In order to stay relevant in Today’s market, financial institutions should consider Client Experience as one of their priorities. As recently reported by Forbes, Gen Z is less satisfied with current Customer Experiences, with just 50% satisfaction compared to 71-72% for previous generations. This data represents one of the challenges that financial institutions too should address in the short term: how to satisfy the current and future generation of clients?
Client Experience should not be limited to sales but should be extended to all company functions and all stages of interaction with the client. That is why it would be more effective to talk about “CX”. This acronym includes Consumer, Customer and Client Experience, tracing the full consumer journey, including the phases of awareness, consideration, conversion, loyalty, and advocacy.
Focusing on Private Banking, how can actors in this sector improve the experience that they offer to clients?
Private Banking Consumer Journey
The preliminary requisite for a successful consumer journey is that clients are aware of the existence of the specific Private Bank. In addition to peer-to-peer recommendations, Private Banks should be visible on a variety of channels, for instance, they should present their offer on their website, in webinars, white papers or in financial conferences. Picking the right means and occasions to show the Private Banking offer is of extreme importance, in order to target the right audience and keep up the standard of an exclusive service.
Once the consumer develops an interest in the Private Banking offer and actually considers it, the bank should be able to support them in their decision. For example, offering a personalized needs assessment and benefits overviews. This will allow to draw the consumer to conversion.
When a consumer finally decides to trust a Private Bank to manage his assets, they are immediately put in front of the cumbersome process of onboarding. This phase represents the first exposure of the client to the service so the relationship manager should aim to give a positive first impression. The client must feel reassured about the fact that he made the right choice. The process should be agile, yet compliant. Technologies that allow to cut complexity and redundance should be employed. The systems should be able to capture data once, and re-use it many times so that clients are never asked for the same information twice. Electronic forms need to be pre-populated, and data collected during onboarding should be easily accessible to relationship managers in the future.
Once the onboarding is concluded, it will be necessary to keep the relationship ongoing, by regularly informing the client about their current status and giving them free access to data, statistics, and documents. During this phase, the client is supposed to reinforce their trust in the company expertise.
The ideal outcome would be that Private Banking clients will become advocates of the bank. Adding credibility to the offer through their direct positive experience.
A tailor-made service
The key to every customer’s journey is personalization and, considering that client tailored service represents the foundation of Private Banking, this aspect should be even more stressed. A good RM should understand and put on a strategy aiming to reach the unique needs and goals of each customer. The objective should be supporting the customers proactively and holistically, trying to understand their whole life situation, their desires and their risk aversion.
An omnichannel strategy (instant messages, apps, interactive technologies etc.) would allow the client to smoothly select the ways he prefers to interact with his RM and gives the client the possibility to check his strategy and results autonomously, almost anywhere and at any given moment.
AI (Artificial Intelligence) and behavioral data analytics represent one of the most recent ways to improve the quality of the service: gain deeper insights into customer life moments, preferences, moods, and needs while, in the meantime, reducing operational costs and possible risks. For example, AI can apply biometrics to validate transactions and can detect suspicious activities through the analysis of clients’ patterns.
In the peculiar context of Luxembourg, where social diversity is high, even just in terms of nationalities, focusing on customer-centricity is of extreme importance. Pivot on the single client and offering them the best experience for their specific profile is paramount.
In turn, Private Banking clients are willing to pay an appropriate price for valuable advice from a RM that represents its personal “financial optimizer”. Consequently, price models can be customized too, for example, based on the length of customer relationship. This would complete the 360° tailored experience for the client.
Tech possibilities and risks
Nowadays, Wealth Management or Private Banking should and can rely more on WealthTech solutions, dedicated to high-net-worth individuals (HNWIs). Private Banks should implement R&D and tighten their relationships with FinTechs, to provide services that are easy to navigate and responsive. This will allow them to stay relevant in the market.
For instance, even if the relationship with the client is precious and personal trust remains decisive, Banque de Luxembourg is integrating AI in its Private Banking processes. AI can relieve employees of repetitive and time-consuming tasks so that they can focus on high added value missions for their clients.
One aspect to be highlighted is that relying on third parties providers obviously exposes Private Banks to different risks. Decentralization to tech partners can represent a source of uncertainty, for example, in case of service interruption. The solution of the technical issue could require multiple steps and dependencies, so a direct contact customer-bank will not be resolutive. This can have an important negative impact on Customer Experience. Sharing access to systems and networks with third-parties providers also exposes banks to potential cyber threats, that impact on customer satisfaction. Contingency plans and continuous evaluation of the tech partners are fundamental to ensure the promptest response to customers.
Balance is key
Despite technological advancements, the traditional Private Banking model will remain important in the next years. The customer advisor will be invested in an important mediating role, as they should represent a connection between the analogue and the digital worlds. It will be the customer to pick their preferred channel for each specific need.
Moreover, Private Banks should consider the more general need to implement technology in an ethical and human-centric way. So, AI implementation would require human supervision, as it should represent a tool for improving human activities and not totally replace them.
In conclusion, inviting the client to the Private Bank’s prestigious offices should be paired with data-driven decisions and with a digital offer. This phygital model will allow to keep contact with an increasingly geographically mobile clientele, with different needs and expectations with respect to past generations.
An article written by Laura GALIMBERTI, Senior Consultant in finance.