UK-headquartered Coutts has experienced a significant rise in popularity of its digital service offerings. Joe Norburn, managing director of digital and client solutions at the private bank, talks to John Schaffer about how the bank is prioritising its digital channels while also focusing on maintaining its traditional and personalised approach
For a market that is so dependent on offering an impeccable level of service to clients, it can often be surprising that the private banking and wealth management industry, on the whole, has been slow in its provision of digital channels. However, enhancing digital capabilities is a significant priority now for private banks, particularly as wealthy clients have much higher expectation levels in contrast to the average retail banking customer.
Joe Norburn, managing director of digital and client solutions at Coutts, is keen to reveal the private bank’s digital strategy. A full suite of services is being offered to Coutts’ wealthy client base – ranging from detailed analysis of portfolios to a digital concierge service. He says that the UK-headquartered private bank offers all the "everyday banking services" – such as viewing balances and performing transactions – via digital platforms.
According to Norburn, a particularly popular feature is the ability to provide a valuation of the client’s portfolio in real-time. The bank has also been able to go progressively paperless via its vault service – allowing letters and documents involved in correspondence between Coutts and its clients to be stored digitally.
Norburn says that digital penetration has soared amongst Coutts’ clients and is, currently, the bank’s largest touch point as well as its biggest transactional channel.
"We are currently processing in the region of just under £60bn of payments and transfers over a rolling 12-month period," he says.
The uptake of Coutts’ digital channels has been equally split across different age groups and geographies in the UK. The bank’s older clients, Norburn adds, tend to favour tablet interaction, where they have "jumped a technology gap" and foregone PCs in favour of the latest gadgets.
"We have to make sure that the tablet experience we deliver is fantastic, because otherwise clients may revert to more learned behaviour," he says.
Norburn acknowledges the difficulties of offering a streamlined digital solution to private banking customers, where client numbers are modest in contrast to retail banking. He suggests that it can be easier to develop digital propositions where client demands are less sophisticated.
"Whether you’re implementing digital offerings for one client or a million clients, often the fixed cost is the same. Trying to make a business-case work on a fewer number of end users can be more challenging. Therefore, getting the funding to make changes can be more of an uphill battle than if you were in a retail bank – because numbers win out.
"The irony is that an UHNW client will expect a higher level of service than if they went to a high street bank. It means you have to be conscious and smart about where you put your investments up front."
Being Royal Bank of Scotland’s (RBS) private banking arm, Coutts has the advantage and ability to leverage upon the wider group’s digital provisions, thus achieving scale in terms of innovation research that may not be available to some of Coutts’ competitors.
"Whilst Coutts is a big bank in the private banking/wealth management space, we’re not a big bank if you measure us up against the high street clearers. One of the benefits that we can draw from being part of the wider RBS organisation is that they are accessing and interfacing with millions of clients, whilst we have tens of thousands of clients."
Norburn says that presenting information in a clear fashion can also be a challenge, especially if a client is less financially literate, and tells PBI how Coutts mitigates complexity issues: "We work almost on a pyramid principle. We present the key messages and allow clients to explore deeper to the extent that they want to, making sure they can get back to those key numbers or messages."
The key to successful digital channels is not merely based upon front-end developments. Coutts also made changes to its core banking systems four years ago. Norburn tells PBI that this has made digital innovation easier.
"We were able to massively simplify our architecture, replacing some 30-40 systems with a core banking platform from Avaloq. It was a multi-million pound investment, but almost with one swoop it massively modernised the platform that we were on. We also delivered a change in our digital architecture."
Norburn adds that the core banking system update has also allowed the bank’s data to be more consolidated, where it is no longer spread across a number of different legacy systems. This has enabled Coutts to offer more personalised digital services. The superior presentation of data has allowed private bankers to access up-to-date information on clients, thus taking a degree of friction out of face-to-face and telephone interactions.
Although the uptake of digital channels has been significant amongst Coutts’ clients, Norburn still feels they are mostly supplementary to the full private banking experience.
Norburn reiterates that Coutts’ aim is to give its clients as much choice as possible, and that digital channels are not being positioned as an alternative to the personal relationships offered through Coutts’ RMs. Instead, he feels that digital enhances the client experience in the time between interactions with a RM.
"The client will become increasingly self-aware. We can then get to the essence of the conversation more quickly and focus on what we’re here to do, which is to add value to their circumstances, as opposed to using it as an opportunity to catch up on the basics."
Norburn says that Coutts is aiming to bolster its digital wealth management capabilities and drawing inspiration from robo-advisors such as Nutmeg and Wealthfront, allowing clients to engage in basic investment needs such as buying into a particular fund.
However the key focus is still driving convergence with the RM. Coutts is taking inspiration from RBS’ and Natwest’s mobile channels, and Norburn adds he has also been impressed with Citibank’s integration of thought leadership pieces into its digital interactions. Moving forward, Coutts will continue to take inspiration from multiple areas, says Norburn.
"I don’t think there’s any one benchmark. That’s not because there aren’t brilliant alternatives out there, it’s because Coutts is a private bank and a wealth manager, and we have to look across that spectrum – from high street banking through to private banking, from relatively simple investment scenarios through to complex, holistic advice. We have to cherry pick and make sure we have our bets in the right places."