Geoffroy De Ridder joined the Lombard Odier Group in 2019 and is responsible for the Technology & Operations Unit. He has followed a long international career in private banking IT and strategic repositioning with institutions such as McKinsey, BCV and UBS.
The world of private banking is being transformed by technology and innovation
Technology offers a multitude of opportunities and now stands at the heart of the banking business. Having been visible in the retail banking space for many years, these opportunities have now reached wealth management too. Following the widespread impact of the Covid-19 crisis, private banks have accelerated their digital agenda to recreate the client proximity that is essential to the industry. As a result, human interactions with the sector have changed; exchanges and processes have been “de-physicalised”, and digital channels have been adopted on a massive scale.
“The winning private banks of tomorrow will be those that offer a unique, digital client experience.”
Client expectations have also changed considerably in recent years, an evolution that is accelerating. Where previously clients were satisfied with changes to the offering and experience a few times a year, they now expect institutions to be more reactive and proactive. Private banks are therefore focusing on adding value by delivering bespoke and personalised experiences alongside rich, curated content. In addition, they are increasingly engaging with clients on administrative processes through digital channels, thus reducing costs and errors.
Digitalisation has simplified banking processes and redefined the relationship between banker and client: banks no longer have an information advantage and clients are more educated, resulting in richer and more innovative exchanges.
While new technology can strengthen relationships and facilitate communication, human contact must remain at the heart of the private banking value proposition: digitalisation does not mean dehumanisation. The benefit of technology lies in how people use it. It is this combination of human skill and digital possibility, with digital used to enhance rather than replace the human element, that makes technology such a rich area for innovation in the banking sector.
" The human being must be at the heart of digitalisation, not the other way around. "
Another key benefit where technology is heavily involved is data protection. Client data is a private bank’s most precious asset, so must sit at the top of the agenda. Basic technology and security mechanisms create the necessary barriers, but innovation allows banks to go further; the use of artificial intelligence to detect abnormal behaviour, including attempted fraud or data theft, is just one example. Technology has been proven indispensable in every aspect of private banking, and clients have adopted digital interactions for a wide range of services.
Banking technology has become a key asset for institutions, rising up CEO and board agendas and representing an ever-growing percentage of strategic investments. We do not expect this trend to reverse any time soon – quite the opposite. Emerging markets and Asia in particular demonstrate how this might be adopted in the years to come, and we will see larger digital ecosystems integrated into bank’s offerings. How private banks will react to such massive changes remains to be seen. What is certain is that they must become more agile, integrate innovations faster, and involve clients in their R&D processes to define tomorrow’s client offering and experience.
Private banks are at a cross-road: the traditional model will continue to exist for a long time, but we will see some banks accelerate growth if they have proved themselves capable of adapting faster to evolving client demands. These are the banks that will emerge as the winners, thanks to their ability to influence the technology agenda.
“Technology investments will continue to increase in the near future, driven by client demand and behaviour.”
