DigitizingWealthManagement

DigitizingWealthManagement

Challenges facingthe wealthmanagement market

Challenges facingthe wealthmanagement market

Changing customerbehaviourChanging technology

Challenges facing the wealth management industry

Wealthmanagement is

being impacted by

New entrants Increasing operatingcosts

Wealthmanagement is

being impacted by

Changing technology

Banking isundergoinga digitalrevolution

Cloud

Big Data

MobileBanking isundergoinga digitalrevolution

Mobile

Social

Internet of things

The market is disrupted by new entrants with innovative technology

Globally, only 25% of wealth managers provide customised advice online

*BCG Overcoming the Digital Dilemma in Wealth Management

Changing customer behaviour

Source: Capgemini33.5%

75%

44%

10%

Source: BCG

MEA region is the second-highestproportion of newly created wealth

of HNWIs in MEA prefer digital contact

Customers expecting a more digital experience

Source: Finextra Source: BCG75%10%

of PWM clients surveyed would like moreinteractive multichannel offerings

Intergenerational retention rate in PWM

Increasing operating costs

6271 75 75 74 7566

8881

87 90 88

60708090

100

The private banking industry’soperating costs are continuing tocreep up. The industry needs to

focus on working out its efficiencypoints and optimising them

Cost-Income Ratio 2007-2012 – Diversified Firms vs. Pure Play Firms

62

0102030405060

2007 2008 2009 2010 2011 2012

DiversifiedFlexibilityEconomies of ScaleSynergies

Source: “Private Banking Benchmark 2013”, Scorpio Partnership, 2013

The private banking industry’soperating costs are continuing tocreep up. The industry needs to

focus on working out its efficiencypoints and optimising them

(Scorpio Partnership, 2013)

Pure PlayRegulation (MIFiD, FATCA etc.)Complex Financial MarketsPersonnel Costs

Delivering acustomer-centricdigital strategy

Delivering acustomer-centricdigital strategy

Requires constant investment and innovation

Must equally address clients’ and internal staff’srequirements

Should not compete with the relationship manager

Should look at 3 specific goals: revenue growth cost reduction advisor strengthening

A Digital Strategy…

Requires constant investment and innovation

Must equally address clients’ and internal staff’srequirements

Should not compete with the relationship manager

Should look at 3 specific goals: revenue growth cost reduction advisor strengthening

The external goal

Delivered at the rightplace, time and withfull transparency

Through the rightchannel

Personalized forindividual needs

Rightproducts

and services

Introducing new customer experience

Rightproducts

and services

The internal goal

Delivered quickerfollowing agilemethodology

New sources ofrevenue

New tools to empowerand educate internal staff

ITinfrastructure

andprocedures

Building a new efficient operating model

ITinfrastructure

andprocedures

Process simplification

Scalable, highly-automated back office

Rich, omnipresentchannels

Enterprise data model

How to get there

Process simplification

Real-time information

Rich, omnipresentchannels

Contextual information

A series of building blocks

Customer

Custom

er InteractionsWWW

Kiosk

ATMW

eb

Digital Engagement

InternalEvents

CustomerInsights

Products

Decisions

Custom

er InteractionsWWW

Web

Mobile

IVR

Branch

ExternalEvents

TheopportunitiesTheopportunities

Opportunities for the wealth management industry

Current players stillwell positioned

Strong fundamentalsCustomer behaviour

Social

Current players stillwell positioned

Digitization

Strong fundamentals

of the MEA HNWI’s are confident in theirability to generate wealth in the nearfuture

87.2%MEA annual growth in millionaire

wealth through 2018, trailing only Asia

9.5%

Strong fundamental growth in demand underpins this opportunity in wealth

of the MEA HNWI’s are confident in theirability to generate wealth in the nearfuture

Customer behavior

High Net Worth Individuals place more trust in wealthadvisors than the rest of the world

Wealthy individuals in MEA are 48.2% (the highest)more inclined to pay for a more customized level ofservice.

Trust

Willing to pay Wealthy individuals in MEA are 48.2% (the highest)more inclined to pay for a more customized level ofservice.

Assessment to be made based on the above criteria

HNWI in MEA are more inclined to seekprofessional financial advice that the rest of theworld

Greater demand

Great opportunity to develop an increasingly client-centric service model to grow revenues

Digital

Reduction in customerattrition as a result of havingan advanced digital offering

5%Increase in revenues from crossselling as a result of having anadvanced digital offering

2% - 5%Efficiency gains from greaterautomation and more streamlined processes

10% – 15%

An advanced digital strategy will allow banks to lower costs and improve customer service

Reduction in customerattrition as a result of havingan advanced digital offering

Increase in revenues from crossselling as a result of having anadvanced digital offering

Efficiency gains from greaterautomation and more streamlined processes

Social

HNWI more likely to makebusiness decisions with socialdecisions in mind than the rest ofthe world

55% “Ample opportunity exists toguide, educate, and supportHNWI in relatively new socialimpact endeavours such associally responsible investing andimpact investing”

Tapping into this can be an important revenue stream for wealth managers

*MyPrivateBanking report March 2015

HNWI more likely to makebusiness decisions with socialdecisions in mind than the rest ofthe world

“Ample opportunity exists toguide, educate, and supportHNWI in relatively new socialimpact endeavours such associally responsible investing andimpact investing”

Conclusion

Opportunityabounds, but so

does competition.Customer

expectations areraised.

Opportunityabounds, but so

does competition.Customer

expectations areraised.

Thank you

temenos.com