We often observe that large financial firms operate on separated systems to serve their retail and wealth management clients. This lack of integration is increasingly disruptive to the relationship management experience, as it significantly impedes growth and limits the wealth managers service to investors.
Wealthy investors use credit cards, make payments, and take out mortgages. In fact, affluent, high net worth and even ultra-high net worth investors share the same needs as retail customers. Delivering these services effectively means that client data needs to be duplicated in a bank’s wealth management and retail customer relationship management (CRM) software - meaning that client data is held in two separate systems to fulfil a wealthy investor’s financial needs. This not only complicates the advisor’s life, increasing the cost of onboarding, but also the investors' experience, due to the additional data capture, requirements, and login processes. This is also true for a retail customer whose assets are increasing. At some point, they must be ‘handed over’ to a financial firm’s wealth management division to receive the relevant financial advice. This stage is often facilitated by internal incentives, potentially resulting in a break in coverage of the client at a crucial - and likely stressful - point in their relationship with the bank. The failure to merge retail and wealth management services clearly comes at a high cost. It is not only inefficient, it does not support the financial progress of a retail or affluent client who wishes to increase AuM with the support of their bank’s services.
Shifting client expectations requires bridging the data divide
Wealthy client expectations are also shifting toward the kind of convenience and user-friendliness that consumer industries are accustomed to. Digital natives of all client segments are tech savvy and expect financial information to be available in the palm of their hand as seamlessly as possible. Financial advisors need to meet with clients on their terms and provide an element of freedom around certain transactions themselves. Self-service tools take on greater importance by enabling clients to complete tasks quickly and interact with advisory personnel in flexible formats through social messaging and other digital channels. Such tools support advisors through augmented and natural language processing capabilities, artificial intelligence, and machine learning. However, such technology cannot operate on scattered core systems with separated platforms for client segments. If solutions to respond to these client needs are implemented in an unintegrated platform environment, the result is a fragmented user experience for clients, advisors, or both.
Cases for successfully bridging the data divide
Avaloq has extensive experience across APAC and Europe to address the limited or inexistent integration of retail and wealth management systems. Without disclosing sensitive information, we have provided examples of three cases below.
1. Delivering advice to a new generation of investors in Singapore
A major bank in Singapore needed to increase their offering to address a younger generation, which had recently started accumulating greater wealth. The integration of retail and wealth management services was quickly identified as a key factor to delivering seamless, high-class service and advice for the end client. The solution involved the integration of Avaloq’s fourth-generation Core Banking Platform. Through the integration, wealth management clients now have access to retail services, such as drawing a mortgage, without reaching out to the retail arm of the bank. Their financial advisors also benefit by being able to keep track of their clients’ overarching wealth portfolio and basic needs in a single workplace.
2. Scaling the investment product offering in Southeast Asia
Another Southeast Asian bank, having relied heavily on legacy infrastructure to offer its products and services over the past decade, identified a major bottleneck in their systems, restricting business growth. They realized that purchasing a new system to provide new product types would only add to their already segregated infrastructure and exacerbate operational inefficiencies. Avaloq advised the bank to revamp its operational view across all client segments. It helped the firm adopt an upgraded retail core to complement the Avaloq Wealth platform. The new “combined” operating model enhanced scalability in terms of range of products and service offerings. Time-to-market for new products was notably shortened and cross-selling across segments rose significantly. The bank can now easily identify high-value clients in each segment and offer them upgraded services.
3. Bridging best in class self-service client experience with advisory in the UK
To address the client desire to have the choice of their preferred channels, Avaloq helped another European private bank ensure that payments, trades and other transactions can be executed online through mobile apps by clients themselves, with on demand access to the advisory team. The bank required a combination of flexible transactional end-user interface software, an ecosystem of third-party specialist providers and robust integration capabilities that enable the various components to communicate with each other in real time. Avaloq orchestrated the different self-service and advisory elements into a seamless client experience for wealth management clients.
Bridging the data divide correctly
Avaloq’s experience with numerous global financial firms has made it clear that the best way to increase internal efficiency and client engagement is by establishing a unique source of client data. This provides a solid foundation for organizations to innovate quickly and ramp up digital client channels (mobile, web banking), enabling efficient client management and greater overall client satisfaction.
Written by Pascal Wengi
Pascal Wengi joined Avaloq in 2020 as Head of Sales for the Greater China region. Based in Hong Kong, his new role as Managing Director has been expanded in 2021 to cover the entire North Asia region. As part of Avaloq’s Client Success & Sales organization, Pascal and his team are going to build on strong existing client relationships and aim to grow the Swiss-based company’s strategic footprint in the Asia Pacific region.
Learn more about:
The four megatrends and what they mean for the financial industry
How innovation, industrialization and individualization are key to mitigating structural margin pressure
How the shift of wealth to a new generation will shape client needs
Why the affluent segment poses a significant business opportunity for wealth managers
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