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Wealth management must join the Digital Revolution



Wealth management must join the Digital Revolution

By Peter Matthews founder and CEO of

Having made their millions in tech, many of today’s high net worth individuals are asking themselves an elementary question; why are private wealth advisors stuck in ‘analogue’ mode?

With digital transformation ripping through most industries, wealth management is exposed to transformational changes on many fronts. According to a recent EY report on digital disruption in the wealth management sector, most high net worth entrepreneurs would gladly swap having a wealth relationship manager in exchange for better digital capabilities.

This should not come as a surprise to private banks. Many private wealth managers have thrived on their traditional skills and brand heritage, but most still rely on dated business models and legacy technologies – they have simply not kept up with the pace of change, and whilst the writing may be on the wall, some don’t appear to be reading it.

It’s time they did, as the Digital Revolution has now reached the professional classes. A recent competition by legal Artificial Intelligence platform LawGeex, in consultation with law professors from Stanford University, Duke University School of Law and University of Southern California, pitted 20 experienced human lawyers against an AI trained to evaluate legal contracts. They all read a series of non-disclosure agreements with deliberate loopholes included. The results showed the humans achieved an accuracy rate of 85% and the AI 95%. The humans took an average of 92 minutes to complete the task, whilst the AI took 26 seconds.

Little wonder that agile Fintechs and Silicon Valley giants are using these new technologies to cherry-pick high value services and reshape financial playing fields. If the traditional, less nimble incumbents feel they risk being stripped of their most valuable assets, they are right. And this is just the tip of the iceberg.

As the wealth management market continues to expand, four overarching trends are set to disrupt the established order. These trends will force radical changes to business models, client management and service offerings, so let’s take a closer look at them.

Generational change in lifestyle and attitude

By 2030 the generational transfer of wealth is estimated to be worth 4 trillion USD. Over the next five years, the majority of creators and inheritors of wealth will be millennials, and they have very different attitudes towards wealth and their financial advisors than their baby boomer parents.

Whilst baby boomers are relatively loyal and accepting of personal service, millennials are less loyal, less patient and some may be uneasy about their wealth and look for new ways to use it.

This next generation of clients is already demanding a new approach to wealth management. They come with their own agenda, incorporating lifestyle goals and social preferences.

In effect, this next generation will determine the future of wealth management for many years to come.

Wealth Management – crisis or opportunity?

As digital natives these NextGen clients will demand simple real-time services. They are less convinced of the value (and cost) of relationship managers and handholding advice. There will be a fundamental shift from the more traditional advice-led support to a more holistic, goal-based approach that centres around the ‘Health of your wealth’.

As such, clients will be looking for real-time data, personalised solutions, seamless digital experiences and will be happy to take personal responsibility for instant decision-making.

Yet what might appear as a crisis should be seen as an opportunity, one that requires wealth managers to change their mindset and embrace the shifting technology landscape.

 Regulatory environment – new frontiers

The regulatory environment has also been changing driven by a need for transparency and much greater compliance with complex new regulations. Wealth managers can no longer accept all the clients who approach them, or sanction some transactions. Banks need to know their clients better and be much more aware of where their clients’ money comes from and where it is sent or invested. This has created huge additional overheads for wealth managers, increasing costs and reducing margins and while it has frustrated relationship managers, it is part of the new reality.

Which brings us neatly to technology.

Technology – driving opportunities for change

As we move from legacy platforms and processes to robo-advisers and next generation digital transaction platforms, there are new opportunities for financial advisors to get in closer to their clients.

Automated solutions and “passive” investment management are gaining in popularity, evidenced by Fidelity’s first “no-cost” funds being launched in August, and diminishing the requirement for “active” human advice. This is lowering costs for clients but upping the ante for banks and fund managers. No-cost fund management is only possible if you are making margins elsewhere.

As technology, including AI and blockchain, prompts more product innovation and powers lower cost ‘passive’ products, the next generation of wealth creators will expect continuous innovation, access to new asset classes and a more ‘self-service’ relationship with their wealth manager.


Recognising the need for transformational change

So how should banks and the wealth management eco-system react to these multiple threats?

Firstly, it’s vital to recognise the transformational forces at play and the consequences of flying blindly into the future or attempting to shore up existing positions.

It is in this digital revolution context that Crédit Agricole Private Banking Services (CAPBS), a subsidiary of Indosuez Wealth Management, the global wealth management business of Crédit Agricole Group, decided to reposition itself as an independent provider of core banking technology and Business Process Outsourcing (BPO) services.

