Suvo Sarkar, senior executive vice president and head of retail banking and wealth management, at Emirates NBD, examines how the global wealth management industry is transforming and evolving to adapt to the growing focus on digitalization.
Across the globe, 2016 and 2017 were marked by high volatility in capital markets with resultant slower economic growth.
Interestingly, the slowdown in markets had a limited impacted on the wealth management industry, which recorded 7.5% growth in HNWI population, and 8.2% increase in total wealth in 2016, according to Capgemini’s World Wealth Report 2017.
The same report also predicts HNWI wealth will surpass €100trn by 2025, with affluent households holding more than €1m growing at a stronger rate (Source: BCG Global Wealth Report 2017).
Closer to home, private wealth in the MENA region has witnessed an even stronger growth of 8.5% in 2016, and expectations are that Vision 2030, the KSA government reform, will serve as a catalyst to accelerate this growth.
Interestingly, despite the unpredictability, Emirates NBD Private Banking witnessed an exceptional year.
Additional assets under management were acquired in core markets – from both increasing share of wallet of existing clients and onboarding new clients – as well as from strategically expanding client coverage into two new market segments and geographies, namely institutional investors and African High Net Worth (HNW) and Ultra High Net Worth (UHNW) individuals.
What is more interesting than the quantitative growth is, the manner in which the global wealth management industry is transforming and evolving to adapt to the growing focus on digitilisation.
Easy access to a universe of information and research, omni-availability of digital resources through tablets and smartphones as well as the appearance of AI and machine learning are starting to disrupt the traditional private banking model.
HNWIs – particularly the new generation of under-40s – are considerably more aware of opportunities and risks; often even faster than their relationship managers can inform them.
Wealth management tools
The availability of innumerable online wealth management tools that enable HNWIs to assess, analyse and explore opportunities for growing wealth has also led to clients reducing their reliance on wealth advisors.
Indeed, a significant percentage of the world’s super wealthy is interested to work with ‘Big Tech’ firms like Amazon, Apple, Google and AliBaba because of their greater innovation capacity, efficiency, transparency and the online excellence they bring to the table.
So is the role of the private banking relationship manager becoming redundant? Quite the contrary.
Clients will need a helping hand guiding them through the incredible maze of fast-paced information available in real time and the often conflicting myriad of opportunities for growing wealth.
HNWIs also believe that tech firms often fall short in the areas of data privacy and security as well as human involvement.
The services of a dedicated private banker – who is aligned with your interests and understands the nuances of your risk profile – are even more crucial today as clients move towards exploring hybrid advice solutions.
With the emergence of this hybrid model – an omni-channel automated investment platform with human interaction and intervention – private banks need to consider partnerships with technology providers to stay ahead of the curve and offer demanding clients the most efficient way to manage their finances.
Emirates NBD is taking important steps in this direction. Given the bank’s considerable financial and value-based commitment to incorporating technological advancements into every aspect of its service portfolio, Private Banking at Emirates NBD has upscaled its tech offering, offering customers instant access to updated portfolios on online and mobile banking as well as providing FaceBanking video banking that allows them to speak to a bank agent day or night.
In addition, customers will also soon be able to access automated algorithm-driven financial planning services through a hybrid service solution that will offer our clients the entire breadth of investment solutions and insights at their fingertips, along with the personal expertise of our private bankers and investment advisers.