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BANKING AND WEALTH MANAGEMENT: HOW TO WIN THE BEST OF BOTH WORLDS

Ban­king and Wealth Manage­ment have always been – and still are – cru­cial pil­lars of the who­le of the finan­cial ser­vices indus­try, evol­ving hand in hand with inter­na­tio­nal eco­no­mic growth and wealth.

With Covid-19 domi­na­ting the glo­bal nar­ra­ti­ve, play­ers of the finan­cial ser­vices indus­try have learnt to look at the posi­ti­ves. After all, the pan­de­mic hel­ped to pro­ve the com­bi­na­ti­on of agi­li­ty and inno­va­ti­on can effec­tively be a game chan­ger. The speed at which finan­cial ser­vices indus­try trans­for­med to meet their cli­ents throughout the pan­de­mic seems to be the speed at which it aims to con­ti­nue ope­ra­ting. This requi­res a cul­tu­re of proac­ti­ve chan­ge that is typi­cal of a tech­no­lo­gy-for­ward institution.

Pushing AI at the heart 

Up until recent­ly the ban­king indus­try has bene­fi­ted from well-estab­lis­hed busi­ness models. The real dif­fe­ren­tia­tor was the so-cal­led “effi­cacy fac­tor”: if it works pro­per­ly, then it is fine to stick to it.

Howe­ver, in the past mon­ths of the pan­de­mic, all indus­tries were put to the very test that goes under the name of — sud­den – digi­ta­li­sa­ti­on. Nota­b­ly, the­re has been a dra­ma­tic incre­a­se in the adop­ti­on of online and mobi­le ban­king chan­nels across countries.

The rise of digi­tal eco­sys­tems trans­for­med the way cus­to­mers eva­lua­te ser­vices and what they expect from ser­vice pro­vi­ders, par­ti­cu­lar­ly when sur­roun­ded by com­pa­nies con­ti­nuous­ly rai­sing the bar on per­so­na­li­sa­ti­on, anti­ci­pa­ting cus­to­mers’ needs befo­re the cus­to­mer is awa­re of them and offe­ring high­ly-tailo­red ser­vices exact­ly when they need it and though the righ­test channel.

Appar­ent­ly, we are cur­r­ent­ly migra­ting towards a holisti­cal­ly-AI-powe­red digi­tal era, rethin­king how to par­ti­ci­pa­te in the digi­tal landscape.

It’s not all mar­ket trends though. Inde­ed, AI tech­no­lo­gy can suc­cess­ful­ly impro­ve banks’ capa­bi­li­ties in the long-run and achie­ve the fol­lowing key results:

  • Boos­ting reve­nues via high­ly per­so­na­li­sed ser­vices pro­vi­ded to customers.
  • Lowe­ring cos­ts through effi­ci­en­ci­es gene­ra­ted by hig­her auto­ma­ti­on, redu­ced error rates and bet­ter resour­ce utilisation.
  • Unco­vering new oppor­tu­nities based on an impro­ved agi­li­ty of processes.
  • Genera­ting insights from a wide collec­tion of data

In other words, the ide­al­ly AI-first bank will offer ser­vices and expe­ri­ence that are hyper-per­so­na­li­sed and tru­ly omnichannel.

What does the future hold? 

Digi­tal trans­for­ma­ti­on will not halt over­night, and as it shapes the future of indus­tries world­wi­de, it will be gra­du­al­ly blur­ring tra­di­tio­nal bounda­ries in finan­cial ser­vices. Nowa­days, cli­ents tend to view ban­king and wealth manage­ment as two hal­ves of the same expe­ri­ence or rather two con­sti­tu­ent fac­tors of the same finan­cial eco­sys­tem. Loo­king ahead, they will expect to get all their finan­cial needs met in one place.

As Gart­ner says, finan­cial ser­vices insti­tu­ti­ons under­stand that exis­ting cli­ent-facing tech­no­lo­gies are not mee­ting cli­ent expec­ta­ti­ons or sup­por­ting digi­tal trans­for­ma­ti­on. Bank CIOs must deter­mi­ne whe­ther or not wealth capa­bi­li­ties are sup­por­ted by their cur­rent Core Ban­king Sys­tem and align with LOB (line of busi­ness) requi­re­ments (Gart­ner, 2020 Banker’s Gui­de to Advi­sor-Sup­por­ting Wealth Manage­ment Capa­bi­li­ties in Core Ban­king Systems).

Euro­pean Wealth, Asset Mana­gers & Banks are acce­le­ra­ting their digi­tal trans­for­ma­ti­on initia­ti­ves to offer incre­a­singly per­so­na­li­sed, seam­less jour­neys across all ban­king chan­nels and wit­hin part­ner eco­sys­tems; to for­ge stron­ger, deeper cus­to­mer rela­ti­ons­hips, achie­ve hig­her levels of growth and pro­fi­ta­bi­li­ty, and deli­ver supe­ri­or client/user experiences.

To remain com­pe­ti­ti­ve, a con­sis­tent user expe­ri­ence must ari­se from ful­ly-inte­gra­ted ser­vice, lea­ding from the front-end to the Core Ban­king Sys­tem whe­re the pro­ces­sing takes place. The­se end-to-end pro­ces­ses are only via­ble with a seam­less con­nec­tion from the front-end to the cloud-rea­dy Core Ban­king Plat­form based on an open architecture.

From banks to wealth and asset mana­gers to fin­tech, 2021 and bey­ond are likely to be years of pro­found trans­for­ma­ti­on to find new ways of working tog­e­ther to crea­te a safer, more inclu­si­ve and equi­ta­ble finan­cial market.