Over the last few years, we have seen much innovation in the financial sector. Challenger banks such as Monzo and Starling have seen rapid growth, with customers being attracted to their open and intuitive systems.
However, we’re yet to see corresponding innovation in the private banking and wealth management sectors. Many firms and asset managers rely on legacy tech that is incapable of providing the modern customer with the sleek, streamlined and hassle-free offering that they seek from their financial services.
Digitisation is key to meeting the needs of the modern consumer, and below you’ll find areas that will benefit most from such a change.
Payments, Transfers & Exchange
Historically, the process of transferring money was slow, complicated and expensive. However, thanks to the likes of TransferWise and other such FinTech unicorns, this is no longer the case..
In-app software now allows for the real time checking of exchange prices, ensuring customers can get the most accurate and cost-efficient rates in the palm of their hand.
Gone are the days of endless form signing as well with Touch ID, DocuSign and voice-authentication greatly increasing the speed in which customers can safely and securely transfer money between accounts, Payees and countries or make payments.
Part of this success comes from the collaborative approach now used by most banks. This has enabled firms to partner with smaller, more agile fintechs, implementing a number of white-label services, and advancing their own offering to appeal to the new modern consumer.
This collaborative-formula will be the key to success and innovation within the financial sector for years to come.
Trading and Investment
Digital brokerships, such as eToro, Trading212 and RobinHood have led to a swathe of new retail investors entering the marketplace, and with that banks and firms should be looking to engage with this exciting new customer base.
If GameStop taught us anything, it’s that modern investors want the capability and the security to quickly access the trading floor and invest without the labour-intensive ways of years gone by with brokers, trade forms and endless bureaucracy.
This instant-access to the trade floor does pose risks to retail investors’ capital however and so it’s pivotal that financial service providers make a proactive effort to educate their customers on investing. This also offers a great opportunity for banks to open up positive channels of communication with their clients.
Banks shouldn’t be afraid to become more conversational and friendly with their customers to help solidify engagement. Perhaps by providing a monthly newsletter, banks and firms can cover off a number of key actions, helping to educate the consumer on interesting stocks and share options. By doing this, they can help their retail investors avoid costly investing mistakes.
Through these actions established banks and finance professionals are fulfilling their educational role and utilizing their investing experience to ensure the DIY-Investor is safe and well-informed.
Compliance
The debate over modernising financial service companies compliance models is polarising. On the one hand, established banks and firms will say that what is not broken does not need fixing, however given that the FCA imposed nearly £200m worth of fines to firms in 2020 alone, it would appear that there is definite room for improvement.
Innovative technology offers the ability for financial service companies to automate the process of collating and protecting customer data, and also bypass the risk of human error which can often be a costly and easily-avoided outcome when it comes to compliance.
Automated data processes also offer a multitude of benefits by optimising a bank’s operational efficiency, ensuring regulatory requirements are met, and creating a satisfying customer experience.
In previous decades the financial services industry has been slow to adapt and often it’s been for understandable reasons, the stakes are high and mistakes can result in customers lost and sizable fines.
That said, the benefits of greater digitisation pose too great an opportunity for banks, firms and wealth management companies to upgrade to a more efficient work process and retain & grow more customers.
By utilising the latest technology available to the sector and becoming more open-minded to collaboration with third-party vendors, firms can provide benefit to their customers.
Whether that is streamlining compliance, saving costs and time on payments & transfers or expanding to allow consumers the ability to invest and trade directly from within an ‘all-in-one’ app. The customer now wants efficiency without the sacrifice of security and that is exactly what we should be looking to provide.
This article originally appeared on Global Banking & Finance.
