Why private banks must use social media to make good connections

Private banks have been slow by all accounts in adopting social media, but they are increasingly recognising the opportunity it presents.

Certainly, private banks and wealth managers will have to operate like online platforms to woo millennials.

The private banking industry is making progress in leveraging social media and creating communities and platforms where clients can engage and communicate.

For example, private banks are increasingly using platforms such as Facebook, Twitter, LinkedIn and Instagram to create content, branding and engagement opportunities.

In the case of BNP Paribas Wealth Management, it has created a community called Leaders’ Connection, which connects eligible investors to facilitate co-investments and allow them the chance to share their views on investment opportunities.

UBS Wealth Management also recently noted that managers will have to operate like online platform firms if they plan to offer financial advisers a broad toolkit to help customers, and especially millennials.

Millennials

Millennials are ahead of other generations in demanding digital communication, constituting 49% of on-demand consumers. In contrast, only 22% of individuals above 55 years of age make this demand.

Millennials are also more active on social media, with 47% of them using the platform as against 19% of non-millennials.

The findings are significant considering the fact that millennials are expected to be worth up to $24 trillion by 2020. In North America alone, $30 trillion of wealth is expected to be transitioned to millennials and other heirs between 2011 and 50 by baby-boomers.

Also, millennials start twice as many businesses compared to baby-boomers, and are almost twice as likely to withdraw from investments facing sustainability problems, the whitepaper revealed.

UBS Wealth Management global CIO Mark Haefele said: “In a more socially connected age, wealthy millennials and other private clients have expressed growing interest in innovations like digital platforms and sustainable and impact investing.

“This gives wealth managers and financial advisers a renewed opportunity to improve their digital capabilities as well as using private capital to help make the world a more sustainable place.”