The increasing use of mobile devices such as smartphones and tablets has prompted banks and other financial institutions to offer platforms and applications that enable their private banking customers to use mobile apps to increase their interaction with banks, as well as help them to manage their wealth digitally.
Customers’ evolving private banking needs have widened the scope of private banking, which is no longer restricted to managing their investments.
Today, it can encompass activities such as estate planning and managing customers’ philanthropic endeavours which, by their nature, are highly customised.
Developing a mobile app that captures the entire range of private banking services and persuading customers to use it becomes a real challenge for the banks.
Some private banking customers, even if they use mobile devices for routine banking transactions, may not be receptive to the idea of performing transactions involving sensitive information and significant sums of money from their mobile phone or tablet.
Industry studies suggest that just 13 per cent of private banking customers aged 51 to 65 years use mobile for their transactions.
They are generally more comfortable having discussions and conducting banking transactions either at the bank branch or at home, face-to-face with their banker.
Further, the nature of private banking services and transactions is such that most private banking customers prefer performing transactions in person rather than electronically.
However, they might opt for electronic transactions in special circumstances, such as those related to time or geographical constraints.
Industry research points out that more than half of the clients under 50 use mobile (53 per cent) and tablet (55 per cent) in their transactions.
However, concerns about the security of online transactions and communications may curb the use of mobile devices for private banking transactions.
Maximising mobility
In spite of these challenges, as smartphones and tablets become more integrated into the lives of private banking customers, banks must maximise mobility and consider offering multichannel, round-the-clock wealth management experiences.
Also, the younger high net worth (HNW) individuals are likely to be more receptive to newer technologies for their private banking and wealth-management needs.
The Asia Pacific region also leads in smartphone penetration – a key indicator of mobile banking usage.
This category of HNWs is most likely to embrace private banking functions over their smartphones or tablets.
An all-inclusive private banking app will succeed because, while existing apps may have some or most of these attributes, integrating all in a single application can result in a superlative private banking app for mobiles and tablets.
360-degree approach
The right private banking app should be widely accepted and work well on most mobile and tablet operating systems and platforms.
Such an app should also allow for consolidated reporting of customer portfolio, portfolio management tools, the ability to trade and access to research articles.
Offering viable alternatives to meetings – such as online chat, video chat (such as through Skype) or any other secure social media application – is essential.
The app should also allow customers to join or stream online investor meetings and forums arranged by the bank, or connect with other financial experts or investors via social media.
Adequate safety measures, such as security devices, virtual keypads and fingerprint recognition should be enabled.
Other components that the app should include are data storage options, the ability to perform non-banking transactions and integration with retail banking services.
By giving the smartphone and tablet banking channels their due, and providing apps with comprehensive functions and features for these channels, private banks and wealth managers can potentially reduce expenses through lower transaction costs, retain more clients and increase penetration in previously untapped areas.
An all-inclusive, cross-platform app for private banking can be a game changer for both customers and wealth managers.
Given the speed at which mobility is impacting existing industries and creating new ones, the private banking app might very soon become the top channel for banks, rather than just an add-on.
Jaideep Poondir is the senior vice president for banking and financial services at global technology consultancy Cognizant.
