The wealth management and private banking sectors have long been known for their highly personalised services. Now there’s a new trend in these old-school sectors, as more and more managers roll out advanced mobile banking and wealth management apps. These allow investors to not only check accounts as they would with ‘regular’ retail banking, but also handle investments, keep an eye on market developments, and hold video conferences with their advisors.
Mobile banking is revolutionising emerging markets as it ensures financial management and swift transactions for millions of previously unbanked peoples. In developed markets, apps are quickly changing the face of traditional banking, eliminating branches and personal service centres one at a time. In the UK alone, mobile banking app use for customers at the five major banking groups almost doubled in the past year. According to the BBA, UK customers now make 5.7 million transactions a day using smartphones and other mobile devices.
So far, the revolution has been driven by retail, allowing people to use mobile banking for day-to-day transactions such as checking their balance, paying bills, and taking out loans, whenever they want. However, private banks are now launching specific apps for wealthier clients, who usually receive a more personalised, advised service.
Clients want mobile
“The world today is becoming more mobile in its use of technology and it’s an accelerating trend,” says Andy Mattocks, Head of Corporate Development at the private banking group Arbuthnot Latham. “Within financial services, retail banking clients almost take online and mobile banking for granted, and whilst we don’t want to compete with that, we wanted to give our clients a choice of ways to interact with us. It supports the private banking relationship and service from our perspective.”
Wealth managers and private bankers have a long way to go to realise the full potential of mobile apps
The firm launched its mobile banking app for private clients in January, after consulting clients on the design and delivery of the application.
“Its been received incredibly well,” says Mattocks. “We deliberately took the opportunity to speak to existing and prospective clients on their needs before launching the mobile app, which happened in conjunction with a new online banking platform. About 25 percent of our online banking users use the app. Considering that this is since January alone, we believe that clients have taken it up because they are actively using it and value it.”
The industry has now reached a stage where it is the norm for a wealth manager or private bank to have at least one mobile app for client use. Some of the world’s leading universal banks already have impressive portfolios of mobile apps for wealthy clients. The trend is largely driven by the clients themselves who want to access their wealth and investments at all hours of the day.
“It is very noticeable that this is a consumer-led revolution,” says Robert Watts, Media Relations Director at the British Bankers’ Association (BBA). “Mobile banking is tremendously convenient, straightforward to use and, crucially, it’s extremely popular with the clients. Banks have been surprised at how intense the take-up of mobile banking has been – it’s happened a lot faster than expected. We’ve actually found that the amount of users on mobile banking has doubled from 2012 to 2013, and from what we can understand from our members, we’ll be seeing similar growth in 2014.”
Major players such as Credit Suisse, Société Générale, ABN AMRO, JP Morgan and Deutsche Bank have some of the most popular apps, having invested heavily. According to research from MyPrivateBanking, it is possible to characterise a general mobile approach for wealth managers, but it is clear wealthy clients need to be treated as a separate and privileged client segment when developing this technology. Core features must help them evaluate, analyse and understand their investments, the report says, in addition to providing a lot of specific content for HNW clients (including product information, and client magazines or publications for sub-segments such as women or entrepreneurs). These apps need to be integrated with other online and offline media and prompt live interactions with the user’s personal advisor.
Mobile private banking apps differ from retail banking apps in that they don’t only provide access to accounts and enable transfers, but also portfolio analysis, brokerage services and real-time market data – on top of wealth management advice. The private banking apps are more complex and cater to consumer needs in a way unseen until now, says the BBA.
“Mobile banking is a tangible and strong example of banks innovating for their customers,” says Watts. “Banks are competing with each other like never before, in order to have the best banking app out there and gain customers. Essentially, the innovation we’re seeing when it comes to mobile banking is driven by a hardy competition for customers.”
Targeted apps for the wealthy
However, only a handful of banks already have apps in place that are targeted at wealthy clients. There is a lack of integration between the apps and banks’ social media presence, which would give the apps a broader relevance. According to several reports on the mobile banking industry, this lack of integration prevents customers understanding the app better and gives an overall sense of lacking customer service.
Wealth managers and private bankers have a long way to go to realise the full potential of mobile apps. Improvements are most needed when it comes to coverage for Android devices, as most firms have focused on iPhone and iPad applications. Considering that app downloads for Android amounted to 58 percent of smartphone app downloads in 2013, and iOS only accounted for 33 percent, this represents a serious under-allocation of resources.
In addition, MyPrivateBanking says too many wealth managers and private banks are failing to provide the full range of core functions that wealthy clients could reasonably expect to find in their financial apps. When it comes to support and communication features, the average firm is meeting some basic requirements but is failing to provide a level of functionality or service that matches the needs or desires of their customers.
However, there’s a good reason private banking apps shouldn’t offer all the services normally provided by their adviser, says Mattocks: “The functionality of retail and private banking apps is really similar, but the way we do banking, whether online or mobile, is about positioning that service as part of the overall core relationship. There are many banks out there that only want to be technology, but we’re relationship-led.”
Consequently, Arbuthnot Latham’s private banking app offers a suite of account and transactions services, but is considered a supplement for advice, which, in the firm’s words, requires the intellectual capital of people. The firm primarily uses the app as a mechanism for communication – something other private banks are grossly lacking.
Notably, only half of financial institutions have taken the time to explain security measures enabled within a mobile private banking app. With a lot of money to lose, this is a cause for concern for many high-net-worth individuals, who have been sceptical of using apps that may not present a stringent security policy.
The private banking industry needs to focus on communication and marketing when it comes to its technological endeavours. That way, they will ensure clients know they’re getting the same personalised, secure and high-priority service they’ve grown accustomed to. And in this respect, it can’t hurt to ask those all-important clients: what it is they expect from their bank in a mobile age.
