As clients demand more assurance, information and advice from wealth managers, bank executives are being challenged by the pandemic to provide a broader suite of solutions that integrates investment management, trust services and planning advice in one holistic package.
It’s clear among business continuity experts that the best way to prepare for a disaster is by gaming out scenarios in advance. After months of disruption, though, COVID-19 still offers surprises to clients and institutions. The result: “Poor client experience” primarily from substandard digital offerings appears to be slowing asset growth in the bank wealth channel, according to Cerulli’s 2020 Report on U.S. Private Banks & Trust Companies.1
“Many banks have not veered far from their legacy trust-centric business models,” Cerulli said. “Banks are often viewed as lacking the necessary technology and digital tools compared to their competitors.” One bank executive admitted as much to Cerulli, “We currently have a disparate technology stack; there are so many differences between the trust and brokerage technology systems that cause pain points from onboarding to the investment process.” In the aggregate, “bank advisors report that they control just less than half of clients’ total wallet-share,” the report said.
Clients, however, seem to be willing to meet their advisors halfway and conduct business as long as it’s from a safe digital distance. The report warned that many financial institutions are simply not keeping up: “Even now many banks are still lacking adequate technology capabilities and will likely fall behind if they don’t make the proper investments.”
As bank executives know they “need to improve,” the Cerulli report shows that they generally agree upon which areas come first:
- Better client experience: Sixty percent called “digital capabilities to improve client experience” very important. Highly configurable software tools and a la carte outsourced services let banks control what to insource and outsource. This can be particularly critical when the goal is to deliver a superior level of team-based client service.
- Technology adoption: Seventy three percent cited “gaining greater efficiencies through tech adoption” as their top priority. Having the scale and security to easily support hundreds of thousands of households, investors and accounts would also help them accommodate greater growth tomorrow.
- Compliance requirements: Seventy percent termed managing compliance and regulatory requirements a major priority. With upgraded tech tools, implementing effective and efficient compliance workflows and alerts can be optimized and better communicated across the enterprise where needed.
The bottom line
Acknowledging the importance of “greater technology adoption” is good. Active – and strategic – implementation to meet the needs of advisors and clients is better. Why not personalize their experiences though the single, integrated, holistic platform they need – before your competitors do?
Beyond the inadequacy of their legacy systems, bank executives also cited “inadequate support staff” and lack of “time to implement” solutions as other major obstacles to successful technology adoption. Fortunately, solutions like the VestmarkONE® platform offer an intuitive, robust way to create new levels of operational efficiency, enabling redeployment of resources. To discover more about modernizing your wealth management business to scale through the COVID Era, see our latest paper A Bank Wealth Management Executive’s Guide to Platform Technology Strategy in the 2020s.
1 The Cerulli Report U.S. Private Banks & Trust Companies 2020 Unifying the Wealth Management Experience P.50, P.103
By Lauren Yeaton Hunt, VP, Product Marketing