19 Jul 2021Fabian Grande
Finding the sweet spot between human and digital advice

Discussing investments with clients is done differently now. Hybrid ways of managing wealth, which complement classic advisory with such innovations as conversational banking, are proliferating. The task for banks and wealth managers is to balance client demands for a rich, flexible, premium experience with the need to keep costs under control. This is where Avaloq, and specifically the Avaloq Engage App, an ideal tool for conversational banking, can help.

Investors decide for themselves

A hallmark of the digital revolution in financial services is the widespread access to information it has made possible. A key consequence of such access is how it has inspired investors worldwide to become more hands on with their wealth. A recent survey conducted by Avaloq in Europe and Asia-Pacific reveals how comprehensive this trend is.

Roughly three-quarters of the affluent and wealthier investors we surveyed, whether resident in the UK, Germany, France, or Switzerland, in India, China, Japan, or Australia, said they manage their own financial decisions (see figure 1). The percentages were markedly consistent across country.

Figure 1
(Response options not mutually exclusive, certain investors see themselves in control of their decisions, but still resort to a human or robo-advisor for support)

Interestingly, what varied is the percentage of respondents who stated that they use a financial advisor. These specialists, however, are being employed to assist investors with choosing among investment options. Most decisions are not being delegated entirely, as investors hire advisors to complement their decision-making process.

Mobile banking making inroads

While web banking is almost universally popular with investors, the demand for mobile and other advanced digital capabilities differs notably by country and region. Asians welcome them most: nearly 80% of respondents in China and 70% in India, for instance, consider a state-of-the-art mobile banking app essential (see figure 2). Interestingly, this desire for mobile ease and convenience does not lessen expectations for a highly personalized service. In most markets, investors want their bank to offer access to digital channels as well as individualized advice.

Figure 2

Beyond that, a full third of those surveyed in China, Singapore and Hong Kong regard conversational banking and the ability to use popular social messaging apps to communicate with their wealth manager as one of the most exciting capabilities to have in digital banking. While we don’t yet see the same level of enthusiasm for these services in Europe, Japan or Australia, as Western investors familiarize themselves with the new capabilities and come to appreciate their advantages, evidence is mounting of growing interest in them.

Adapting to digital disruption

This week’s fintech breakthrough will not be the last. Innovation in the financial services industry is here to stay. Banks and wealth managers, in our view, need to find the right balance between what technology and what talented staff can offer their clients to ensure long-term success. Robo-advisory is being integrated into traditional methods of managing wealth, and for good reason. It, along with artificial intelligence (AI) more broadly, can improve customer service, automate repetitive tasks and even provide personalized investment advice.

Figure 3

A clear majority of investors, according to our surveys and the observations of consultants (see figure 3), do not want to use an exclusively “robotic” service, though. They still appreciate the human component, especially in advice. Finding this sweet spot between human interaction and digitally based support for clients is the challenge banks face.

Enter conversational banking

The advantage of mobile banking is that clients can serve themselves whenever and wherever they choose. Conversational banking adds social messaging apps and their text, voice and rich formats to the mix so client requests can be handled in a conversational setting.

It offers wealth managers another avenue for interacting with existing clients and attracting new ones. The flexible conditions and expanded capabilities of the mobile web open up exciting opportunities for reaching clients where they live: online. AI-powered chatbots can jump in and answer common questions. Tailored content can be distributed quickly. Client-facing personnel become both more responsive and more efficient. Conversational banking can not only reduce costs but personalize interactions.

A hybrid wealth management solution of AI-supported client engagement by the advisor is likely to become the premium standard. The benefits of it are obvious: greater operational efficiency and a faster, richer client experience.

Advisory informed by millennial preferences

We envision most wealth managers developing a hybrid model that blends automation and digital availability with classic advisory. Digital natives are less keen on meeting in person than previous generations, a predilection that stems not merely from Covid restrictions. As they age and accrue more wealth they are likely to cling to ways of communicating that they are comfortable with, including through favored messaging services.

A solution like the Avaloq Engage App promotes easy, secure, compliant interaction between wealth managers and clients, whose requests can be filled on these channels without moving to other media. Its AI-based analytic tools and semantic language processing can help advisors respond efficiently to questions and increase client satisfaction.

Avaloq Engage App answers the conversational banking call

As a mobile workstation for wealth managers, the Avaloq Engage app opens up new forms of client service models. Avaloq Engage itself assists with client management via contact lists and document sharing. It integrates a virtual assistant that recommends actions. It personalizes content. As such, it can help wealth managers tap into new client segments. Services once reserved for high net worth clients can be offered to those in affluent segments to democratize wealth management, offering additional growth potential for banks.

Written by Fabian Grande
Fabian Grande leads the team behind the Avaloq Engage product line, which is designed to provide intuitive digital services and an outstanding user experience. Fabien joined Avaloq in February 2019 from Credit Suisse, where he was the Head of Design Thinking and Product Development. His focus at Avaloq is on digitalization initiatives in the front office and on compliance. He holds a degree in economics from the Zurich University of Applied Sciences and is a member of the Design Thinkers Academy.
Conversational Banking

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Learn more about:

  • The impact of social messaging on wealth management
  • How the convenience of social messaging raises the interaction with relationship managers (RM) to a new level
  • How to embed the RM's mobile endpoint on a social messaging app into a wealth management workplace in a secure and compliant manner
  • The seamless integration of natural language processing (NLP) and artificial intelligence (AI) in mobile conversation