For Private banking and wealth management firms, there are 3 distinct and sustainable advantages, which will be seen firm wide. They are as follows:
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1. Digitsation can create added value to the services already being offered and in turn spike up sales. Wealth Management firms and Private Banks are becoming increasingly aware of the fact that many of their clients are spending an ever increasing amount of time online mainly on social networks such as Facebook and Linkdin. So now it is it time to follow the old saying ''be where your customers are''. In recent times banks have created new apps and developed technology in a more innovative way to make them appear more customer-centric and modern. Social media also has provided more ways to interact with customers, encouraging better relationships resulting in an increase in transactions and networking. An out come of this is Wealth Management firms and Private Banks have the ability to offer new products to their existing customers whilst drawing in more new clients. Apps have allowed Wealth Management firms and Private Banks to provide new investment opportunities and provide better and more coherent understanding of risk whilst also being able to convey this to the client without boring them to death with spreadsheets. Instead aesthetically pleasing digital dashboards have been created giving the customer a better view of their investment.
Advantages of digitisation for WMPB - Source from PWC
2. Digitisation can cut operating costs for Wealth Management firms and Private Banks, they should use and develop innovative technology which can allow greater efficiency, standardisation and automation of processes. Technology has been used to lower costs and improve efficiency for years now by firms and people in general, for example how much more time efficient is driving a car that riding a horse? Imagine if all deliveries where made by horse drawn carriages rather than lorries. Digitisation is just one of the latest trends in technological change, Wealth Management firms and Private Banks must be innovative but effective and apply these technologies within and outside the business. Internally Wealth Management firms and Private Banks can be more efficient at communicating with their wealth and investment managers as well as having a more direct and instantaneous connection to the markets they trade on. Online trading platforms have enabled companies to increase their operating efficiency, instead of calling up to make an order for a stock or share they instead can make the transaction instantaneously through a click of a button. Externally, CRM (client relationship management) technology has allowed more effective communication with customers which allows greater flexibility and effectiveness in client retention and on boarding. Risk management tools have cut down the amount of risk involved in trading and also the time taken to calculate this manually saving wealth managers time to do what they are best at. This better uses of managers and other staff time increases operating efficiency but also cuts cost as less staff are needed because time consuming task have been automated.
3. Digitisation allows for greater compliance and risk management functions through automation. Regulation over the last few years since the 2008 crash has been a hot topic with regulatory requirements growing more and more tough. This means that the middle office has to make compliance checks regularly and efficiently with out automation this would be near on impossible due to the time consuming nature of risk and compliance checks. Digitisation has allowed for automated checks on risk and produced early warning systems for portfolio monitoring, client and companies defaulting on credit whilst keeping in track with reputational risks with in the market. Therefor digitalisation of the middle office can aid in the management of compliance and risk, intern cutting costs and managing client and company wide risk
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Sky Shorts Financial
“Virtual currencies, perhaps most notably Bitcoin, have captured the imagination of some, struck fear among others, and confused the heck out of the rest of us.” – Thomas Carper, US-Senator
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