One positive of 2020 is it has accelerated the pace of digital transformation, as firms embrace digital solutions to prepare for recovery and renewal in the decade to come.
The future of a digital economy includes a high-touch world of private banking that is likely to create a compelling digital client experience that meets the evolving needs of the next generation to stay on course and grow wallet share.
The current state of digital acceleration will have a permanent impact on the private banking industry, said Hasan Rauf, DTCC Executive Director, Head of Business Development, APAC, who recently held a one-on-one exclusive with Patrick Dreyfuss, Chief Operating Officer for DBS Wealth Management, to gather his insights.
Rauf: As private banks rethink about the future and key themes to focus in 2021, how critical is the need to embrace digital agility to sustain growth?
Dreyfuss: As is the case with many other industries, the shift to digitalization in wealth management is not new. With the need to comply with evolving regulatory requirements, control practices have triggered new processes that impact Relationship Managers efficiency, and how they manage the client experience. This has been taking place while most private banks were facing challenges to improve business profitability, facing a prolonged period of intense competition on clients and talents between private clients, and in an environment of reduction of transactional fees.
Process digitalization and automation have helped private banks address these challenges – creating greater efficiencies and enabling the delivery of faster, consistent and fit-for-purpose, higher quality service. It also facilitated the opening of new and more effective digital channels to ensure that every client interaction is made simpler and more convenient. And more personalized and relevant services can now be delivered based on a client’s journey with the bank with technologies supporting big data and machine learning to handle large and complex data sets, and data analytics to uncover insights and hidden patterns.
Looking back on the bright side of 2020, the global pandemic was a catalyst for change – not only fast forwarding the pace of digital transformation, but also pushing digital adoption. This is, of course, good news as it enables clients to address a timely need during lockdowns, but also as we observe increased level of engagements with clients who have adopted our digital solutions.
Rauf: As wealthy investors are increasingly leveraging digital tools for their wealth management needs, can you share DBS’s digital transformation journey to support this client segment?
Dreyfuss: Becoming digital from front to back and putting the client experience at the forefront of our corporate endeavours have been part of our near-term to long-term strategy for many years. As a digital-first organization, inculcating the right digital mindset spans across our organization culture and practice – from establishing ecosystem partnerships, enabling end-to-end quote processing and trade execution to transforming our audit and credit processes by redefining how data is leveraged to optimize business operations.
Digital adoption essentially requires us to take a holistic, multi-faceted approach. It included identifying digital skill and talent gaps, and upskilling and retooling our workforce to meet the requirements of a changing digital environment. We have also introduced the agile and collaborative way of working across cross-functional teams, re-architected existing information technology (IT) infrastructure, enhancing back-end systems and reduced development time of new applications.
After we have successfully insourced our information technology infrastructure, mostly based on open standards, our digital transformation journey involved enabling our business specialists to have the required technical literacy and to speak tech fluently to support our clients’ digital needs. To ensure that technology specialists can deliver initiatives based on business requirements, both business and IT share a common vocabulary to communicate and collaborate effectively – requiring our IT specialists to translate IT speak into business speak.
To continue to optimize the client experience in the digital realm, we need to keep developing simple, intuitive and easy-to-use solutions. Aside from performing usability tests with clients, we ensure that every change to be implemented is looked through a 360-degree client lens and different stages of the client lifecycle. Additional feedback and insights are gathered through data analytics and our 5-star rating system. Input from our Relationship Managers are also invaluable in informing us what should be our key focus areas.
Rauf: Can you share some of DBS’s digital successes especially with supporting your private banking clients during the global pandemic?
Dreyfuss: The DBS iWealth platform enables our clients to monitor and manage their portfolios digitally, with direct and permanent access to over 150 banking, wealth management and investment services. Prior to the global pandemic, over 80% of our wealth clients were already registered users of iWealth.
At the height of 2020’s market volatility in March, the average login per client on our iWealth platform surged to almost once every trading day. The numbers were even higher for our high net worth client segment. For the period between January and May 2020, the number of online investment transactions processed via our iWealth platform rose by 200%.
iWealth is also used as a channel to share timely and important updates and insights from our Chief Investment Office – to help our clients keep abreast of market sentiments and trends, especially during market stress.
Rauf: Beyond the global pandemic, what would you define as a key aspect of the next normal?
Dreyfuss: The experience with the global pandemic has brought to light the speed in which the entire world can swiftly adapt to changes. What the crisis has reminded all is the imperative to be nimble-footed and flexible, and to expect the unexpected.
The disruption has also shined the spotlight on digital. But it is also crucial for companies to keep a strong focus on to topics pertaining to culture, and integration of new joiners to maintain staff engagement and to sustain an environment fostering collaboration and innovation, which is more challenging with less interactions. Ultimately, we can expect more flexible working and business practices, both for clients and our teams, from which we can hope everyone will benefit.