Big data is wasted on the ultra wealthy
Private banks need to be wary of using analytics as a crutch to build client relationships
The mention of big data seems to be ubiquitous in the financial services of late. The benefits for the private banking industry have often been touted.
However, using big data to improve relationships with ultra high net worth individuals (individuals with more than $30m in investable assets) is largely pointless and has the potential to even damage relationships.
Big data has the advantage of being able push products onto customers in a more bespoke fashion – on the basis of consumer spending habits, for example. This is great for use with the mass market, but falls on its feet when trying to impress the world’s wealthiest individuals.
UHNWIs are incredibly sophisticated and they cannot be advised or sold products in a blanket fashion. Although big data’s use is somewhat of a custom approach, algorithms can miss the bigger picture. They lack the emotional intelligence to deal with complex financial decisions.
Private bankers and wealth managers need to foster deep personal relationships. Of course this can, and should, be supplemented by technology. But if a client was to receive emails from an automated email as opposed to a personally drafted email or call, that would give a rather negative impression.
Some of the major players in the private banking sphere have echoed concerns over being overly reliant on big data. Investec Private Bank recently launched it #MoreThanData marketing campaign, which suggests that service providers are using big data and analytics to apply “broad brushstrokes to paint a picture of their customers”, thus not delivering a truly customised offering.