As a result, industry consolidation continues. The underlying problems will not be mitigated in the near future; on the contrary, new drivers of change will further strengthen the mix that will shape the wealth management industry of the future. Many challenges could be solved with the right technology. But in order to understand why the right technology is so extremely important for the future, we first have to look at the current situation and the resulting requirements. Interesting results from the Deloitte study, “The Future of Wealth Management in Switzerland”, are included throughout this write-up.

The importance of technology on customer interaction

The right technologies show the first efficiency spikes in back-office activities, but their effects on customer interactions are still difficult to spot. This is particularly because you have to look at different customer generations. The aforementioned Deloitte study found that while 59% of surveyed HNWIs prefer to meet their client advisor in person to make important investment decisions, 67% of millennials say they prefer roboadvisors. This same ratio is only 30% for Generation X and baby boomers. Therefore, the question that comes to mind is: how will the millennials behave in the future with the expected rise in assets? Would they prefer to have a personal conversation with the client advisor at some point in the event of difficult and complicated investment decisions, or would they continue to interact almost exclusively via digital channels?

The customer relationship is not property

Digital wealth management for every generation

Unconditional loyalty to one’s bank is becoming less and less important. It is becoming increasingly clear that often a single customer experience decides whether the choice for the next investment is the same provider, or a different one. The customer experience replaces loyalty. The results of the Deloitte study are also interesting here: 45% of millennials would switch to alternative solutions in search of the best option. At the same time, only 38% of HNWI customers in Switzerland are very satisfied with their bank. The following question, then, arises: how long will the financial stability, good reputation and high level of service provided by the bank’s customer advisors provide an advantageous edge over emerging alternative providers?

Control of the value chain

To what extent will banks be able to control their own ‘assemblage’? Will relationships with external providers remain controlled, or will banks maintain a much more open relationship with their ecosystem? While 58% of the Swiss banks surveyed by Deloitte claim to remain orchestrators of their ecosystem, it is clear that this will not be so easy. In addition, the question arises to what extent the traditional value chain of banks remains relevant with the advent of distributed ledger technologies.

That is why we believe that banks that want to remain successful should use a flexible platform to secure and expand their own value chain. This must bring both the customer and the bank great flexibility, extreme speed, scalability and digital added value in the back office and in direct customer interaction. These characteristics significantly influence the increasingly important customer experience described above, whether it is a digital or a direct consultation. This would also have the consequence that the bank makes itself independent of whether or not a millennial, a baby boomer or Generation X member expects competence with its needs, via whichever channel! And, in the end, that is exactly the factor that keeps the value chain stable or expandable across the generations.

How can this be implemented in reality?
The Swiss investment house Vontobel is a concrete example. With its API-based high performance wealth management platform, aixigo provides the core for the new digital wealth management offering known as ‘Volt‘ from Vontobel. In addition, digital investment advice was developed on the basis of the platform, which supports the specialist competence of the advisors in their contacts with their customers.

With Volt, Vontobel is the first Swiss financial institution to provide its clients with the investment expertise of a globally active wealth manager. In addition to the classic active wealth management, Volt makes the bank’s comprehensive service promise usable and tangible in a new way. Customers can use the intuitively operated Volt app on their smartphones to invest in financial assets that are actively managed by experts and to help shape their personal portfolio.

The investment advisory solution ‘MARS‘, also developed with Vontobel, includes, among other features, an automated documentation process that fulfils the requirements of MiFID II and FidleG. Customer advisory is in the foreground and administrative consultant work is highly automated in the background, so that there is more time for actual customer care and advice. aixigo recorded legal requirements in accordance with Vontobel’s definition and incorporated them into investment advice. Comprehensive “background work”, which is essential to ensure an efficient and tangible consultation process, is also included. aixigo’s wealth management platform is the basis for financial institutions to provide digital value-added services in personal customer contact or offer attractive and cost-effective via mobile devices. Over 100 API-based services are currently available. With Volt, Vontobel customers benefit from a digital offering that combines the expertise and solidity of one of the leading Swiss wealth managers with the user experience and the individualization options of a contemporary digital offering.

“Vontobel Volt is a new digital dimension of our successful active wealth management. The new technology enables our customers to use our investment expertise directly, individually and from anywhere at any time and to help shape their portfolio. Vontobel Volt complements our successful wealth management offering and creates additional growth potential. Our customers can be sure that 100 percent of Vontobel is in volts. This applies to the range of services, investment expertise and security”, says Christian Gmünder, COO Wealth Management Vontobel.

“We are very pleased that, with Vontobel, we were able to support an innovative and future-oriented customer in the digitization of wealth management and investment advice. After winning the ‘Banking IT Innovation Award‘ from the University of St. Gallen, we were able to set another important milestone for aixigo in the Swiss market with Vontobel”, said Christian Friedrich, CBO, aixigo.

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This article originally appeared in The Wealth Mosaic's 2020 Swiss Wealth Technology Landscape Report. Click here to access and download this report: https://docsend.com/view/2b56ksz