This publication can exclusively report on fresh insight from MyPrivateBanking Research, which sheds light on innovation in the digital and mobile app world.

Digital advancements are further transforming wealth management businesses globally - particularly with regard to advisor-client interactions - and fintech start-ups are playing a bigger role in certain aspects of this, according to a new report by MyPrivateBanking Research.

Younger vendors are rolling out video communication tools that more strongly replicate in-person client meetings, for example, by providing share screens as well as ways to exchange messages and record meetings. Analytical and natural language software solutions are also helping advisors analyse data; management solutions are affording a more disciplined and integrated approach to social media, and innovative client engagement tools are being developed.

MyPrivateBanking Research's report, entitled Digital and Mobile Solutions for Financial Advisors 2015, said mobile apps are “by far” the dominant technology tool in the financial advisory world. There has, unsurprisingly, been a “significant increase” in the number of mobile app vendors in past three years, it said.

Although less than 15 per cent of advisors today are actually using an advisor app provided by their firm, MyPrivateBanking predicts that “within five years the majority will be doing so,” said Steffen Binder, research director at the firm.

“We estimate that smaller firms are using these apps to an even lesser degree,” Carmela Melone, an analyst at MyPrivateBanking, told this publication. “The reason is that most banks have no full roll-out yet and are still in a test phase. The low share can also be explained by the conservative nature of the wealth management industry in general. The regulatory pressure banks are facing today contribute to a cautious attitude towards digital developments. Another aspect is the high costs integration of such solutions can cause. Usually, these integrations require several months, which is another crucial factor in the light of rapid technological change.”

She added that the 15 per cent figure is likely to rise significantly due to increasing demand from the client side (especially when Generation Y enters the stage) as well as mounting competitive pressure. “Some of the biggest wealth management companies worldwide have already started to make use of such digital tools and feedback from clients is good.”

Indeed, advisors are leveraging mobile apps to enrich client meetings as well as provide video, analytical and recommendation tools, and control and leverage social media. Emerging trends include a growing tendency to provide apps based on SaaS (software-as-a-service) solutions, and biometrical authentication, according the research.

That traditional financial advisors have a “human touch” and specific banking “know-how” is not enough to stem the threat from robo and other digital offerings, Binder added.

Driving factors

Melone said MyPrivateBanking believes that the digital trend is primarily client-driven, influenced by their experiences in the retail banking sphere. 

“On the other hand, advisors will increasingly require such tools, as well, which enables them to serve a higher number of clients due to shrinking margins,” she said. “Partly automated processes provided by recommendation and analytical tools will play an important role as well as social media management tools, which empower advisors to handle their social activities more easily. As many advisors already bring their own mobile devices to work there is 'natural' pressure on the IT departments to come up with compliant solutions.”

Regional trends include that Asian countries such as China are at the forefront of the digital revolution in banking and wealth management due to the higher proportion of offshore clients requiring regular communication over large distances.

“While this development is still slower in European countries like Switzerland or Germany due to regulatory issues and more conservative HNW clients, we basically see the same trend across all regions,” Melone said.

MyPrivateBanking's report analysed the digital solutions for financial advisors offered by the following vendors: Avaloq, Blue Jeans, Crealogix, eMoney Advisor, Hearsay Social, Intellect Design Arena, MicroStrategy, Narrative Science, Orion, Profile Sytems & Software, SunGard, Temenos, TokBox, Upside, YSEOP.

The firm gave to six vendor solutions the award “Leading Vendor – Digital Solutions for Financial Advisors 2015”. They are: Avaloq Wealth Advisory, eMoney Advisor emX, Hearsay Social, Intellect FABX, MicroStrategy Wealth Management Solutions and YSEOP.