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Hyper-personalisation is “the greatest opportunity ahead” for the WM industry: InvestCloud

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Powered by increasingly advanced analytical tools and a growing pool of client data, personalisation will not resemble what it was in the early days of private banking in Asia. Fintech provider InvestCloud argues that the latest trend towards “hyper-personalisation” presents immense opportunities for the industry.

“Personalisation has been a major pillar of private banking,” observed Laksh Gangwani, regional director – ASEAN at InvestCloud. “Now banks are compelled to answer the question of how this moves forward in a digital-first model.”

Today’s PB clients are bombarded with information, in part fuelled by the proliferation of digitalisation. But Gangwani emphasised what clients expect from digital platforms is “targeted and timely advice” on top of the flexibility afforded by these platforms.

He pointed out that banks already possess concrete data on clients’ personal preferences, investment portfolios, and risk profiles. The potential lies in the combination of such data with the use of artificial intelligence and machine learning to offer a truly personalised digital client journey.

As a result, “all the noise (will be) gone, so the clients know whenever their device pings, it will be actionable advice”.

There are wider implications for the scalability of such a business. The case for delivering a hyper-personalised banking experience through “a combination of personalised service by the RM and a frictionless offering via digital platforms”, said Gangwani, is “most certainly” the case for the mass affluent segment.

HSBC rolled out a digital advisory solution for its Jade clients who are professional investors, an attempt by the bank to migrate private banking offerings to emerging HNW clients. Similarly, Standard Chartered told Asian Private Banker last month that the bank is developing tech-led discretionary portfolio management (DPM) solutions for its Priority Private and Priority Banking clients.

Wishes vs reality
There is no question that the region’s private banks have been upping their game in the development of their data analytics capabilities — Asian Private Banker‘s 2020 COO survey discovered that the pandemic significantly accelerated the use of data analytics in areas such as distributing investment research content and client prospecting.

Compressed margins and a shortage in headcount are still strongly felt across Asia’s PBs. They will likely count on effective data analytics to boost RM productivity, according to consultancy Oliver Wyman.

Despite high hopes that data analytics can open doors for PBs to new ways of engaging clients, the gap “between wish and reality” is still glaring. According to an Avaloq report published in early 2021, wealth managers on average only use around 35% of their available data.

Gangwani contended that private banks will have to rely on big tech platforms to successfully use cases of hyper-personalisation through data analytics.

“The next generation of clients (…) are also beginning to benchmark their private banking experience with their user experience on the big tech platforms,” he noted. “In other words, the big techs are increasingly defining the narrative of client experience and the banks are doing a little bit of catching up in that area”

He said that more banks are looking at digital transformation from a “client journey perspective”, rather than at individual systems or transformation for the front, middle, and back office.

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