For many consumers, their relationships with financial institutions can be highly personal. They often choose a bank because that’s where their family has done business, or because they’ve done their own due diligence and made a personal choice.
That gives people have a certain level of loyalty to their chosen organizations.
Due to the highly sensitive nature of financial relationships, trust is essential to maintaining them. But with the rise of technology, and the demand for financial organizations to adopt and adapt, many are faced with the risk of their own attention diverting from their core strength — building and maintaining customer relationships.
This is understandable for a few reasons. In order for banks to acquire new clients and retain their existing ones, they need to meet customers where they are, whether that means offering mobile apps or digital services beyond the core of a typical banking relationship.
A great example of this is the demand for digital wealth management. Consumers are increasingly looking for services that enable them to manage their wealth online, and the proof is in the numbers.
Assets on digital platforms stand at approximately $397 billion and are expected to more than triple, eclipsing $1.4 trillion by 2022, according to the data service Statista.
For financial institutions looking to capture a piece of this growth, speed to market is a vital differentiator. While many might consider designing and launching their own digital advisory platform in-house, the risks are significant both internally and externally. For consumers, in the time it might take for a financial institution to build its offering from start to finish, many might seek out a provider that can meet their needs immediately.
For institutions, asking staff to focus on work outside of their specialty might cause them to leave for more nimble firms that can leverage technology to empower and not distract their workforce.
The solution to both challenges? Outsource non-core technology capabilities, such as digital advisory services, to proven, enterprise-ready third parties that understand the banking space. This approach helps retain talent while simultaneously enabling banks to support a higher volume of higher value customers.
Done right, outsourcing to sophisticated digital advisory providers allows banks to retain existing customers while also focusing its efforts on attracting new ones. It opens new opportunities to deepen engagement and further monetize existing relationships through upselling. It also opens the possibility for growth into new market segments — the much talked about notion of increasing wallet share.
Offering digital advisory shouldn’t cost much to support. Sophisticated third-party solutions offer easy access to wealth management for digitally savvy customers, enabling them to self-serve with minimal assistance. These solutions, in turn, allow banks to service these types of clients with less overhead.
Choosing the right approach for offering a digital wealth platform comes down to institutional preparedness. Designing and developing a solution in-house takes time and money. Partnering with a third party that supports white-labeled technology allows for quick and easy implementation, allowing you to harness the provider’s talent as your own.
One thing to keep in mind when hiring a vendor is whether or not they have deep experience in both the wealth management and the banking spaces. This means finding trusted providers that have taken the time to integrate with multiple banking cores and custodians, as well as diverse payment systems and best-in-breed portfolio managers.
Having the right pipes in place ensures implementation flows seamlessly, without any clogs in the process.
Additionally, banking institutions entrenched with legacy systems can feel comfortable partnering with a third-party provider that is pre-vetted and has established relationships with core providers, the only way that new technologies can be deployed at the speed of customer demand.