In the rapidly evolving landscape of wealth management, the client experience has become a central focus for financial institutions. As clients increasingly demand more personalised, efficient, and seamless interactions, wealth managers must adapt to these expectations. One firm at the forefront of understanding and tracking this shift is Colombus Consulting, which launched its proprietary Digital Index for private banking in 2021. This index measures the digital footprint of wealth management firms, primarily focusing on private banking and onshore clients. The insights provided by the Digital Index highlight how digital transformation has reshaped the client experience in wealth management and what firms must do to remain competitive in this space.
The growing importance of client experience in wealth management
In the rapidly evolving landscape of wealth management, the client experience has become a central focus for financial institutions. As clients increasingly demand more personalised, efficient, and seamless interactions, wealth managers must adapt to these expectations. One firm at the forefront of understanding and tracking this shift is Colombus Consulting, which launched its proprietary Digital Index for private banking in 2021. This index measures the digital footprint of wealth management firms, primarily focusing on private banking and onshore clients. The insights provided by the Digital Index highlight how digital transformation has reshaped the client experience in wealth management and what firms must do to remain competitive in this space.
Colombus Consulting’s Digital Index: measuring the digital footprint
Colombus Consulting’s Digital Index is designed to offer a comprehensive view of the digital presence and effectiveness of wealth management firms. The index is built on two core components: quantitative indicators and market trends. The indicators are further categorised into four key areas: website, mobile, digital marketing, and social networks. These categories allow firms to assess how their digital presence stacks up against industry standards and how emerging market trends influence the client experience.
The rise of digital transformation in wealth management has been a major topic since 2009, but it has gained considerable momentum in recent years. Despite this acceleration, the rankings in the Digital Index have remained relatively stable. Wealth management firms generally fall into two distinct groups: ‘leaders’ and ‘smart followers’. The leaders are those at the forefront of adopting new technologies, while smart followers prefer to observe the success of emerging innovations before adopting them.
Key components of the digital index
- Website
For wealth management firms, the website serves as a crucial platform to showcase products and services. In the past few years, audience engagement with websites has increased by 50%, signalling a growing reliance on digital platforms for client interactions. As a result, firms have heavily invested in digital tools such as online KYC (Know Your Customer) processes, digital onboarding, and virtual assistants, all aimed at improving the client experience. Additionally, tools for analysing website performance have become more sophisticated, enabling firms to optimise their digital presence and engage with clients more effectively.
- Mobile applications
Mobile applications are rapidly becoming a cornerstone of the client experience, allowing clients to manage their banking needs conveniently and efficiently from anywhere. However, for these apps to truly add value, they must offer more than just basic functionalities. Most Swiss banks have embraced mobile platforms, with only one notable exception, highlighting the critical role of mobile apps in the sector. To remain competitive, firms must continuously improve the capabilities and user experience of their mobile applications, offering personalised and value-added services that go beyond mere convenience.
- Digital marketing
Digital marketing encompasses the various paid channels used by wealth management firms to promote their brands and services. Over the last four years, the use of digital marketing has doubled, with search engines driving 50% of the audience. Budgets across all channels have been increased during this period, with different breakdowns between search, display and the use of Social Media, depending on the bank in question. As digital marketing is directly linked to bank strategy, all banks should have a different approach. There is no magic formula.
- Social networks
Social media platforms, particularly LinkedIn, have seen a surge in engagement as wealth management firms look to interact with their clients in more meaningful ways. By analysing client interactions on social media, firms can gather insights that allow them to personalize their communications, creating more targeted and effective engagements. As social networks continue to play a larger role in client experience, firms must focus on enhancing their presence and leveraging these platforms to better serve their clients.
The future of wealth management: generative AI and personalisation
As wealth management firms look to the future, generative AI is expected to play a pivotal role in shaping client experience. According to a study by Colombus Consulting, 75% of respondents believe that AI will increase productivity, but many firms are still grappling with how to implement AI in a way that delivers clear results. To fully unlock the potential of AI, firms will need to focus on improving data quality and breaking down data silos, which will enable stronger use cases and more personalised client services.
Personalisation is set to become a key differentiator in the wealth management industry. As clients demand more tailored solutions, wealth managers must leverage AI and other technologies to offer bespoke services that align with individual client needs. Similar to industries like luxury goods, where products are co-created with clients, wealth management firms must move away from standardised products and offer more personalised solutions. This shift will not only meet the growing demands of clients but also enrich the overall client experience.
Conclusion
As the wealth management industry continues to evolve, the client experience is becoming an increasingly important factor for firms looking to differentiate themselves. Colombus Consulting’s Digital Index provides valuable insights into the digital transformation of wealth management, offering firms a roadmap for enhancing their digital presence and meeting the changing expectations of their clients. With the rise of technologies such as AI and the growing importance of personalisation, wealth management firms must remain agile and innovative to stay ahead of the curve.
