In an international comparison of the digital presence of private banks, two Swiss institutions make the podium. But in many cases, retail banks are further ahead than the actual top dogs.
Many banks still rely on discretionary mandates, analog access, and personal advice in their private banking offerings. But the digital transformation is not stopping there.
Finnoconsult analyzed the digital competence of competitors in private banking, comparing 30 service providers from twelve countries. The results gave traditional private banks a particularly poor report card, with the laurels instead going to universal banks that offer services in the so-called mass affluent segment.
Three Provider Groups
The report divided the institutions into three groups: Mass-affluent providers, established private banks, and universal banks with private banking offerings. The study shows that some of the banks' digitization efforts differ significantly.
At the top of the international ranking is Switzerland's UBS Wealth Management, followed by Singapore's DBS Bank and Zurich-based Vontobel completing the top three. Purely private banks Lombard Odier places sixth while Rothschild & Co is was fourth from the bottom.
Universal Banks Set the Tone
It is striking that the three institutions on the podium place a certain value on price transparency, which breaks the traditional private banking image. The report says further strengths are evident in mobile apps and online services, which are quickly found quickly, comprehensively explained, and visually well presented.
Universal banks with private banking offerings, on average, performed best, able to exploit synergies from other business areas of their banks, namely from digital retail banking. All the institutions evaluated in this category have exceptionally appealing and very user-friendly websites, according to the rating. They are ahead when it comes to online marketing and are, on average, better positioned than competitors when it comes to the range of functions offered by mobile apps.
Private Banks Lag
The losers in the rankings are the traditional private banks, with room to improve their digital customer experience above all in online marketing and the functional scope of mobile apps.
As in other countries, Swiss private banking providers have a lot of catching up to do compared with their retail banking counterparts. Another shortcoming in Switzerland is that none of the Swiss institutions offer a loyalty and ecosystem program that is apparent to new customers.
Christian Berger, Co-Founder and Managing Director at Finnoconsult, concludes that many private banking institutions lack digital innovations and have not yet managed to make the transition into the digital age. But this step is necessary to meet the expectations of the next generation of wealthy customers.
