When Credit Suisse rolled out a new online private banking platform in Asia earlier this month, it trumpeted a bevy of benefits for wealthy clients in the region. The new system, launched in Singapore and available initially on the iPad, provides round-the-clock access to account information, personalised market insights and other millionaire-friendly digital goodies.
“Consumers in Asia tend to react very positively to digital innovations, and our clients here are also younger, more tech-savvy and demand digital innovations in banking services,” says Francois Monnet, chief operating officer, private banking Asia Pacific, at Credit Suisse.
The digitisation of private banking isn’t just about pleasing clients, however. The Credit Suisse platform is helping to attract new recruits and to make existing relationship managers (RMs) more productive in the face of huge talent shortages afflicting the wealth sector in Asia.
Monnet is frank about the scale of the problem. Asia’s high-net-worth population stands at about 7m, he says, and if each RM managed 35 millionaires, the region would need about 200,000 RMs. Today there only about 10,000 of them in Singapore and Hong Kong combined.
“Private banking is a relatively nascent industry in Asia and we face the challenge of not having enough talent to cater to the increasing demand in wealth management services,” Monnet tell us. “This will become much more pronounced in years ahead, given that the high-net-worth wealth pool in this region is growing at around 8% annually.”
Nevertheless, Credit Suisse has still managed to boost its headcount in Asia, the fastest growing region for its private banking business. In 2014 it added 50 new RMs, taking its client-facing headcount to 490. The appointment of Tidjane Thiam as the firm’s new CEO is expected to accelerate this growth. “One of our strategic focuses continues to be hiring top talent from the market,” says Monnet, without giving a headcount target.
Monnet believes that the new digital platform will aid the firm’s recruitment in Asia this year. “It will improve the productivity of the RM in servicing clients, and this will help attract talent to the bank. In fact, we are already using the new digital private banking capabilities as part of our strategic recruitment in Asia, and have received favourable response among candidates.”
Productivity gains
While iPads won’t replace RMs any time soon, technology can free up time for bankers, boosting their productivity and thereby going some way to reduce the relentless pressure on banks to recruit new talent. Private bankers could be spending as much as half of their time on non-client facing activities, says Pathik Gupta, head of wealth management, Asia Pacific, at the consultancy McLagan.
“Stringent regulation requires clients to go through prolonged onboarding processes, which reduce the RMs’ time allocation to real client management,” adds Gupta. “Digital platforms simplify onboarding by automating KYC, execution and documentation, and they help RMs become more efficient and focused on business development. They also enable banks to focus on improving the productivity levels of their RMs, which are currently low in Asia compared to global norms.”
Monnet says the Credit Suisse platform will bring clients and bankers closer together rather than create a digital divide between them. “RMs will have more time to focus on their clients’ priorities. Clients will be able to manage administrative activities themselves, freeing up RMs to focus on value-added interactions with clients,” he explains. “We are simplifying access to the knowledge of the bank so our clients can identify and act on the information that is most important to them, allowing them to access their RM directly.”
The digital channel at Credit Suisse enables RMs to deliver ideas and content to clients and gives them greater insights into clients’ preferences based on their online behaviour. Clients, meanwhile, have better access to information about their portfolios and the bank’s research.
The limits of technology
Monnet says his RMs need to have “familiarity and agility” with IT systems. “This goes from on-boarding clients, executing trade instructions, preparing an investment proposal, rebalancing a portfolio, performing compliance tasks, and many more activities which can only benefit from system automation as well as consistency and completeness in execution.”
“Having said that, an RM’s primary skill set will always remain the combination of relationship-building ability and expertise in financial advice. Our digital private banking platform does not much alter this equation, especially if one keeps in mind that the user experience at the core of our digital capabilities is fundamentally user-friendly, simple and engaging.”
Gupta from McLagan agrees that there will always be a limit to the degree of technical knowledge required in private banking. “The purpose of a digital platform is to make life easier for clients and RMs, not to complicate it. If an IT skill set is ever required by RMs to carry out their business, technology has failed to create a meaningful impact – IT has to be simple to use. Career success for RMs should not be based on their IT skills, but on their continued ability to provide a human touch to the relationship management process.”