CAPBS leadership identified that all private banks and wealth managers face the same digital transformation challenge and by offering their best-of-breed, end-to-end private banking platform, S2i, as a fully managed service, either as software as a service (SaaS) or BPO, they could liberate their clients to focus on customising differentiating products and personalising front-end user experiences.

However, in order to be recognised as a transformation partner for global wealth managers, the business had to first undertake its own transformation.

Focusing on the value proposition

Taking a cue from its parent, Indosuez Wealth Management, CAPBS took the decision to redefine its value proposition, rename the business and position the new brand as an independent partner for wealth managers needing digital transformation.

Identifying a unique value proposition is key, as a recent report ‘Dare to be different’ by Oliver Wyman and Deutsche Bank revealed “that the same ‘unique’ value propositions are found across most wealth managers; a strong client focus, advisory excellence, global reach, and a broad and superior product offering.”.

Other studies have shown that wealth managers with focused value propositions and business models that are aligned to them have higher than average profit and better client engagement.

As a consequence, CAPBS’ leadership team were keen to carve out a clear and impactful value proposition. Following in-depth research with all stakeholders ’partners for tomorrow’s wealth managers’ became the foundation for a new service offering. This was designed around its core services to address the needs of digital transformation.


A new name in wealth management

This led to the creation of the new name, Azqore, which was announced in July 2018, with ‘Az’ referring to the end-to-end service offering and ‘qore’ referencing the S2i core banking platform. In March 2018, Azqore joined forces with Capgemini to launch a new technology and banking operations platform.

Azqore is protected with trade marks in key international markets and has a distinctive brand identity system, including a corporate website and an updated brand for S2i. The entire brand experience had to then be managed across the bank’s various channels

 In conclusion

There is no doubt that the wealth management sector is facing unprecedented disruption, but most industries are experiencing similar challenges. This should not however spell the demise of those traditional organisations who have relied for years on their heritage brands. Instead this should be seen as a once in a generation opportunity for re-invention.

By recognising the key factors disrupting the sector and re-positioning their businesses with the right technologies, wealth managers can focus on what they do best – guide, advise and manage their clients’ financial portfolios through the digital devolution.

Whilst millennials may challenge principles such as loyalty, their scepticism of conventional financial services offers financial advisors the opportunity to turn the table on disruptors and transform their offering to ensure their clients no longer wish to swap their expertise for Artificial Intelligence.


Peter Matthews is founder and CEO of Nucleus, an independent London-based brand, digital and IP consultancy.

A designer by training, Peter continues to personally lead strategic brand creation, innovation and transformation projects for international clients, specialising in financial services, travel and luxury. His rare combination of business, design, digital and IP expertise are highly relevant at a time of digital disruption in banking and beyond.

In financial services he led the user experience team creating First Direct’s online bank as long ago as 1996 and more recently has advised Azqore, Crédit Agricole Private Banking, Indosuez Wealth Management, HSBC, NatWest, Standard Chartered, Rothschild & Co and, most recently, a new online UK deposit bank.

These brand transformations have included: brand purpose, positioning, naming, identity and user experience, including websites and apps.

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Iron Mountain 2021 Outlook



Iron Mountain 2021 Outlook 1

By Stuart Bernard, VP of Digital Solutions at Iron Mountain

The Covid-19 pandemic is continuing to rewrite the rules governing how we live and work; no crystal ball is needed to identify that general trend. However, what is perhaps less clear is how this reshaping of our traditional work/life patterns will play out in physical, day-to-day terms during 2021.

To fully understand the impact of the virus on employment practices requires an investigation of two evolving challenges: how and where we work. These interlinked issues are already having a profound influence on a wide range of business processes and they are continuing to fundamentally and irrevocably altering the world of employment for people around the world.

Cost reduction will top business priorities

For most businesses, the need to preserve cash will be a major concern over the coming 12 months. Uncertain trading conditions customarily tighten purse strings so we can expect some near-term cost reduction measure. An agile, flexible approach to office space offers an immediate monetary benefit, which in combination with a widespread acceptance of remote working, provides ample opportunities for downsizing real estate holdings. This will enable businesses to divert cash to crucial customer-facing operations, helping protect bottom line performance.

Flexible working will enable greater workforce diversity

However, there is an enduring need for companies to provide offices for their employees, if only to support face-to-face collaborations and ensure that there’s an opportunity for direct learning and training to support career development. For many people, a single place of employment will no longer be the norm – a flexible mix of home, remote and office-based work will be the new reality. However, knitting dispersed employees together into an integrated unit is problematic. Meeting the needs of a hybrid workforce will require the implementation of seamless digital workflows that are responsive and robust enough to ensure that staff can be productive and connected no matter their location.

An unintended benefit of operating a hybrid workforce is the increased level of flexibility it provides when recruiting staff. This has the potential to open up the talent pool beyond conventional geographic areas, boosting access to skills and experience from a wider area. Once again, in order to maximise the opportunities this provides, it will be necessary to assemble a robust digital network in order to bridge physical distances as well as potential cultural ones, depending on how widespread a workforce becomes.

Stuart Bernard

Stuart Bernard

Automated workflows will become critical

For 2021 it’s not just where businesses operate that’s going to change; the requirements of customers are likely to transform, too. This will be especially apparent when it comes to signing contracts and delivering services. Lockdowns and Covid-19 related restrictions on traditional in-person meetings are going to herald the demise of conventionally signed documents in many instances; they are also likely to change how records are shared and stored. An increasing reliance on digital workflows will require the parallel adoption of secure digital storage and handling. Specifically, Iron Mountain’s research reveals that IT support (49%), customer relationship management (36%) and overseeing team resourcing (34%) are the top three processes digitised in response to lockdown.

Nevertheless, efficiently storing existing physical documents or ensuring their safe destruction remain important functions that businesses should not neglect, even if they’re moving to predominantly digital workflows.

Importantly, digitising processes offers a range of benefits that will outlast the current global pandemic. According to our research sample there are four key benefits, which all deliver long-term value: increased productivity (the most popular response at 27%), time savings (20%), enhanced data quality (13%) and cost reductions (12%). Irrespective of trading conditions, there are all important developments that any forward-looking business will want to gain.

Protecting bottom line performance

How does all this work in practice? Well, a fully-searchable on-line repository will enable a company to quickly and cost-effectively access and archive documents, thanks to an array of enhanced search functions. During a period of intensified competition and pressure on bottom line performance this level of functionality delivers real-time benefits that not only meets the needs of a transforming business, it also adds value and consistency to customer services. Similarly, once in place, a properly designed digital workflow system will also be able to automate processes, allowing valuable time and budget to be preserved. What at first might look like a costly investment can quickly turn into a business driver by creating a unified and responsive platform for document and contract management with anytime, anywhere access.

Despite the changing employment patterns, 2021 will show that the physical office space will not cease to exist. Having said that, the way we remember it might change as hybrid working becomes more common place. The coming year will also reinforce the importance of enterprises being flexible and agile – those that cling onto outmoded ways of operating will lose their competitive advantage during a period of dramatic change. Importantly, in order to maximise their opportunities businesses will need to invest in the best available digital tools; adopting and adapting to a paper-free workflow aren’t optional: the next 12 months are going to transform how we create, transfer, share, store and action documents thanks to an increasing use of automated workflows.

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Jack Henry shares six areas of focus for financial institutions in 2021



Jack Henry shares six areas of focus for financial institutions in 2021 2

Reflecting back on 2020, the community banking and credit union industries should be proud of how this unprecedented pandemic and resulting economic crisis was managed. It was a truly remarkable time in which organizations worked together to take care of their employees, serve and support our communities, and operate their businesses efficiently despite significant challenges.

Now in 2021, the financial services industry is focused on moving forward – and is well positioned to do so. The technology demands faced over the last year were tremendous, but they were not a surprise. Jack Henry has been steadily working toward building digital, user centric, and open technologies that allow community banks and credit unions to meet customer and member needs personally and at their time and location of choice. The company is constantly evaluating industry trends and developing the technology necessary to prepare financial institutions for continued success. Below are a few areas of focus in 2021:

  • The Paycheck Protection Program (PPP) continues. An additional $284 billion has been approved for PPP lending, including new loan eligibility and the option for qualifying businesses to receive a second loan. Preparing for the dissemination of these funds, all while managing the forgiveness process, is top of mind for many bankers. Community banks and credit unions can continue to benefit from participating in this program by gaining and strengthening small business customers as well as playing a significant role in extending loans to minority- and female-owned businesses. In fact, in addition to facilitating the majority of the small business PPP loans in 2020, community banks originated 72.6% of PPP loans made to non-white small business owners and 71.5% of PPP loans made to female small business owners.
  • Digital banking continues rapid acceleration. Digital banking adoption has reached record highs, and enhancing digital service is a top priority. The area is constantly evolving in speed, personalization and openness. The key to continued success is to stay focused on the needs of people, identify digital solutions that draw people in, engage them, and focus more on providing human-centered service in moments of need. Platforms should offer open infrastructure that makes it easy for institutions to embed their solutions of choice, preparing them for the future.
  • Payments platforms take center stage. It’s critical for financial institutions to broaden their payments options, moving toward an approach that provides end users with robust features combined with an excellent experience. An integrated payments infrastructure that provides frictionless, real-time experiences will be necessary to compete with big banks and fintechs. Financial institutions will partner with vendors that can help to build the right platform for their unique customer and member preferences.
  • Digital transformation in mortgage lending. Mortgages rates have dropped to record lows and the Federal Reserve has expressed no plans to change the rate environment until 2022 or beyond. Bankers must drive efficiency to compete. They need automation and seamless workflows that effectively measure credit risk and streamline previously manual processes. This empowers lenders to focus on building relationships and growing portfolios. Borrowers will benefit also from the added speed and connectivity with their lender.
  • Changes in the new administration. With the pending changes in Washington, a new administration will most likely swing the pendulum back toward an environment of stricter banking regulation. Economic recovery has also been identified as a top priority by the new administration. Banks and credit unions must have agile technology and processes in place to respond; outsourcing will help many with these adjustments.

Transparency and fairness in lending. Given the social environment in our country today, Jack Henry expects a real focus this year on diversity and inclusion in banking, especially around access to fair credit and lending costs. Many organizations, Jack Henry included, have taken a formal stance in supporting racial justice and equality. Working together to ensure that lending clients are treated equitably.

This year will continue to be about partnerships that are committed to doing the right thing and providing for local communities. Together, fintechs and financial institutions can develop joint strategies and modern technology that drive success, both today and tomorrow.

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Seven lessons from 2020



Seven lessons from 2020 3

Rebeca Ehrnrooth, Equilibrium Capital and CEMS Alumni Association President


Attending a New Year’s luncheon on 31 December 2019, we played a game that involved predicting the world in 2020. Some of the questions included: would Uber become profitable? Would the three-decade bond rally finally come to an end? Would the US hit a recession?

Unlike any of our predictions based on a traditional approach to business and predicting, we now know that 2020 became the year where business, professional and personal plans were turned upside down, reshaped and put-on hold. The proverbial black swan had arrived.

As revealed in a new CEMS Guide to Leadership in a Post-COVID-19 World, to which I contributed, the COVID-19 pandemic has exposed deficiencies in the 20th Century vision of leadership, giving a rare opportunity to question the status quo.

So, what are the main lessons from 2020?

  1. Humans are enormously adaptive.  This is not an extinction scenario. The world is getting used to dealing with global human disaster which may become a recurring event. Life continues guided by new parameters.

  1. No sector or country is immune to rapid change. Just as the leveraged finance and equity markets ground to a halt during the Global Financial Crisis, we have seen a disruption in the financial markets (including M&A) in 2020, including a significant redistribution of wealth between sectors; think tech vs airlines and the hospitality industry. When a market is disrupted it has secondary and tertiary effects such as less work for accountants, lawyers, financiers etc.


  1. Location is not as important anymore. The belief that finance staff need to be based in one of the financial capitals to be effective has been forever altered. Pursuing a career in finance from anywhere is becoming possible. However, it’s likely that over time, financial controls and human interaction will move the work model back towards the traditional office approach, as work is a critical sanctuary for people. While working from home may allow more time for family, chores and sports, it is mainly effective for people who already have their internal and external networks. For junior employees it presents a notable challenge as they may be forced to spend their formative years without a chance to really build their networks.


  1. Change is likely to be lasting. The opportunity for alternative finance and tech focused providers is enormous and 2020 will accelerate this shift. For example, many retail banks are providing rather poor customer service, blaming the pandemic. Even the most loyal customers will be heading elsewhere. For recent graduates and current students this is a major shift; future winners and key employers may not be names we are used to seeing in the headlines.


  1. There will be a spotlight on leaders with visionary strategy and understanding of the operations. 2020 showed many politicians and business leaders behaving like they were playing a game of snakes and ladders, rather than executing a thought-out strategy. The next wave of thoughtful leadership is urgently required.


  1. Collaboration leads to success. The definition of a pandemic is an infectious disease prevalent worldwide. A global problem requires a collaborative solution rather than each country and industry on their own. Quoting Steven Riley, professor of infectious disease dynamics at Imperial College London: “Once you have the knowledge and you share the knowledge, then you are able to take measures to push transmission much lower”. This principle is transferable to management education. In a world more complex than ever, investing in a degree is hard currency. Combined with the full global alumni network, corporate partners and schools, CEMS is capital that doesn’t depreciate.

  1. Resilience has become a watch word. Saint-Exupéry’s quote resonates with me: “If you want to build a ship, don’t drum up people to collect wood and don’t assign them tasks and work, but rather teach them to long for the endless immensity of the sea.” We are in a new paradigm – so prepare for the next change. For COVID-19, while we hope that the vaccine will soon upon us, the broader long-term positive challenge remains.
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