Private banks and wealth managers need to incorporate cutting-edge technological innovation into their business models or risk becoming outdated, according to Tony Clark, managing director of digital IT consulting firm, Synechron.

“Individuals, and high-net-worth individuals (HNWIs) in particular, have certain expectations when interacting with any modern business – such as interactive and real-time accessible data, as well as the use of AI to automate process-heavy back-office tasks,” Clark told Private Banker International.

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“If wealth managers and private banks do not begin to incorporate technology-led innovation into their ‘real-life’ strategies, then they risk becoming increasingly outdated and ultimately losing their franchise in the market.”

Synechron this week published “Digital Strategies and Transformation 2019: Methodologies and Practical Approaches,” revealing its forecasts for digital transformation in 2019, based on the firm’s work with global banks and insurance companies.

Private banks and digital transformation

One of the major themes of Synechron’s report is the adoption of API into an organisation’s infrastructure, something a bank like DBS has been successful in doing over the last year.

This is born out of the necessity to keep up with groundbreaking fintechs and traditional technology companies like Amazon, the report says, and that a bank’s existing digital platform will require an injection of data sources from the Internet of Things (IoT).

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Synechron’s CEO Faisal Husain says, “2019 will really push forward the future of financial services and see immense change take place. We expect that this year will see the start of ecosystems that bring together some key technologies that aim to provide more effective methods of engaging with customers.”

Tony Clark added: “For private banking and wealth management firms, the biggest challenge is overcoming operational inertia towards digital transformation, in that they contain a large amount of legacy infrastructure and outdated ways of working,”

How a private bank or wealth manager offsets digital transformation with the need for traditional relationship management is one of the key themes in the industry at the start of 2019.

Clark tells PBI that their clients are “taking this in their stride, and 2019 is showing some promising results for digital transformation.”