Private banking and wealth management are, by their own admission, not quite up to speed with digital innovation, and the fintech community agrees.
Reporting from this year’s Finovate conference in London, Private Banker International looks at five areas of innovation private banking can incorporate from the world of fintech to improve the digital experience offered to high-net-worth clients.
1. Unlock the future
While no innovation for private banking can enable a bank to physically predict the future for their clients, platforms exist that can do the next best thing.
Swiss firm, Crealogix, has unveiled the prototype of its TimeWarp platform, which will provide a visualised insight into the possible outcomes of financial decisions, factoring in additional costs, risks of shortfalls, account history and so on.
“The idea with this kind of delivery is it makes it simpler,” Jo Howes, Crealogix’s commercial director says. “It makes it easy to understand and visualises everything.
“If private banking can offer that innovation within its own branding, banks are not losing customer loyalty – they’re just delivering greater efficiency.”
2. Integrate with social media
As tech giants like Facebook and Apple begin to enter the financial space with revolutionary innovation, private banking must find ways to harness digital offerings more closely with the social media tools that clients use.
“We all engage with social media. We open Facebook or WhatsApp many times a day and banks are starting to lose their customers’ grace,” Guy Talmi, chief marketing officer of Israeli firm PayKey says.
PayKey is an innovation which enables users to make payments or request funds from the comfort of their keyboard within any app without having to close it and switch to their banking application.
A white-label product, PayKey enables the bank to customise the user experience to its own branding and specifications, choosing the services available, limits on transfers, method of additional verification and so on. It can also be used as a means of communicating directly with their customer, through sending notifications or reminders.
3. Onboard new clients remotely
KYC protocols are a necessity when acquiring new clients but can be lengthy and have historically needed the physical presence of said new client. Cyber-identity platforms are offering innovations in which private banking clients can be on-boarded anywhere remotely.
Scanovate is one such company which does so using facial recognition software and is currently used by the five largest banks in its native Israel.
British firm iProov unveiled its Palm Verifier product at Finovate this week. iProov won Best of Show at 2018’s event and has now gone further launching a platform enabling customers to verify themselves simply by hovering their palm above their device.
iProov founder and CEO, Andrew Bud, says, “We’re helping a bank like Rabobank sort out all their KYC requirements for mobile-enabled customers in 35 seconds.
“We’re enabling ING to onboard a brand new customer from beginning to the account active in under four minutes.”
4. Connect to clients in better ways
Private banking clients are cash-rich and time-poor and may see a face-to-face meeting with their bank as time-consuming and potentially logistically impractical. How then can private banks provide a means of communication which does not dilute the personal touch necessary in maintaining effective banker-client relationships?
Whether it’s a secure and compliant chat platform like Qwil Messenger, 24sessions’ video-chat tool, or Glia’s offering that combines the two, fintech firms are finding ways that banks can communicate with their clients from anywhere in the world, without surrendering the bespoke service that the client base expects.
“Anything with a complex journey online, you need a lot of options,” Patrick Yoon of Glia says, “You might like video-chatting, I might like using WhatsApp. So it’s all about the preferences that a customer has, and [private banks] aren’t matching those right now.”
5. Adopt invesment tools for the next generation
There is an emerging class of investment tools which offer simple and transparent investing within the confines of a mobile app. The younger generation of wealthy people may feel right at home with these innovations. Traditional private banking and wealth management may then find itself increasingly unwanted as the technological expectations of clients leave them behind.
Cybiwealth, for example, is a digital platform allowing users to own shares in large companies like Coca Cola, with a minimum of only £500 capital needed to get started.
There are also several white-label innovations which can be plugged in to private banking platforms, offering simple wealth management solutions to existing clients. MyWealth by Dorsum is one example that was shown off at Finovate this week. It combines investments with AI-driven advice to give the novice investor the foundation needed to get started.
Finovate awards best innovations
Finovate organises six conferences each year across four different continents in which fintech firms showcase their latest innovations through 7-minute live demonstrations.
Finovate Europe was held in London this week, involving 64 such demos as well as insights and opinions from senior figures from the tech and finance worlds, including many from private banking.
Each conference recognises the eight best innovations with Best of Show awards, as voted for by those in attendance. Of the companies featured above Crealogix, PayKey, iProov, Glia, and Dorsum were all among the eight Best of Show award winners at Finovate Europe this year.