Why tech-driven wealth management on the go still calls for a human touch
- A hybrid approach gives clients digital, do-it-yourself tools along with access to expert advice from a relationship manager
- Singapore-based DBS Treasures integrates other technologies into its solutions, such as artificial intelligence to support personalised investment guidance
In recent years, new technologies have brought widespread change to the world of banking, transforming not only the range of services on offer, but also the expectations of clients.
With online platforms allowing easy access to personal accounts and investment products without any geographic barriers, there has been a continuing rise in demand for wealth management services on the go. High-net-worth individuals (HNWIs) and others are looking to take full advantage of the flexibility and choices now available, as they adopt a more hands-on role with their finances.
For many people, it has become second nature to research and complete transactions via a mobile banking app, whether they are transferring funds, purchasing equities, trading in foreign exchange, or investing in unit trusts or ready-made portfolios.
The constraints on in-person meetings during the Covid-19 pandemic have accelerated the digitalisation of wealth management services. In a 2021 report titled “Digital Wealth Management in Asia: Will Firms Seize the Moment?”, multinational financial services firm AON pointed out that while “the human wealth adviser is a crucial constant in any wealth management relationship”, HNWI clients’ expectations of how that financial advice is delivered has changed. Now, they want “the option of a digitalised client journey that puts them in control and makes better use of their advisers’ expertise”.
As the world emerges from the pandemic and adapts to the new normal, the digitalisation trend is likely to continue.
For those who regularly move between countries and time zones for either work or leisure, the appeal of these tech-enabled, do-it-yourself functions is obvious. They make it possible for individuals to actively manage their own wealth and, when necessary, make immediate decisions.
“Technology has played an extensive role in the wealth management space. At DBS, we have been able to provide our clients with a comprehensive set of digital services for their wealth management journey through mobile banking for a number of years,” says Steven Ong, managing director and head of DBS Treasures Singapore.
“Clients who have a wealth management account with us can access digital insights and smart tools that help them spot ‘financial gaps’ and manage their money better through our DBS digibank app. They have their fingers on the pulse of the latest market developments, and the features are customised to fit each individual’s unique needs and preferences,” he says.
He notes that as of mid-2022, seven out of 10 wealth clients with accounts in Singapore were active users of DBS digital channels, logging on to the platform once every two days on average. In addition, nine out of 10 equity trades were being executed online.
Ong also points out that since 2018, online trading of equities has quadrupled, while for forex it has climbed eight times higher, and for investment funds it has grown by a factor of 26. These surges in online transactions were propelled in part by the impacts of the pandemic.
But it is still essential for clients to have the support, advice and assurance that experienced relationship managers (RMs) can provide, especially when it comes to matters that may be too complex or risky for clients to handle on their own.
“Our wealth advisers are also there when needed to engage clients in deeper conversations and discussions about changing priorities, and how to make their investment portfolios more holistic and robust,” Ong says.
The DBS Treasures wealth management platform exemplifies a hybrid approach that allows clients to enjoy the best of both worlds, anytime and anywhere, with the convenience of mobile technology as well as access to the guidance of professionals trained to interpret market movements, suggest opportunities and carefully consider the balance between risk and reward.
Ong emphasises that staying connected with RMs provides ongoing value. Besides helping to safeguard assets and navigate a safe course through stock market cycles, these advisers also serve as a source of fresh ideas and perspectives.
“Even at a time when clients want and are able to do more self-directed transactions, relationship-led wealth management services are no less relevant,” Ong says. “For example, when markets become more volatile, advisers can play a key part in ensuring clients remain calm, and focus on their long-term investment goals. So what technology does is act as a powerful complement to traditional advisory services.”
Within the DBS client base, adoption of digital services has been seen across all segments, not just the tech-savvy younger generation. That is in line with the findings in a report released last year by financial services company FNZ, titled “Debunking the Myth: Digital Wealth Management Services Only Target the Young and Mass Market”. It found that 89 per cent of investors from every group analysed around the world – from the ultra-rich and HNWIs to millennials and baby boomers – showed a preference for digital channels in the near future.
The clients making this shift are taking advantage of the flexibility in having both online and in-person support – a combination that can empower them in building financial security.
This balance of services is also particularly useful for HNWIs relocating to other countries, in order to diversify their holdings or capitalise on regional opportunities for higher returns as new industries and enterprises come to the fore. HNWI migration is an ongoing trend, according to consultancy Henley & Partners, which listed Singapore as Asia’s top destination last year in its Henley Global Citizens Report. And no matter where these individuals go, whether they are moving house or simply travelling, they will continue to have wealth management needs.
Even as this range of clients embraces the digitalisation of financial services and the convenience it offers, certain questions will arise.
“For anyone operating online, cybersecurity is one of the key risk concerns, and it cuts across all lines of business,” Ong explains. “Therefore, we are committed to upholding our customers’ trust by protecting their assets and personal data when they use our systems, applications and mobile e-services.
“In 2021, we developed a proprietary fraud engine that allows us to identify potential fraudulent transactions in real time to give clients added peace of mind, and we continue to invest in initiatives to counter cyber threats.”
DBS is also investing in further tech development, notably in the areas of artificial intelligence (AI) and machine learning, to further enhance the client experience while also empowering RMs to provide greater service. These capabilities enable RMs to have more meaningful and comprehensive conversations with clients according to their interests and needs. When paired with portfolio advisory enablement tools, RMs can advise on the most appropriate options based on a client’s individual profile, market conditions and timing.
“We have created an internal data mart with 15,000 customer data points that stitch together a client’s profile,” Ong says.
“This includes the pages they visit, the content they are interested in, the frequency of visits and the time spent viewing different categories. We then convert the data into personalised, actionable insights, which we call ‘nudges’, to guide each customer’s transaction and investment decisions.”
DBS has already deployed more than 100 AI and machine learning models to curate personalised messages for different clients, such as alerts on favourable foreign exchange rates and major price movements with relevant stocks, allowing them instant access to useful information through their mobile gadgets.
The nudges are also sent to RMs to remind them when it is the right time to reach out to a client for a helpful investment conversation.
In addition, the bank’s digitally enabled portfolio management tools for clients were recently augmented to provide a profit and loss analysis for specific time periods, as well as analyses of portfolio performance against a selection of benchmarks, and of projected cash flow from fixed-income maturity.
Ong adds that DBS mobile services even allow clients to address environmental, social and corporate governance (ESG) concerns while on the move. “We have launched an industry-first digital sustainability platform called LiveBetter, where clients can contribute to green causes and invest in ESG-themed products,” he says. “We also grade customer portfolios with ESG ratings for increased awareness.”