Putting the future of wealth management under the microscope

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Putting the future of wealth management under the microscope

Article published in Finanz und Wirtschaft, April 28, 2018
By Annika Falkengren, Managing Partner, Lombard Odier Group

Whether we like it or not technology is changing our personal and professional lives fundamentally and irrevocably. The wealth management industry is no exception. Rapid technological developments have, and will continue to change how we work, communicate and interact with our clients. The old certainties are being demolished, and it is becoming increasingly clear that the ability to marry the best of traditional, bespoke approaches with sustainable investments and state-of-the–art technology will be crucial. In short, we have to rethink the world of wealth management.

Social media has revolutionized and personalized communication, and it offers valuable lessons for those willing to learn. By connecting with clients on a more personal level, we will be able to meet their needs and preferences far more effectively. If we don't, we risk losing them. Today, we often segment clients based on their age, profession, geography and net worth. But to go deeper and really understand a client's interests and motivations would enable us to serve them far better.

The big data approach has already proven itself to be very effective. But it also carries with it some distinct risks concerning the ways in which this knowledge is used. That's why, amid all this talk of rapid change, it is important to emphasize that client confidentiality and an organization's integrity and reliability have an important role to play in this brave new world.

Those who have been reluctant to adapt to the new paradigm might feel vindicated following the recent scandals surrounding big data and social media. However, it is dangerous to think we can turn the clock back. The digital revolution is not a passing phase. As with anything new, there are teething troubles, but it is clear that client demand for state-of-the-art technology and safe and secure ways of interacting will only grow.

The giant tech companies and others are circling the financial industry. They see business opportunities, and they see the transformational potential of what they know best – big data. To stay ahead we must use what we have, a deep understanding of our clients’ needs, our unrivalled investment expertise, and technology that enhances our offering. Technology is a key pillar of Lombard Odier’s business model, and over a third of our employees are technology specialists who search constantly for ways to enhance the digital user experience and investment execution excellence. Quality speaks for itself, and that is illustrated by the fact that our leading banking technology is used and valued highly by other financial institutions.

The good news for our clients is that we remain fully committed to the personal relationship and excellence of service approach that our clients have long valued, often over many generations. At the same time, we are always looking to enhance these relationships by harnessing the power of cutting-edge technology and innovations that create value for our clients. For instance, we recently completed our first blockchain bond trade. And our choices are always informed by applying what we call the client lens. Put succinctly, we believe that what is good for our clients is good for us. Indeed, for over a quarter of a century, we have been investing in technology, and those investments are bearing fruit as we now operate a single, global infrastructure that gives our clients what they demand, a secure and powerful platform for financial management.

As a banking Group that has successfully navigated two centuries by harnessing innovation, we know that the world changes constantly and we must embrace these changes for the good of our clients. And it is especially important to ensure we remain relevant for future generations, many of whom will have made their wealth in the technology industry. This will not mean that our clients will soon meet a Lombard Odier private banker called Siri. Our investment expertise, global footprint and commitment to the personal touch will always differentiate us, and we will use technology to support and enhance our relationships.

In an increasingly competitive market the winners will be those who can identify the optimal balance between traditional approaches and secure cutting-edge technology to give clients what they demand. And what better way to identify this optimal balance than through a highly polished client lens.

Important information

This document is issued by Bank Lombard Odier & Co Ltd or an entity of the Group (hereinafter "Lombard Odier"). It is not intended for distribution, publication, or use in any jurisdiction where such distribution, publication, or use would be unlawful, nor is it aimed at any person or entity to whom it would be unlawful to address such a document.

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