wealth management digital [email protected] lower cost income ratio more...
TRANSCRIPT
Valery Lepinette , ESSEC-MANNHEIM executive MBA 14
Wealth management
digital transformation
A business model concept ...............................................................................................................slide 3
From traditional to digitally enabled model
FinTech market today ……………………………………………………………………………………...slide 5
Many platforms & few hubs
FinTech focus on front & data driven strategies
Competitive position … customer value map today
Perceived performance & HNWI digital wealth desire
A growing FinTech market
Move up the perceived performance index or …
Positioning the model …………………………..………………………………………………………..slide 12
High-tech high-touch
Superior competitive advantage
Customer manifesto* … customer satisfaction KPI‘s
Differentiate or …exit
Product & service quality
24/7 high-tech hich-touch as a channel advantage
Customer acquisition & retention
Brand emotional link
Risks & mitigation ………………………………………………………………………………………...slide 21
Appendix ………………………………………………………………………………………………..…slide 22
Lower cost income ratio
More engagement and sales
Less administrative tasks for wealth advisors
Digital is a churn KPI for >50% of U/HNWI
Digital is key for new generation of wealth
A tool to answer customer needs
FinTech & GAFA competition
Re-think business model
Re-think client relations
Re-think operational process
Think real time & collaborative
Think big data & predictive analytics
From traditional to digitally enabled model
Why?
How?
FinTech focus on front-office & data driven strategies
FinTech
Front Office
Differentiation
Bank
Business lines back to front STP
(PB, e-banking,…)
Core platform
Front platform
Front applications
Middle Office
Back Office
Standardisation
BPO offers like?
Or other acc
sync offers
0
0,5
1
1,5
2
2,5
3
10 20 30 40 50 60 70 80
Fair Price Line
Fair Price Line
Inferior value
Superior value
% fee
Sliding fair price line
Bank
FinTech
Competitive position … customer value map today
Performance as In-person, phone, website, e-mail, mobile apps, video, social media
* Estimates and approximations based on wealth report 2014 stats on HNWI channel importance from in-person to social media
Perceived performance & HNWI digital wealth desire
HNWI
Digital
desire
% Today
% Future
Digital
interaction
In-person
interaction
Asia 72.5 82.3 Inform
Transact
Engage
Middle East +
Africa
56.1 73.6
Latin America 52.8 69.8
Europe 55.6 61.2 Inform
Transact
Engage
Japan 52.1 61.2
North
America
53.5 57.7 Inform
Transact
Engage
Global 56.7 64.2
*Wealth report 2014
A growing market
FinTech start up cost < US$20 million
Fidor Bank 70 000 clients
mBank (3rd largest in Poland)
WealthFront US$1 billion AUM
Betterment US$1 billion AUM
AUM /flat fees + data monetisation (50/50?)
0
0,5
1
1,5
2
2,5
3
30 40 50 60 70 80 90 100
Fair Price Line
Fair Price Line
Performance
% fee
Banks
FinTech
INFORM ENGAGE TRANSACTReal time Relevant
Collaborative
Moving up the perceived performance index or …
Y 2020 ?
* Assuming Fintech competition raises perceived performance index to 2014 level for banks
High-tech high-touch
Digital business model
Customer value proposition
Profit formula
Key resources & process
Higher turnover
More engagement
New data driven services
e-banking and other integrations
Answer client’s churn KPI
Trust & integrity
Innovation & performance
Convenient 24/7 & relevant
Integrated channel experience
Self servicing & real time
Solving complexity & simple
Potecting privacy & wealth
Cost, value for money
Professional advice
Lower cost income ratio
Back to front STP
Adding scaling potential
Lower client acquisition cost
Collaborative & real time
Data standardisation
Front applications
Premium mobile services
BI & CRM on tablette
24/7 Community management
24/7 Expert hubs
Trigger & content marketing
Brand & reputation
client centric
Superior competitive advantage
Customer satisfaction
Differentiation
Product & service quality
Brand emotional link
Digital *
drives company bottom-line
*Cap Gemini and MIT reports
Customer manifesto* … customer satisfaction KPI‘s
You look out for me and recognize me as a valued customer
I can easily find simple, clear product and service information
Whenever it‘s convenient for me, I can easily get trusted advice by phone, video or in the branch
I can apply for a product through one channel and seamlessly finish the transaction on another
I can buy the same products at the same price regardless of where I go
I can access all my accounts on any device
I can do most of my day to day banking through digital channels
I can make purchases, payments and transfers through my smartphone
My interactions are efficient, secure and fast with minimal paper
I can share feedback, including on social media platforms and my bank will quickly resolve the issue
*Bain & co report, Building the retail bank of the future 2014
Differentiate or …exit
UNMET
Social Media Transaction
DETERMINANTS
Mobile trading & analytics
Self servicing option
Data driven services
24/7 collaborative & expert hubs
Multi-channel & viral content
Integrated channel experience
Advisor’s BI & CRM on tablette
NECESSARY
Call center & online portal
Portfolio monitoring, watch lists, alerts
Market data &information delivery
Research content delivery
Exit risk for players
Migration 3 to 5 years
Trust
Reputation
Product
Online
