As ‘next generation’ inherits the nation’s wealth, banks stand to boost share of wallet with efficient digital offerings
Capco, a global business and technology consultancy dedicated solely to the financial services industry, has outlined the digital challenges ahead for wealth management firms with regards to the ‘wealth transfer time bomb’ in its new whitepaper, ‘Digital Services in Wealth Management’. The paper outlines the digital demands next generation customers will present as they inherit the current population’s wealth in just a few years. As customer demands continue to evolve and 21st century wealth management makes this demographic shift, banks will be forced to develop a broader set of digital offerings in order to prosper.
Peter Lewis, Partner at Capco said, “The wealth transfer time bomb is a widely predicted wave of client activity. Digitally savvy recipients of inherited wealth will bring a new level of consumer demand for around-the-clock, real-time mobile, tablet and online banking services. Delivering effective and attractive digital solutions to this new demographic of customer will be essential for financial institutions. Without a comprehensive digital offering, they risk losing customers and significant revenue to competitors.”
Financial institutions are already finding it hard to meet the ‘on demand’ requirements of generation Y. An inferior digital experience will push these new digitally weaned clients away as they re-evaluate their wealth services in favour of online and mobile platforms which exceed the expectations of these busy, demand-rich customers. Real-time, accurate information is a must as is ensuring that the rich dialogue between advisors and clients is not lost.
The operational challenges of addressing these expectations are substantial. Removing siloes across the institution to provide up-to-date data has structure and service implications for financial institutions. Client portals must also deliver a rich, high fidelity user experience rather than just offering technology for its own sake.
Nick Levy, Managing Principal at Capco added, “The future success of wealth managers will partly be governed by their ability to meet consumer’s digital requirements. Banks must reposition themselves in line with customer expectations, define their digital strategies and put in place roadmaps to prepare for the generational shift ahead. The challenges here are significant, but so are the opportunities. Looking ahead, the crucial concern for banks should be delivering a platform which meets client demand and provides an engaging consumer experience in line with the banks’ offline wealth offerings.”