With the emergence of FinTech and alternative ways of investing wealth such as cryptocurrency and robo-advisory, we asked our network how the private banking industry will further change and or adapt with these new offerings. This article uncovers the trends and motivations and explores how the industry has evolved. Here are some of their collective answers.
What are the new forms of banking that you've seen come up in the last couple years?
Given that there was a bull market happening in the last few years, there were other types of finance that have attracted investments. For example, crypto. The adventurous ones have gone and are still in it.
Another segment that is popular will be robo-advisory, where individuals engage in financial planning and portfolio investments through automated algorithms by sharing their investment preferences through a survey.
Do you see them breaking through traditional banking?
Definitely. Undoubtedly, there are people who will still prefer traditional banking due to the track record and wealth of experience of professionals in the industry. However, we are seeing people getting increasingly receptive and interested in other parts of investing their wealth aside from the usual financial products.
Is it a threat to traditional banking? Do you think there is a way it can be turned around?
To a certain extent, yes. It has expedited the increase in quality and quantity of banking services provided to attain wallet share of customers. To “turn around” the situation would be a very generic way to put it, but instead, organizations in this industry should continually adapt to the changing environment whilst focusing on doing what they do best, instead of simply creating new channels to model after non-traditional area of finance – this is a short-term fix, but if the investments for growth are not long term nor have a vision, this could be more detrimental for the business in the long term.
Why do you think people are keen to move into non-traditional banking roles/industries?
Yes they are. To attract talent, non-traditional platforms have dished out strong compensation packages to candidates. Given that it is an unsaturated market, progression plans are opportunistic as well
How have preferences changed over the years for the younger generation towards tech?
As the younger generation find themselves savvier with investment tools and have wider appetites for risk, we find them including investments in non-traditional banking very early in their banking/investment choices.
They tend to prefer a nimble, portable approach versus longer-term lock-ins as they prefer flexibility – the integration of tech creates more accessibility which allows the younger generation to achieve their preferences; hence the adoption of tech has been working well.
Is there a segment of the generation which prefers this new form of banking?
We’ve been increasingly seeing a trend of individuals and institutions adopting these new forms of banking as they might find the banking system slightly rigid with the increase in regulations and complexity. People who are early adopters and seekers of new ideas will find these alternative forms interesting, as well as the segment who are looking to further divest their assets beyond the usual methods.
How do you think hiring will change with this new trend?
It will be impossible to ignore the possibilities that more choices are given to candidates seeking opportunities as pay is competitive and the market is less saturated.
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