Product & service range mobile apps
Channel advantage (In-person & hubs)
Service quality (high-touch & relevant )
Brand emotion (luxury)
BANK
Differentiation advantage
FINTECH
Cost advantage
« me too strategy »
using a new channel
Low variable cost
Product & service quality
Inform, engage and transaction type of services
Mass affluent HNWI UHNWI T
RA
NS
AC
TIO
N
• Self servicing transaction
• 1/3 party data driven partner transaction
• Advisors push transaction
IN
FO
RM
EN
GA
GE
• Inform & engage services (expert hubs …)
• Self servicing data driven analytics
• Collaborative services, social media
INF
OR
M E
NG
AG
E
• Tailored services to specific needs
• Hightech hightouch & luxury conciergerie services
BI & CRM « data factory » for marketing and advisors
Integrated multi-channel : in-person, web, email, phone, Apps, Video, Social Media
24/7 high-tech hich-touch as a channel advantage
Mass affluent
HNWI
UHNWI
Digital MarCom
24/7 Hubs
Front experts
24/7 Social Media
Advisors
Amazon « Mayday »
Real time tablette/video
Google « Help-out »
Real time tablette
/video& or recorded
webinars
Bank of America
Command center
Collaborative platforms
High-touch
In-person, phone
CRM & BI real time
web, email, apps, video
Customer acquisition & retention
HNWI
&
UHNWI
Wealth
Advisors
24/7
Community
Management
&
Experts Hubs
Mass Affluent
Prospects
E
N
G
A
G
E
M
E
N
T
+
+
+
Content marketing
Trigger marketing
Retention marketing
Self Servicing
Mobile Apps
Social Media
Face to Face
Marketing
A
C
Q
U
I
S
I
T
I
O
N
+
+
+
*adding pression marketing rules to avoid oversollicitation
* Cardlinkin or a proprietary service to develop privileged access to luxury brands partners
**FutureWealth report 2013 , ***Wealth report 2014 *New products not sold 100% digital channel
Brand emotional link
Inspire brand love
Improve client brand experience
Build digital identity, brand personality
Identify value drivers, client preferences
Refine client needs based segmentation
Consider non-digital showroom strategy*
Build brand ecosystem partnerships*
• Luxury cars 88% (BMW, Jaguar, Audi)
• Luxury retail 86% (Rolex, Cartier, Burbury)
• Luxury travel 82% (Singapore Airline)
• Banks 71% (St Chartered, UBS, HSBC, Citi)
Luxury brands love index**
• In-person /phone 52% 55%
• Website 53% 60%
• Email 51% 55%
• Mobile App 25% 46%
• Social media 17% 37%
• Video 19% 39%
Channel importance for HNWI above 40 years old and below 40 years ***
Risks & mitigation
Real time implications on organisation, staff resistance
to change and lack of vision
Change management project (expert hubs…)
EU data privacy, data security, business continuity ISO international norms 27017 & 27018
Organize cloud contract reversibility (end of contract)
Banking model loosing ownership of client data
Business design (use networks when possible to avoid
investing on duplication). Lobbying & public affairs
Not delivering relevant predictive analystics View product range under real time, collaborative prism
Organize collaborative innovation emergence
Failure to differentiate from Fintech and GAFA’s Marketing (social media command center, brand
emotion partnerships, product innovation, showroom
strategy, BAM strategy (Best Admired Mentor)
Technology change profitability Digital transformation should lower cost income ratio,
middle & back STP, data monetisation additional
revenues
Big data & cloud real cost impact on margins Contracts negociated take into account hidden costs
(integration, undercapacity, service usage
particularities)
Not going digital Not going digital is not an option
APPENDIX Wealth management industry trends
Commission fee based model under pressure
Advice fee based model is the focus
Scalability is becoming important
MIFID FACTA & RDR in UK increasing compliance cost and consolidation of actors
US model integration of bank + broker
Singapore HKG are central to HNWI business
More UHNWI opt for family office set up
Succession planning important in emerging countries
Experienced advisors are a scarce resource
60% of Chinese HNW self
manage or opt for family
APPENDIX Wealth management industry trends
Increased usage of social media platforms gathering speed
Churn KPI’ moving to digital capabilities of wealth managers
Middle and back office BPO business process outsourcing trend for mid sized players
Closed social media communities are developping along side greater client segmentation (Asset Base, Profession, Domicile, Source of Wealth…)
References
Building the retail bank of the future, 2014 Bain & company
World wealth report, transforming wealth management in the digital age 2014 Cap Gemini, RBC
Les Fintech canibalisent la banque 2014 Octo technology
Embracing digital technology: a new strategic imperative, Feb 2014 Cap Gemini
Mobile Apps for wealth management 2013 & 2014 MyPrivateBanking
Robo Advisors threats and opportunities 2014 MyPrivateBanking
US wealth management survey 2013 Booz&CO
Trends in the global wealth management industry, 2012 Cap Gemini
Reaching out to the high net worth 2012 Clearciew Financial Media & Coutts
Reinventing your business model 2008 HBR & Mc Kinsey
Articles & ppts from Finextra.com, MyPrivateBanking.com, Slideshare
FutureWealth report 2013 SEI, Scorpio partnership & Standard Chartered
IT expo 2014
G9+ conferences 2013, 2014
Contact
Valery LEPINETTE
Mobile (33) 06 43 33 78 91
Linkedin http://lnkd.in/dm7Euum
Website http://valerylepinette.wordpress.com/