According to market experts, tomorrow’s banking world will have changed significantly and be shaped by major developments in the area of platforms / smart ecosystems, blockchain, artificial intelligence / machine learning and augmented/virtual reality.
Megatrends, such as platform solutions or artificial intelligence, are hotly discussed and very fashionable. These ideas, however, are often described in a very theoretical manner, giving the impression that such developments may become concrete at some point in time, but are currently more a vision of the future.
Already today, however, a considerable amount of innovations are introduced to the market, pointing in the direction of these megatrends. A well-known example is the mobile bank N26. Since its launch in 2015, N26 has built a customer base of more than 2 million customers in 17 European countries and plans to enter the UK and US markets. Currently, they offer retail customers a free, simple and exclusively mobile bank account. This account can be set up within eight minutes, including online identification via the video identification provider IDnow. Once up and running, the N26 account serves as a platform for various banking transactions of the digital, cashless customer. It offers services such as instant transfers, payment requests, use of Google pay, display of the current expenditure statistics as well as a csv file export.
Heading from retail to private banking
DBS iWealth is a digital wealth management platform enabling customers to manage their complex banking affairs 24/7 from around the globe. Within the platform, customers are able to transfer funds, pay bills, view a breakdown of their portfolio asset movements, invest as well as trade in multiple currencies and receive personalized research insights. The DBS iWealth platform is part of the broader DBS banking platform, which was launched in late 2017 as a developer platform for banking APIs. The idea is to lead in creating innovative and customer-centric experiences by making a wide range of APIs available to other corporates, fintech companies and software developers to plug into. Today, already more than 50 companies (including large companies such as McDonald’s, AIG, MSIG and PropertyGuru) have joined the DBS platform to develop solutions that enhance customer convenience. To give a concrete example, the delivery service of McDonald’s (McDelivery) offers customers a fast, cashless payment via PayLah!, the payment application within the DBS platform. For this purpose, McDonald’s has connected to the platform via the DBS banking APIs. Once set up, the customer can use the PayLah! app to pay for the McDelivery order.
Looking at further innovations in the wealth management segment, UBS recently introduced an Avatar, which is a clone of the bank’s chief economist Daniel Kalt. As he is in high demand, the idea is for the Avatar to meet with multiple clients simultaneously and discuss specific topics via an interactive video chat based entirely on predefined information. This allows UBS to integrate expert knowledge into customer meetings at short notice and without requiring Mr. Kalt’s physical presence. An entire team of design, technology and industry experts work on the development of this Avatar to make it appear as real and informative as possible.
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Canopy as a data expert for private banks and asset managers
Looking beyond the B2C market towards the B2B market, Canopy stands out as a data expert for private banks and asset managers. Founded in Singapore in 2015, Canopy provides a clear and accurate picture of a HNWI’s (High-Net-Worth-Individual) entire wealth. For this purpose, the system analyzes data from various banking systems, electronic data feeds and any other form of documentation such as PDFs. Once processed within the Canopy engine, clean data is provided for further aggregation, analysis and visualization. This information, which includes all the customer’s assets, allows the relationship manager to increase traction. Combined with various dynamic output formats, it can significantly improve the relationship manager’s work. Credit Suisse’s digital private banking unit has already integrated the Canopy data engine, thereby enabling the bank to position itself as a holistic advisor with greater substance.
Impact on private banks today
The examples above demonstrate how the movement towards megatrends such as smart ecosystems, artificial intelligence or virtual reality is already happening today. Even though the current cases focus on large banks and fintech companies, they indicate that the development towards digital private banking has begun. Undoubtedly, not every mega trend fits every private bank. To stay in the game, though, every bank must have a clear vision of its digital future and should act accordingly today rather than tomorrow.