The wealth management industry is no doubt using technology more effectively than ever before; companies know that they must keep pace with client expectations to attract and retain them. State-of-the-art front-office digital tools for serving clients and advisers are, therefore, now the holy grail. Underpinning that is the need to have data management and processes in order so that the adviser can easily access the information they need and present it to the client.

Regarding technology adoption, the wealth management market usually follows the retail market with several years of delay, primarily in pushing for process efficiency. “In recent years, though, the push for technology adoption for wealth managers has been to drive client experience, and thus attract and retain the client base, offer a more holistic service, and ultimately grow the business,” says Geoffroy De Ridder, Head of Technology and Operations at Lombard Odier.

To meet these goals, private banks and wealth managers have had to prioritise digital transformation. In practical terms, this means allowing clients to easily access real-time portfolio data, conduct administrative functions, execute payments, contact their relationship manager and access relevant and timely research and other information of interest to trigger investment ideas and discussions.

“This is the basic standard of digital communications capability that most clients now expect as standard from their adviser and that we now have at Lombard Odier,” says De Ridder.

The firm can custom-build to exact requirements when it comes to discretionary portfolio management. “This granular portfolio construction capability is one of our differentiators. The system can apply rules and tailor the offering to go beyond the norm – it is more like a family office level of customisation. We also offer private markets and integrate hundreds of ESG-style indicators into our broader metrics. There is full transparency and advanced simulation capabilities.”, he continues.

These levels of functionality and digital provision are appreciated across generations. Older investors can be just as demanding as their younger, digital native counterparts regarding how they access their accounts, as well as their expectations around touchpoints and communications.

That said, the next generation, set to be the beneficiaries of the great wealth transfer, are digitally literate and expect a highly customised level of service in all areas of their life – including from their wealth manager. To retain this large amount of cross-generational wealth, banks must deliver on client experience.

Of course, a big part of this experience derives from the human element; the goal is not to replace this with digital tools but rather to leverage both the human and the digital in a way that suits the individual. Most people still prefer face-to-face meetings for important discussions. However, for the day-today, having quick access to information and the ability to run quick questions past the adviser over a communications portal is also important.

De Ridder comments: “The key is that the relationship with the bank and the adviser should feel easy and frictionless. It should suit the needs of the individual - moving up and down the digital scale as the client wishes.”

Lombard Odier’s proprietary platform, G2, addresses these points. Clients log on from a web interface called MyLO. The firm has found that the difference between adequate and excellent lies very much in the user experience and the design.

“This is all about how easy the platform is to navigate and whether it is visually attractive and configurable to the user’s needs in terms of data, content and granularity,” explains De Ridder.

For the bank, knowing how clients use the platform, where they spend their time, and where they do not, is essential to making improvements.

The same set of principles applies to encouraging advisers to use such tools. Advisers need to know that digital platforms will significantly improve their day-to-day operations. For this to happen, relationship managers need to know that the system will serve them the right information and research to ensure that their client discussions use the most up-to-date and relevant information.

“In the future, we expect to add an AI and ML capability to enhance this function further. It is something we are actively experimenting with. In the long term, we expect these developments to increase client satisfaction, expand the service provision and even lead to referrals,” says De Ridder.

He adds: “At Lombard Odier, we have a large in-house technology and operations team that has developed our G2 offering. However, we are well aware that not everything can be done in-house and that we live in a world formed of many ecosystems. FinTechs are now a common element of the ecosystem, and a collaborative approach has become broadly accepted, particularly in Asia. In Europe, I would still describe this approach as a CIO (Chief Information Officer) choice rather than a must-have. But as a concept, it is rapidly gaining in popularity.” De Ridder says that the bank believes collaboration is key to driving digital innovation and, therefore, takes a hybrid approach when it comes to tackling certain domains like cyber fraud. It complements its in-house expertise with FinTech partnerships to ensure it implements the latest approaches and solutions.

“The other compelling technological advance is to leverage data using AI. Banks are sitting on enormous amounts of data, and they are not making the most out of it. There is significant work and development happening in this area both within the industry generally and specifically here at the bank,” says De Ridder.

He adds that, in general, the evolution of technology is such that frameworks and the lifecycle of various components and software propositions have reduced from several years to months. Any bank’s IT needs, therefore, to be able to deal with rapid cycles of technological obsolescence and replacement and to make the right choices to keep the firm one step ahead. “Being successful means having a cultural openness to change and development and being able to measure and evaluate what does and does not work. It also means a willingness to work with others where needed to deliver the tools that the bank needs internally. All of this with the ultimate goal of serving the end client in the best possible way, and thus assuring the firm’s growth and success,” he concludes.

You can read and download the full WealthTech 2023 Report here.