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It’s the Advisor, Sherlock! Global Leaders Agree on Key Issues, Opportunities in Private Banking

global private bankingThe recent Future of Private Banking and Wealth Management conference in London brought together leaders and CEOs from some of the most influential global firms to discuss the state of private banking and what’s ahead. Speakers included Coutts CEO Peter Flavel, UBS Wealth Management CEO Jamie Broderick, Credit Suisse CEO Philip Harris, HSBC Private Bank Global Solutions Group Head Nick Levitt and Hearsay Managing Director of EMEA Chris Andrew, among many others.
Here are some some of the recurring themes and highlights:

The New ‘Centaur’ Advisor: A Hybrid of Human and Machine

Almost everyone agreed that human advisors are not going away. Coutts’ Flavel brought home this point aptly when he gave the example of a cancer patient: However advanced our artificial intelligence (AI) might be, we will not let “Siri” tell a patient they have cancer and what they should do. While machines can crunch data and accelerate insights, human beings bring that all-important and powerful element to all relationship based business: empathy.

dena brumpton
Dena Brumpton of Barclays

Dena Brumpton, Head of UK Private Banking at Barclays, echoed the same sentiment when she said private banking will always be a face-to-face relationship business, but the services provided by private bankers will get progressively more digitized. Brumpton added that a successful strategy in this industry will need all three components: human, digital and data. In her words, “technology is here to enhance the client experience,” but not to replace it. As a result, we must find a middle ground – a digitally enhanced client experience – where certain tasks are automated so human advisors can focus on high-priority client activities.
Greg B. Davies, Founder of decision science firm Centapse and an expert in behavioral finance, agreed. In his opinion, the ultimate knowledge worker is a “centaur” – a hybrid between human and machine – that is capable of making the most optimized decisions. He views every client interaction as data and a touchpoint that gives a better idea of suitability, which will serve to optimize future decisions. But both must work hand in hand, and the ideal equilibrium has to be found.

Advisors are Critical to Customer Loyalty

Another big theme of the conference was how banking processes need to change from being focused on the bank to being focused on the customer. Regulatory guidance like the Retail Distribution Review (RDR) in the UK have made providing advice too expensive, thus creating a growing advice gap. Michael Harding, Partner at Oliver Wyman, shared global research which showed:

More than 60 percent of consumers surveyed said they didn’t know if they will stay with the same bank; only 20 percent said they would stay.

UBS CEO Broderick urged the audience to focus on asking, “what is the money?” as a general question to keep clients engaged. Broderick also spoke about the necessity to use digital channels and analytics to keep research accessible (and not too overwhelming) for clients.  UBS seeks to serve relevant content at the right time and proactively educating customers on what they should do with market information is where technology helps, and to do this at scale reliably and consistently, even for small clients, via technology.

Chris Andrew
Chris Andrew of Hearsay

Hearsay’s Andrew discussed how the customer experience is ultimately every company’s key differentiator, and how the advisor is the closest and most critical component of the client experience. Andrew emphasised that many companies spend a lot of effort investing in direct digital channels at the corporate level, but many times leave the advisor behind, resulting in a confusing and inconsistent experience for the client. If organisations are to become more customer-centric, they need to bring the advisor along in the digital journey.

Banks Must Re-establish Customer Trust

In his opening keynote, Coutts’ Flavel spoke about how “bankers” have become a collective noun for “bad people.” Many other speakers throughout the day alluded to this large gap when it comes to clients trusting their bankers. Building this trust again needs to be at the centre of any transformation project. Harris of Credit Suisse emphasised the need to focus on delivering advice, and not products, to help rebuild that relationship and remain relevant.
Perhaps this lack of trust and need for transparency is the biggest attraction of robo-advice platforms because they have created more transparency in fee structures, according to research done by Oliver Wyman’s Harding.

New Segments of Wealth = New Engagement Approaches

HSBC’s Levitt spoke about HSBC’s focus on the millennial entrepreneur, saying that they perceive this group of customers to be the fastest growing. According to their research, those that make up this segment are motivated and aspirational but not specific, and prioritize family and personal life over business success. And more importantly, Levitt added, “slightly less than half are thinking of selling their business.”
In Asia in particular, entrepreneurs are younger and have a larger proportion of women. These segments are different compared to current client segments served and will require private banks to rethink the way they communicate and address these customers.
In summary, the conference yielded great insights and discussions from top speakers, and saw attendees stay until close. While the vision for the future of wealth and asset management remains bright, the industry must prioritize its advisors and customers above all else.

Anita Moorthy

Anita is responsible for all aspects of marketing for Hearsay's European business, including pipeline generation, brand awareness and sales enablement.

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