Historically the wealth management industry has been slow to adopt new technology, with the quill pens depicted in marketing literature bearing a close resemblance to the back-office activities of many banks.
But increasingly institutions are being spurred to close the technological gap as the new generation of wealth comes into focus, and this is especially true in Asia.
While a traditional client had no time or interest in that “face page with my friends on it” [Facebook] or the “online bird messaging thing” [Twitter], the new generation of wealth expects to interact with their bank via the latest communication methods.
And there are signs that banks are beginning to get the message – even when limited to 140 characters – rather than dismissing these trends as unintelligible technobabble.
In PwC’s Asia Pacific private banking survey 2011, bankers indicated that they plan to shift to newer technologies in their interaction with clients over the next two years.
Most wealth managers have made the transition to having an online entity, but clients are expecting further content and increased interaction.
The largest change will be in enhancing web-based communication platforms that facilitate mobile and social media interactions. For inspiration, private banks can look to emulate retail consumer businesses such as Ikea and Nike, which are considered pioneers in this area.
Mobile integration and banking applications have already seen the greatest development, with some strong adoption rates for iPhone and iPad apps (something AsianInvestor itself can vouch for).
Yet while it seems private banks are coming to grips with mobile technology, they are still lagging in data management infrastructure. Cloud computing has been working its way to the foreground over the last five years, but is still a fairly alien concept within the financial sector.
Amazon, Netflix, Apple and Salesforce.com have all implemented cloud-based databases and distribution – moving data from physical servers onto “the cloud”, an online database hosted by numerous servers globally to reduce costs and potentially increase functionality and efficiency.
Financial providers are taking their time to adopt this approach, although State Street has recently taken the dive implementing cloud technology to make dynamic data and analysis tools available to their client in real time.
Adapting a cloud model to the wealth management segment will need to address regulatory and security concerns, but it will be worth it if it enhances the communication and service delivery options that the next generation of wealth is coming to expect.
But you can forgive bankers for wondering if there is room for human interaction in this brave new world. Unsurprisingly, they feel the key driver of communication in the next two years will still be “in person”, and by a healthy margin.