Why private banks must embrace change
Global HNWI growth rates accelerated significantly in 2016, with the HNWI population expanding by 7.5%, up from 4.9% in 2015.
This is according to an analysis of the latest Capgemini World Wealth Report.
Each of the big three markets – Asia-Pacific, North America and Europe – grew its HNWI population by around 7.5% and HNWI wealth by about 8.2%, representing large leaps in both North America and Europe and a slightly decelerated growth in Asia-Pacific.
Certainly, the private banking industry remains attractive, but it also faces short-term headwinds, which include:
- Increased regulation, tax transparency and investor protection;
- Enhanced client sophistication, with the need for price transparency and a trust and loyalty deficit
- Intergenerational wealth transfer and next-generation engagement
- And finally rapid technology innovation, such as the emergence of robo-advice and digital wealth management services
These disruptive forces are reshaping the industry so that no player can afford to stand still.
Digitalisation also means the rulebook for private banking wealth management is rapidly changing.
It is therefore essential for private banks and wealth managers to devise a roadmap for the future to ensure a lasting success.