Technology in the private banking business model will continue to act as an enabler and a cost saver, but it will not replace the essence of the human relationship. We believe that private banking has, and always will be, a people-to-people based industry.
We hold firmly to this belief because establishing an emotional connection with our clients is undoubtedly one of the important prerequisites for enabling them to trust us with their wealth. Beyond risk profiling and other elements that can be fed into an algorithmic model, there are certain aspects of the relationship we build with our clients that cannot be technology-driven. Softer matters emanating from a client’s connection to his or her community, culture, values and beliefs, need to be understood, internalised and brought by humans into the service of a human connection with the client.
Having said that, in the advisory space, technology can be used to comb through data, sift through market analyses, and compile information that helps to efficiently construct portfolios according to a pre-defined optimal securities selection strategy. Technology has a critical role to play in these and other areas. This is good news for the clients we service because they will benefit from faster data processing and more informative performance reporting, one that aspires to be free of human error. It is also a benefit for the private banks and wealth management firms because it can reduce costs and improve the delivery of service.
Some suggest that as the new generation, or the so-called millennials, become the private banking clients of the future, they would want to see their wealth being managed through a pure-play artificial intelligence platform. But recent reports by various consultants found that most millennials would still want to seek financial advice from a human relationship manager.
Research concluded that client preferences are indeed shifting towards hybrid wealth management models – a combination of human and digital capabilities. However, they are not abandoning human advisors to whom they can turn for guidance in various situations. For example, when considering new investment ideas, private banking clients would be expected to seek emotional validation of the decisions they make, suggesting that making an advisor available on an as-needed basis is essential.
This is why we find it vital to ensure that our relationship managers are equipped with the best technology to help them with their day-to-day tasks, are well plugged into market developments and have a very dedicated and trusting relationship with their clients. In our eyes, private banking will still be a relationship-driven industry for many more years to come.