Private banking is the banking and other financial services offered by banks to high-net-worth individuals with substantial assets or high levels of income. The term “private” is used to refer to customer service provided on a more personal basis, usually through dedicated bank advisors. It is a specialised banking service that caters to well-off individuals and families. Private bankers assist customers to manage their wealth by offering advice and services that are tailored to their financial objectives and investment profiles.
Private bankers are embracing the trend toward fintech and the face-to-face approach to sales is becoming less common. According to Hein van der Loo, head of strategy and business development at ABN Amro Private banking International, “Wealth management is now a fast-changing industry. Technological innovations… and new generations of clients need a different approach to private banking.”
Private Banks typically deploy fintech in the customer experience arena. There are at least four areas where fintech is helping to change private banking.
First, private bankers invest in digital platforms along with other information technology resources that Improves economies of scale and offer premium content in the form of data analytics and statistics. The technology enables them to meet the needs of their customers.
Citi Private Bank, which deals exclusively with wealthy individuals or families with over $25m, has a digital service known as In View. The service provides “customers with a comprehensive snapshot of their wealth in one place, providing clients and bankers a world of data at their fingertips’, according to their website. In addition, Citi Private Bank In View allows clients to access the bank’s latest thinking for the economy and financial market. Besides strategic recommendation, In View also offer customers the view of the bank managers on some of Citi Research’s top thought leadership publications and the market.
Second, fintech helps in improving connectivity in the global market. Information technology systems help private bankers to innovate and cut a niche for themselves in terms of products and services in a very competitive industry.
Wealth managers and private banks engage with fintech that can offer the right technology solutions for their customers. That explains why more and more private bankers are investing in mobile apps. In the UK, private banks such C. Hoare & Co and those managed by Credit Suisse and Kleinwort Benson launched mobile-based apps for their wealth clients.
Lastly, fintech help clients navigate regulatory requirements and complex risk through digital platforms. Regulation and risk have become too complex in recent times that utilizing digital tools are recommended whether it’s assisting compliance officers sort out new rules or upholding a compliance culture within the organization.
In conclusion, although many old-fashioned bankers will perhaps prefer face-to-face above digital interaction channels, clients now want to access many services online. They want to save time and money meeting with their private bankers. Therefore, private banks have to adapt to a new generation of customers who are using websites and mobile app for financial matters or face missing out.