The private banker is far from being totally digitalized
While digitalization of private banking is a commonly accepted practice its usage should be carefully weighted with regular human expertise. Hundreds of years of banking experience will not be transferred to even the smartest AI models in just one day. Security and confidentiality concerns are for real. Even the most advanced technology will never replace a strong relationship of trust between a private banker and his client.
Private banking is a too complex business to be fully modeled
As the new EY Study “Digital Disruption and the Game-Changing Role of Technology in Wealth Management” points it out, digital is increasingly relevant in the private banking industry. It is not only the Fintech that can benefit from the digitalization of the financial sector, even if their whole activity is based on the extensive use of new technologies. Advanced digital tools should be appropriated by wealth management professionals. They are facing an increase in regulation costs and more and more regulatory constraints. They should be aware of the fantastic opportunities there are in using mobile channels. Their offerings should adopt an “anytime, anywhere” and “self-service” modes of delivery to clients. There are also great opportunities in data analytics and in intelligent advisory systems, real-time alerting and suitability monitoring.
Nonetheless, the first private banking resource is trust. The digital world is far from being fully secure and that is surely why most private banking companies do hesitate before investing massively in digital tools. Luxembourg, a country very well known for its expertise in private banking is a good example to illustrate how IT investments are made. The EY study shows that Luxembourg banks IT costs amounted to 15.8 percent on average with only a slow increase from 15,5 percent in 2009 to 16,2 percent in 2013. Swiss banks and their wealth managers have developed their special offering based on the Swissness concept around highly specialized and tailor-made concierge services. It does promote family values, heritage and tradition as a predominant part of their investment policies. It would surely be impossible to implement such concepts within a computer algorithm.
Human dimension of a private banker is his main asset
Digitalisation is definitely enhancing private banking services. Private banking clients are now tech-aware so they are eager to be provided with digital tools to intervene on their portfolios by themselves. Daily small operations should be conducted as easily as a common money transfer operated from a primary bank website. The private banker should be aware of his clients technological literacy. He should also be aware of the great opportunities there are to give his clients real-time access to data and markets informations. These innovative services would definitely add value to raw data clients are used to.
Since trust is the main resource of private banking we can be sure that digitalization means by no mean the end of the personal relationship with clients. These relationships will never be digitalized. The human private banker will never be removed from the private banking process and the digital tools will never provide clients with the same level of security and confidentiality a seasoned professional delivers. Digitalisation of the private banking sector is about increasing accessibility, saving time and providing the clients with clearer insights in real time. Digital tools are really complementary to the complex, specialized and very old business of private banking.