Imre Rokob. Unlocking the Potential of the Y (and Z) Generation in Wealth Management

Transcription

1 Imre Rokob Unlocking the Potential of the Y (and Z) Generation in Wealth Management

2

3 We at Dorsum

4 Clients and Partners Our customers by sectors: Banks Asset Managers Brokerage Firms Insurance Companies Factoring Companies Pension Funds Partners:

5 Today s session: Are robo advisors a real threat for new generation customers or a trendy gizmo? Why hybrid advisory can be the answer? Ways to become digital hybrid advisor and to service future client base?

6 Are robo advisors a real threat for new generation customers or a trendy gizmo?

7 Battle of Generations Baby Boomers Born: Dedicated device: TV Financial decision: Face-toface ideally, but telephone and if required. Increasingly will go online if they can save time. Generation Y - Millennials HERITAGE born in Dedicated device: PC, tablet, smartphone Financial decision: Face-to-face, but information can come from digital source. Generation X Generation Z Born: Dedicated device: PC Financial decision: Online would prefer face-to-face if time permitting born after 2000 Dedicated device: tablet, smartphone, wearable technologies (augmented reality, gamification) Financial decision: Solutions will be digitally crowd-sourced HERITAGE

8 Generation Y - Millennials MILLENNIALS ARE 2.5X MORE LIKELY TO BE AN EARLY ADOPTER OF TECHNOLOGY THAN OTHER GENERATIONS

9 Generation Y - Millennials Mobile first attitude: 22.9 MILLION NUMBER OF BANKING APPS DOWNLOADED SO FAR, Millennials and money The unfiltered journey by Facebook IQ, Jan Consumer behaviour and expectations have been irreversibly shaped by digitally native companies the smartest banks are addressing this expectations gap, but the pace needs to accelerate. A RISE OF 8.2 MILLION IN ONE YEAR EY Financial Services - Europe The Way We Bank Now: World of change world-of-change-2/

10 Generation Y - Millennials Why are they so worthy? As a collective group, the Mass Affluent control more than $7.5 trillion in investable assets. BAI, Engaging and Retaining Mass Affluent Customers, 2014

11 Generation Y - Millennials Why are they relevant? Top priorities They are Planners 85% track and manage their money/budgeting 84% save for retirement 77% balance short and long term goals Merrill Edge Report

12 Generation Y - Millennials Why are they (digitally) important? Affluent Millennials are reshaping the future of the finance industry and forcing drastic changes to financial services providers business models and marketing strategies. Capgemini Evolution of automated advisors 2016 * Schwab, Fidelity, Vanguard, TD Ameritrade Source: Cerulli, BlackRock Global Corporate Strategy This material is not intended to be relied on as a forecast. There is no guarantee that estimated numbers will come to pass United States Affluent Millennial Research Study

13 Robo advisors ON AVERAGE, 59% OF MILLENNIALS GLOBALLY EXPRESSED COMFORT WITH ROBO-ADVICE, WITH 63% TRUSTING IT; WITHIN EUROPE, 70% WERE COMFORTABLE WITH ROBO-ADVICE, WITH 65% TRUSTING IT.* *Legg Mason KPMG Report: Robo Advice Platforms Will Manage US$2.2 trillion Worth of Assets by 2020

14 Robo advisors

15 Why hybrid advisory can be the answer?

16 Don t be a dinosaur, be a Hybrid. Given the high level of client demand and growing competition from non-traditional players wealth management firms must make it a high-level priority to develop a strategy for investing in automated advice. Evolution of automated advisors 2016 KPMG advises banks: The opportunity for banks is ripe, but you must act now to capture your share of the market. Otherwise your clients will eventually look for these solutions at other institutions.

17 Ways to become digital hybrid advisor and to service future client base?

18

19 Recipe for success - Ingredients Focus on innovation Use the latest technology Dedicated project team End user testing Be agile

20 @ Dorsum making innovative products is a must 1 Battle of generations Mobile first attitude Full robo is not the answer Wealth Management: 4 Hybrid case studies Automation where it is applicable Real time availability of the advisor Proactive approach from the advisory side Goal based advisory Innovation required

21 Digitalization in Wealth Management FOR MILLENNIALS DIGITAL SOPHISTICATION IS THE rd 3 MOST POPULAR FACTOR IN CHOOSING A WEALTH MANAGER Usage gap (%) Automated (Robo) advisory Podcasts/videos Chat Online Banking Social Media 61% OF MILLENNIALS SAY THAT DIGITAL INNOVATION IS A BCG Global Wealth Client Survey, 2016 Interest(%) Call for development No need for focus REASON IN SWITCHING A WEALTH MANAGER Mobile/app Strong call for development Continuation

22 Traditional players vs. Robo advisors Traditional Financial Advisory Firms Robo-Advisors: Pros: Personal contact during a phone call or a meeting Flexible, because you can make real-time decisions and not blocked by algorithm Wide-range of knowledge and expertise you can count on Pros: More cost efficient than traditional players Lower initial investment required Your rich level does not count, all clients are equal Excluding the emotional factor Cons: High level of entry fee Sometimes one for all products because of the company push Slow technology adopters Old fashioned customization Impersonality if your portfolio is not big enough Cons: The scope is limited, so no comprehensive financial planning Non individual goal and risk-tolerance profiling Overmuch automatic Limited set of funds you can invest in Impersonal: no chance to ask from a human

23 Dedicated project team

24 Use the latest technology

25 Use the latest technology

26 Virtual Advice

27 Chatbot in wealth management & financial planning

28 Imre Rokob Thank You! DORSUM CO. LTD. H-1012 Budapest, Logodi street 5-7. Phone: +36 (1)