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  • Writer's pictureKoen Vanderhoydonk

How banks manage your wealth today.

Updated: Mar 3, 2023

Wealth managers continue to face a wide range of industry variables, such as escalating regulation, emerging digital distribution channels, altering wealth demographics, fee pressure, and most recently, cyber security risks.


No one can ever save all of us from a plethora of industry variables that hurt our business, such as escalating regulation, emerging digital distribution channels, altering wealth demographics, fee pressure, and most recently, cyber security risks.

If you pick up the phone and call your wealth managers now, they will agree to this. It becomes more difficult to handle, preserve, and mine data as a result of these industrial breakthroughs' increased data volumes and complexity.


As businesses continue to expand and grow, amidst the health crisis we went through and how painful its aftermaths are, wealth managers' eyes to go global, improve sales effectiveness, and add Robo-investing capabilities, see the necessity for high-quality data availability.


What is wealth management?

Wealth management is a comprehensive service that assists helps mid- to high-net-worth clients build their fortune, control their exposure to liabilities, and come up with plans to pass their wealth on to their chosen heirs.

The main objectives of wealth management are financial security and the growth and protection of your money.


Who are wealth managers?

A wealth manager is a certified financial expert or a licenced professional who helps clients requiring wealth management assistance with their financial decisions.

Their offer a wide variety of services, such as investment management, financial planning, insurance sales, tax guidance, and estate planning.

As wealth managers, they aim for long-term wealth growth and the preservation of your finances.


What are some wealth management goals?

Since every client's needs and circumstances are unique, wealth management goals will change, and a qualified financial advisor will customise their recommendations.

Key client wealth management includes:

  • Establishing financial objectives and developing plans to meet those objectives

  • Assisting clients in increasing their overall wealth

  • Taking care of their finances and investments

  • Estate planning is the set of procedures for transferring one's fortune.


What is Private Banking?

Private banking often refers to a solution for high-net-worth individuals (HNWIs) that uses employees from a public or private financial institution to provide HNWIs with individualised attention and financial management.

It has a reputation for exclusivity and is only available to clients with sizable sums of cash and other assets that can be deposited into accounts and invested.


Benefits of Personal Banking

1. Clients of private banking never have to wait in line or deal with a teller to get services.

2. Large account private banking clients typically receive amazing rates and concierge-like care, ensuring them immediate access to the staff handling their accounts.

3. Allows cashing a check and transferring substantial quantities of money between accounts by a private banking customer by contacting the lead adviser managing his account.


What’s the difference between private banking and wealth management?

Private banking and wealth management primarily vary in that private banking does not usually deal with investing. The majority of customers who use private banking services open some sort of deposit account.


Financial advisers are among the wealth management team members who give clients advice on how to better their financial situation and help them invest money to get high returns. In other words, if you're interested in conventional banking services like deposits and loans, private banking can be a suitable fit for you. Wealth management may be the best option if you're seeking someone to assist you in managing your money and increasing your wealth.


Now that we are done putting context to each term, have you wondered how banks manage your wealth and read customer insights?

If you are working in the financial industry and you are curious about how to further your expertise, read on.


How customer insights can drive digital sales?

Financial institutions are moving away from the traditional demographic and geographic segmentation strategies in favour of hyper-personalization when marketing to clients, making data-driven customer insights even more crucial.


Here are four insights to boost banking sales:


1. Catch up with brand-new customer segments

By adding new, comparable customers to existing segments, banks can expand their customer segments for marketing campaigns.

This method allows banks to do this based not only on demographic or other static data but also on information on customer behaviour, spending patterns, and geolocation.

Machine learning systems analyse hundreds of different characteristics to find new members that can be added to the existing consumer categories.


2. Predict variables that can influence finances

The techniques used in this solution are based on a sizable collection of both strong and weak variables. The bank can assign worthwhile marketing to the insight because there is a high likelihood that a "zero-balance event" will occur soon.

Depending on the financial situation, possible follow-ups include sending an overdraft offer or some helpful advice.


3. Use a merchant programme that is well-targeted.

Several banks offer merchant programmes to better target banking consumers. However, these programmes frequently aren't exact enough.

This frustrates financial institutions and their respective partners. But this can be eliminated, and more satisfying outcomes can be obtained under a properly tailored programme.

A well-targeted merchant programme reveals when a customer is most likely to visit a business location and how much time they will likely spend there.

It can display the distance between a customer and a business as well as the ideal circumstances for getting in touch with them.


4. Find new customers for the current segments.

Seeing new, undiscovered segments can be done by mapping new customer patterns.

Data scientists can identify new client groups for banks to target based on criteria that have never been used or even thought of before with the aid of unsupervised machine learning techniques that can spot new lifestyle segments.

They may be brought about by a customer's changing behaviour or by life circumstances that place them in a new category of prospective clients.


Why use data science in the financial sector?


Assessing risk

Using machine learning algorithms, it is possible to forecast with great accuracy whether a person or business will be a risky investment while using their credit score and financial transactions.

This will determine whether this person or business can be trusted with a loan or if their application should be rejected due to poor credit history.


Financial trend forecasting

Forecasting supply, demand, and other important financial variables give businesses the knowledge they need to decide what products, services, and investments to offer.

Additionally, it enables them to give their consumers sound financial advice based on predictive algorithms.


Promoting diversity

Financial companies are obligated to treat every person equally, regardless of ethnicity, sexual preference, or gender, when algorithms are utilised.

This is because the customer's financial behaviour forms the basis of every decision. In terms of their capacity to qualify for items, this increases clarity for customers. It eliminates the possibility of discrimination, which is regrettably a likelihood with more subjective application procedures.


Task automation

Task automation boosts productivity and facilitates the work of analysts, managers, and associates in the financial services industry.

This is a major plus because applicants for goods and services no longer need to physically enter a bank thus improving customer satisfaction.

If they have their browser set up to save frequently-entered information like address, cell phone number, name, etc., they may also autofill the majority of their applications when they are at home and using the internet.


How does your business make advantage of consumer insights?

Every interaction you have with a consumer gives you important information about their wants and emotions. CX Network's 2020 analysis found that Insights from client input only rarely or never reach the business units that could benefit from them in 72% of cases. This only means that majority of businesses are overwhelmed by data and unable to use it to their advantage.

In order to complete transactions, banks use a variety of consumer information that they gather and validate. Any transaction involving money necessitates mutual trust and confidence on both sides.


Wrap up

You will find yourself in a world of problems if your finances are not properly managed. Financial mismanagement does not look well for a person or company's financial standing.

With how things change in the last two years, we must plan our financial security seriously.

It matters that we rely on data and customer insights to guide us when choosing the right wealth managers or financial institutions to run our funds.


Money management mistakes result in financial stress and, ultimately, debt. Everybody needs assistance occasionally.

The ultimate purpose of wealth management is to provide you with security and peace of mind so you can focus on the present and make the most of it.

As for banking institutions, it’s high time to rely more on data science and interpret customer insights properly.








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