateral personal network and lets you directly interact with your clients and partners (P2P) by M2M (machine to machine). This plugin provides enormous support potential.

Links: Product description Social Graph 2.0 / Use Case Investment Process of a Private Bank

Who is Who 2.0 – Together on a personal level

Who is Who 2.0 is used at a personal level and provides everything that is of value for profiling and the acquisition and maintenance of contacts. As well as from blog, personal documents and calendar, you also profit from direct chat/instant messaging and video call features. BYOD approach is guaranteed

Link: Who is Who 2.0

Yes we Know 2.0 – Collaboration, Knowledge Sharing in expert teams

Communication, Collaboration and Cooperation in teams is successfully practiced in Yes we Know 2.0. Video Conferencing, Knowledge establishment and sharing by Wiki, Library (DMS), common discussions in forum: with Yes we Know 2.0 you can cooperate not only with clients such as institutional investors (B2C), but also with partners like external asset manager/intermediaries (B2B).

Link: Yes we Know 2.0

All is One 2.0 – “Open but secure”

Openess is targetted. The move forward to the clients in B2C/B2B – environments requires extensive security measures for closed communities (Client <> Advisor) on Premise (internal server) or in secure cloud for a undisturbed relationship intensity. All is One 2.0 integrates all aspects and components in a role-based, secure system.