How does a cus­tomer choose their pri­vate bank? What dis­tin­guishes one pri­vate bank from another? In private banking, the ser­vice of­fer­ing is of­ten com­pa­ra­ble and prices do not play a pri­mary role.

A bank’s great­est dis­tin­guish­ing fea­ture is its cus­tomer ex­pe­ri­ence. But since cus­tomers’ ex­pec­ta­tions and habits have changed over the years, it’s vital that banks come to grips with new be­hav­ioural pat­terns. In ad­di­tion to phone and face-to-face contact, pri­vate bank­ing cus­tomers nowa­days also use email and so­cial media to communicate with their ad­vi­sor and con­duct bank trans­ac­tions. Dig­i­tal­isa­tion plays a piv­otal role, allowing for stronger cus­tomer ori­en­ta­tion and a better focus on in­di­vid­ual needs.

Cus­tomer ex­pe­ri­ence es­sen­tially de­pends on in­vest­ment performance, the efficient and cor­rect ex­e­cu­tion of bank­ing trans­ac­tions, how the customer views the company, and the per­sonal re­la­tion­ship of the wealth man­ager with the cus­tomer. What is often asked is whether the personal feel of cus­tomer ex­pe­ri­ence can be maintained when us­ing elec­tronic chan­nels.

Forward-looking software development?

Banks frequently try to sup­ple­ment cus­tomer ex­pe­ri­ences with on­line ser­vices, elec­tronic chan­nels, so­cial me­dia pre­sen­ta­tions, and mo­bile ap­pli­ca­tions. The suc­cess of these mea­sures is of­ten mod­est. Although the bank­ing in­dus­try had in­vested more money into IT than any other industries, re­search in­sti­tute For­rester Re­search con­ducted a mar­ket study in 2016 and con­cluded that cus­tomers’ expectations re­mained un­ful­filled, es­pe­cially with mo­bile bank­ing ap­pli­ca­tions (cf. For­rester’s 2016 Global Mo­bile Bank­ing Func­tion­al­ity Bench­mark). According to For­rester, this is because banks con­tinue to se­lect – es­pe­cially in the case of dig­i­tal cus­tomer ser­vices – an out­dated soft­ware-de­vel­op­ment ap­proach. However, these ser­vices are de­vel­oped with primarily stable tar­get states in mind. In addition, the bud­get that banks pro­vide for IT is pri­mar­ily for the ini­tial de­vel­op­ment stage. As soon as the ap­pli­ca­tion is “live,” it is re­duced and lim­ited to mostly cor­rec­ting soft­ware bugs.

If an en­ter­prise wishes to ex­ist in the long term, it should no longer re­gard dig­i­tal tech­nol­ogy as a means to an end. Dig­i­tal trans­for­ma­tion is no longer a sin­gle step to fi­nally re­gain a phase of sta­bil­ity, but an ongo­ing con­di­tion of change that is less pre­dictable than ever.

Flexible processes are demanded

Nev­er­the­less, the pre­sent-day bank­ing world con­tin­ues to be strongly char­ac­terized by the idea of sta­ble and struc­tured processes; this un­der­lies the con­vic­tion that pos­i­tive economies of scale can be achieved through stan­dard­iz­a­tion. Stan­dard­ized busi­ness processes undis­put­edly have their place and will con­tinue to do so. How­ever, pure busi­ness process so­lu­tions in the tra­di­tional sense sim­ply do not of­fer the nec­es­sary flex­i­bil­ity to make changes to the process quickly and fre­quently. It is pre­cisely flexibility that is re­quired to be able to ex­ist in a per­pet­ual state of dig­i­tal trans­for­ma­tion, whilst com­ply­ing with the in­creas­ing num­ber of reg­u­la­tions and avoiding an ex­plo­sion in costs.

Work au­toma­tion at Ap­p­way

The con­cepts and ideas be­hind work au­toma­tion of­fer a very promis­ing al­ter­na­tive. In the Dig­i­tal Age, a new form of au­toma­tion which pur­sues a col­lab­o­ra­tive ap­proach be­tween man and ma­chine is be­com­ing in­creas­ingly im­por­tant. Thanks to in­tel­li­gent and adap­tive al­go­rithms, such as those ca­pa­ble of learn­ing, the ma­chine is able to au­to­mat­i­cally and con­tin­u­ously ex­tract facts and re­la­tion­ships from data. Work automation en­ables hu­mans to make quicker, sounder, and more viable de­ci­sions, with­out getting pre­oc­cu­pied with the de­tails of in­for­ma­tion pro­cure­ment. Through new user in­ter­faces and ar­ti­fi­cial in­tel­li­gence, au­toma­tion is be­ing fur­ther ad­vanced. Ma­chine and man will thus in­creas­ingly merge.

In private banking, client on­board­ing may soon take place in the fol­low­ing way: the com­puter lis­tens to the con­ver­sa­tion be­tween the cus­tomer and his ad­vi­sor. In do­ing so, the computer cap­tures and analyses the rel­e­vant data, opens the cor­re­spond­ing ac­count au­to­mat­i­cally, and im­me­di­ately makes a pro­posal tai­lored to the cus­tomer. In this process, the ma­chine takes reg­u­la­tory com­pli­ance into ac­count, and the ac­count of­fi­cer has more time to de­velop a re­la­tion­ship with the client.

Supportive automation

Nowa­days, re­la­tion­ship managers have various moving pieces to manage and important regulations to keep in mind. As the ex­am­ple above shows, tasks such as record­ing data, main­tain­ing lists, and sort­ing e-mails will soon be a thing of the past. The goal is to become in­creas­ingly unbur­dened from ad­min­is­tra­tive ac­tiv­i­ties and dead­lines, and thus to focus more on the cus­tomer. A tar­geted ap­proach can then be taken to ad­dress customer needs, and ser­vices and pro­pos­als can be bet­ter tai­lored to them.

As de­scribed, automation sup­port­s the re­la­tion­ship manager so that she may fo­cus on de­vel­op­ing new client re­la­tion­ships or nurturing ex­ist­ing ones. The per­sonal con­tact and re­la­tion­ship with the client re­mains, but it is sup­ple­mented by elec­tronic chan­nels. Therefore, cus­tomer ex­pe­ri­ences of pri­vate banks in the fu­ture will be hy­brid.