As an industry that stayed away from the digital revolution for years, wealth managers are now increasingly investing in new technology and talking about it. In the last two years, there has been a mindset shift – safe to say – where CEOs of the oldest private banks have openly spoken about the importance of going digital for their organisations. Robo-advice has become more commonplace and the advent of artificial intelligence is creating unforeseen opportunities.
I am certain there was a lot going on behind the scenes on the technology front that many private banks didn’t openly talk about, unlike their retail banking counterparts, but even the most stoic traditionalist private banker, perhaps, has been converted, or at least convinced, into thinking that there is no ignoring the digital wave.
At a time like this a new bank that decides to launch without any digital channels and not much of a marketing push stands out. That is exactly what Hampden & Co. – the Scotland-headquartered private bank that was the only new entrant in the UK private banking market in over 30 years – did when it launched in 2015. No fancy gimmicks, no nifty digital propositions – purely relationship-based private banking.
The private bank has since launched internet banking facilities, but I had thought that in these two years it would have also had a mobile banking app (even though it is in the offing), some in-depth analytics tools and more. Thinking about it, in these last two years private banking giants such as UBS and Coutts have launched robo-advice-like capabilities, which is a departure from their traditional approach but a sign of evolving with the times. But for Hampden & Co., the priority has been to grow its business organically – through word of mouth and high quality of service.
Perhaps for Hampden & Co. being strong on ‘digital’ has meant having a stable and scalable core banking system. A lot of ‘going digital’ is actually what goes on in the bank’s middle and back offices. How secure, fast and efficient those processes are significantly dictate a majority of what goes on in the front end. Hampden & Co.’s decision has been to use Oracle’s cloud based core banking platform to give it adequate ‘future proofing’ and an edge against its competitors who have decades-old legacy IT infrastructures.
On the retail banking front, most challenger banks are digital-only (think Atom Bank, Starling Bank, Monzo…) but on the private banking side this challenger bank is taking the opposite approach. It isn’t promising revolutionary capabilities, it isn’t sticking its name and logo on every advertising space available, it isn’t launching branches across the country. It is banking on what has worked all this time – strong relationships and sheer quality of service. So far so good but time will reveal if this approach is refreshing or irrelevant.