The ability to use digital channels to get a clearer idea of what clients want is helping the private banking and wealth industry to become more efficient and productive, but there are no easy wins to getting strategy right, a London conference has heard.
These were some of the ideas on show at a panel held at the WealthBriefing Operational Strategy Summit, at Gibson Hall, in the City of London. The event, organised by the publisher of this news service, was sponsored by ProFundCom, Appway; Advent, SIX Financial Information and KPMG.
Speakers at the fourth panel were Jean-Pierre Flais, chief operating officer, Societe Generale Private Banking; Gillian King; head of operations and change, Duncan Lawrie; Joe Norburn, managing director, head of digital and front-office solutions, Coutts; Jeremy Oakley, director, the Strategy Group, KPMG, and Michelle Owen, managing director and COO, Barclays. The panel was chaired by Bruce Weatherill, CEO of Weatherill Consulting.
“The client experience has to be at the front and centre of everything that you do,” Coutts’ Norburn told the conference. Technology can help in making this happen, he said.
He said the wealth management industry should look at other sectors for inspiration and experience, such as the luxury goods area. Older, more traditional firms understand tech. “The digital expectations of our clients are being shaped by their experiences beyond financial services. We must look to other sectors, especially other luxury brands, to benchmark what we do and to draw inspiration,” he said.
Asked by the audience if firms preferred to focus their tech budget on compliance or client experience, Norburn said that in practice firms tried to do both things. There is a problem in that the pressure to spend on compliance created an opportunity cost for firms, he said.
“There are opportunities to do both [compliance/client experience work] but you cannot be cute about it. “You do have smart, forward-thinking people in the compliance side who can understand the client experience side of things too,” he said.
The question was put as to whether the Financial Conduct Authority, the UK financial regulator, was encouraging the right balance in terms of firms spending money on compliance and improving the client experience.
KPMG’s Oakley, said: “The FCA is going in the right direction and realises that clients must be at the centre of business models.” He continued: “The dividing line between doing things that are right for the client and compliant doesn’t really exist anymore.”
Asked if the wealth industry was becoming too risk averse, Jeremy Oakley said: “Yes, there is a lot of that.”
“Some firms are so concerned with keeping the shop open that they are not taking any risks. We are hopefully emerging now from that,” he said. Firms must be willing to make some mistakes since this is how people learn. “I am quite optimistic that we are emerging from the straightjacket of risk aversion,” he said.
Barclays’ Owen described how her bank has been through an intensive series of transformations, such as its “Project Gamma” programme, with the effect of increasing the use of technology and making the business more efficient. Many of its private bankers and other staff are now far more “tech savvy”.
“We probably have the most tech-savvy Wealth board members ever at Barclays with an abundance of digital experience. We also have a client experience member on the board,” she said. She went on to say that this is still relatively unusual.
Finally, Societe-Generale’s Jean-Pierre Flais talked about some of the generational aspects of digital technology in private banking.
“In order to ensure that the views and ideas of younger people are properly reflected (in particular on subjects like digitalisation), Société Generale Private Banking has decided to set up a `transformation council’ made up of around 30 people coming from all the entities and directly reporting to the executive committee. This enables them to look through the organisation and is also a way to identify/attract talents,” he said.
“Feedback from clients is that they expect improvements in account opening and credit processes, so investing in risk/compliance and clients are not contradictory [tasks],” he added.
Gillian King of Duncan Lawrie, referred to a British Bankers Association research report undertaken about two years ago to see if there were client experience people at the board level at wealth management firms and it was found that there were no such people. The report said that only 54 per cent of those surveyed thought their wealth manager was client-centric.
King referred to a comment from Peter Hargreaves of Hargreaves Lansdown to the effect that a client experience person was not necessary on a board in a firm where everyone, if they were doing their job properly, was close to what the client wanted. She also mentioned how it was good for 20-somethings to tell the “fuddy-duddies” on a board to embrace a digital strategy. “That is a good thing,” she said.
Sometimes it can be easier to change a culture in a smaller firm than a larger one; on the other hand, in small firms, where some staff had been in place for a long time, it can be harder for them to adjust, she added.