More Wealth, Higher Expectations: Why new frontier of wealth banking lies in the digital and the RM

As the role of the relationship manager evolves, banks must build the right digital platform in order to meet clients’ expectations.

As the number of affluent Asians grows, banks are challenged with providing a holistic hybrid wealth management and banking experience that meets their rising standards.

Banks’ clients in Asia are becoming more affluent, and their increased wealth comes in tandem with increased expectations on the products and services that they can access, bank experts and leaders told attendees on the Asian Banking & Finance Summit 2022 panel on wealth management and digital banking. 

One running theme in the wealth management space is consolidation. 

“A lot of banks are now building consistent wealth continuums on one single platform, and they are merging their effluent and high net worth business to better serve the customers,” said Silvio Struebi, Partner, Banking Lead for APAC, and Revenue & Commercial Strategy Expert at Simon-Kucher & Partners. 

Such a step-up leads to multiple benefits for both banks and clients. “You have more products available via the capabilities and  for the bank, a higher cross selling ratio,” Struebi added.

However, he warned that it’s not always easy to merge these two segments in a single wealth continuum. 

Digital is less a key differentiator across banks anymore, but rather a basic requirement, Struebi noted. Apart from empowering clients with a plethora of banking services made online, it enhances the advisory experience.

But banks shouldn’t see the digital as an end-all to wealth management activities. In a survey, EY found that affluent bank clients seek a hybrid wealth banking journey.

“We've done extensive survey-led research on wealth management customers and found that face to face interactions remain critical, especially where we are currently in the cycle of where we're seeing choppy markets, we're seeing a very difficult macro environment,” said Alexander Kling, Director, Financial Services Consulting, Ernst & Young Advisory.

Kling noted another reason why digital platforms are crucial in wealth management: they provide the data in order for relationship managers (RM) to properly advise their clients.

“In some places, there's a very strong digital preference, things like executing transactions, monitoring and analyzing results. But clients want an advisor to help them with products, learn about the products, and receive financial advice. Digital will be crucial in scaling that advice, right delivering this hybrid type of service in a sustainable and cost effective way,” Kling said.

Steven WONG Weng Leong, a C-suite Banking & Financial Services Executive from Malaysia, further highlighted the importance of the digital platform in providing the right insights to RMs.

“At the end of day the platform itself is very crucial. It studies the behavior, the data, you know, the patterns and so on. And that will be a very valuable insight in the use of cross selling,”  Wong said.

For example, in a digital wallet, banks can introduce a new product that can cater to the ultra high net worth clients, such as the option to automatically allocate a portion of the money left in their digital wallet to money market funds, Wong said. 

From the above, integration plays a notable theme once more. How do you engage with your customers in an integrative way? 

“So many clients are telling us that they want to consolidate their investment activities onto a single provider or a single platform, especially in the mass affluent space. So that's another opportunity where digital platforms can facilitate the integration of products and services,” EY’s Kling said.

Ultimately, having relationship managers (RM) play the right roles in their clients’ wealth banking journeys is now a crucial battlefront for banks seeking to stand out in the wealth management space. 

“The role of the relationship manager (RM) is changing. They are moving away from post products towards holistically servicing customers. The speed and quality of advice that an RM is providing will be the key differentiator in the future,” said Simon-Kucher & Partner’s Struebi.

Watch the video below to know more about the panel discussion: