More and more wealth managers are offering a mobile app tailored to wealthy clients - a trend which is particularly apparent in Asia, according to global study.

The number of wealth managers that provide a mobile app exclusively for high net worth clients rose considerably between 2015 and 2016, although certain teething problems persist, a global study suggests.

The report, entitled Mobile Apps for Wealth Management 2016 – The Next Level of Digital Service: Personalized Apps for Your Most Valuable Clients, is based on a study of 60 mobile apps from 30 global wealth managers by Switzerland-based MyPrivateBanking Research. An overwhelming 82 per cent of the entrants this year offer their wealth management clients a dedicated mobile app, up from 63 per cent in 2015.

This is “a long overdue development,” said Rosalia Engchuan, an analyst at MyPrivateBanking Research. “In previous reports we have seen that many financial institutions have one app for their retail and wealth clients. However, such a one-size-fits-all approach cannot offer exclusive value to HNWI clients. The whole idea of wealth management is about exclusive, personalized and dedicated service. This needs to be reflected in the apps as well.”

UBS was crowned winner of the pack, with a score of 69 out of a potential maximum of 80 points, and leaping forward from ninth place in 2015. Closely behind was: Credit Suisse, which, with 65 points, retained second place from last year; BNP Paribas, which, with 64 points, slipped down the ranking from first place in 2015; DBS, up from seventh place with 61 points; and SocGen, with 58 points but down from fourth place.

The leading wealth managers were praised for their offerings of remote channels for client-advisor interaction, as well as advanced personalization capabilities. However, the report also identified several “weak points” – namely a “lack of core functions” such as interactive tools for portfolio analysis (offered by just 11 out of 30 wealth managers) and the fact that less than half enable direct contact to a personal advisor. Features for client retention and marketing were also “sub-standard,” the firm said, with only eight wealth managers offering access to an exclusive client magazine. Meanwhile, only seven provided “personalized, targeted push messages.”

In terms of regional trends, Engchuan said the firm is observing “the rise of the Asian market for wealth management mobile apps,” for several reasons. “Firstly, Asia’s HNWI population is growing with the highest rates globally and the Asian market has become very attractive for wealth managers,” she said. “Also, Asian clients are more tech-savvy. According to the World Wealth Report, Asia is the only region in the world where wealth clients already favor having digital contact with their wealth managers and 82 per cent of HNWIs expect their wealth management relationship to be entirely or mostly based on digital interactions within the next five years.”

A “true” app

MyPrivateBanking said offering a “true wealth app” begins with an exclusive design and color scheme, a personalized greeting when logging in, direct access to an advisor and access to relevant and inspiring content.

“The whole business model of wealth management is transforming as a result of the technical opportunities brought about by the digital revolution,” the firm said. “Wealth managers should see this revolution as an opportunity and embrace the possibilities for interacting with clients on a whole new level.”

It added: “The whole idea of an omni-channel strategy is to offer clients the opportunity to choose how they will interact with their wealth manager. Wealth managers need to provide the infrastructure to enable such an omni-channel experience, for instance through seamless integration of the social media platforms and mobile apps.” According to Engchuan, sophisticated wealth apps should also enable clients to build “hypothetical portfolios” and receive product recommendations based on their financial situation.

Costs and regulation

The cost of launching and maintaining mobile apps vary strongly and depend on a number of factors, including operating systems and back-office integration for trading and payments, Engchuan explained.

“In order to build a targeted app that users will love they should ideally be integrated into the creation process,” she said. “Some wealth managers have launched co-creation labs, others seek for feedback on demo versions from a selected group of test users. Then the costs also depend on the number of markets and countries you wish to cover. Generally, initial investments will start somewhere at a six-digit amount in addition to a yearly budget that depends on what wealth managers want to do with their apps. Some big players have budgets of several million dollars for mobile development. In the end these investments will pay off.”

Meanwhile, regulatory requirements depend on the market where wealth managers intend to launch their apps, Engchuan said: “There are regulations on the kind of information that can be provided via mobile apps, such as it is also the case for websites. In addition, there are also regulations with regard to data protection and collection of personal data, such as location based data. Big data that can be collected through mobile apps offers amazing opportunities for personalized and targeted communication but wealth managers need to make sure that information is only collected with the approval of the user. Providers should communicate that information is only collected to improve the service quality for users.”

The following firms were analyzed for the study: ABN Amro, Barclays, BNP Paribas, BNY Mellon, Charles Schwab, Citi Private Bank, Coutts, Credit Suisse, Danske Bank, DBS, Deutsche Bank, First National Bank, Goldman Sachs, HSBC, ING, Investec, JP Morgan, Merrill Lynch, Morgan Stanley, OCBC, Pictet, RBC, Société Générale, Standard Chartered, TD Bank, UBS, Unicredit, US Trust, Vontobel and Wells Fargo.