June 18, 2014 / 12:50 PM / 6 years ago

Wealth managers look online to bolster advisory services

GENEVA (Reuters) - Whether it’s allowing smartphone-touting millionaires to track their investments on the go or plan new positions by videochat, wealth managers are moving into the digital age.

Firms are racing to invest in new technologies, private bankers said, as they try to catch up with advances in other areas of banking where mobile and internet usage is widespread.

“People who do not invest on the digital front will not be here in 10 years, they will be forced to buy in, sell out, team up,” Juerg Zeltner, head of UBS’s UBSN.VX private bank told the Reuters Global Wealth Management Summit in Geneva.

Zeltner added UBS was investing hundreds of millions of francs every year to improve its offering and was already planning a digital-only approach in China.

The upheaval is a particularly awkward challenge for a corner of the banking market still deeply reliant on advisory services and close personal ties with clients.

Shielding customers’ fortunes from cyber hackers and other confidentiality breaches is another headache, while firms also have to cater to the varying demands of different geographies and generations in an industry still weighted towards older customers, though client needs are starting to converge.

“You’d be surprised how many more mature clients are requesting digital uses these days. It’s not only an age thing,” said Alexander Classen, head of international operations for British private bank Coutts.

Finding the right formula to replicate the tailored advice wealth managers aim to provide is probably the toughest task.

Mobile phone or tablet applications allowing customers to see how their portfolios are evolving, or read daily trade execution summaries, are some of the ideas banks like Coutts and Switzerland’s Vontobel (VONN.S) are either considering or already rolling out.

The private banking unit of Italy’s UniCredit (CRDI.MI) is even planning to give its clients tablet computers, according to Manuela D’Onofrio, who runs global investment strategy there. These devices will allow secure video conferences with their advisers or get research on trends and strategies.


“We will have to invest to make parts or even the whole process (of advising clients) available through different channels,” said Georg Schubiger, head of the private banking arm of Vontobel Holding AG. “Wealth management is still done very much face to face. But it’s something we have to think about very carefully.”

Already a big chunk of investment in new technologies is being eaten up by IT security to fend off the rising threat of attacks from sophisticated hackers, private bankers said.

Cyber crime costs the global economy about $445 billion every year, according to a study by the Center for Strategic and International Studies, and Coutts’ Classen estimated security could end up representing about 30 percent of private banks’ technology budgets.

David Chong, chairman of Asia’s largest independent trust company Portcullis TrustNet, told the Wealth Management Summit in Singapore his firm had already spent heavily on computer systems and security, though he saw hacking as still a big threat.

“I tell clients that if the NSA (U.S. National Security Agency) cannot prevent ... theft from their systems, we don’t have much of a chance,” Chong said.

Clients’ broader use of the Internet is further complicating private banks’ tasks, some said, though customers still demand the same standards of confidentiality from their advisers.

“Sometimes I actually have to smile when people tell me ... can you still guarantee everything, and then you look up their yacht and their houses and their families on Facebook,” said UBS’s Zeltner.

Additional reporting by Rachel Armstrong in Singapore; Editing by David Holmes; Follow Reuters Summits on Twitter @Reuters_Summits

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