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Report Says Private Bankers Failing To Keep Up With Customers' Online Needs

Philip Morton, Investors Offshore.com

21 February 2001

A recent survey undertaken by Forrester Research suggests that private banks are failing to meet the online needs of their clients, and that the internet is forcing a change in the balance of the client/advisor relationship.

The independent research firm, which analyses the future of technology change and its impact on businesses, consumers, and society, surveyed over 50 private banks and asset management groups globally, and found that only 16% of these felt that they were ahead of the game as far as the internet is concerned.

Many private bankers feel that the balance of power has shifted, and that far from being better informed than their clients in this area, they are being overtaken by increasingly web-savvy high net worth and mass affluent customers.

The bankers surveyed said that technology was now high on the checklist used by clients to select a bank, and that customers were more than prepared to shop around using the net if they did not feel that the services provided were up to scratch. As a result, many private banks have had to invest a great deal in providing top-flight web services in order to complement the services already provided.

The survey found that Fidelity, American Express and Merrill Lynch were all perceived as techno-savvy by the rich, with Charles Schwab and E*Trade coming a close second, and Wall Street giants such as Goldman Sachs and JP Morgan Chase barely making an appearance in the list.

Forrester's research claims that failure to bring the personalised, pampered private banking experience online is souring offline relationships. However, many private bankers have concluded that while the Internet does present them with a fairly sizeable challenge, their core business, managing large sums of money, still requires personal advice, and a high degree of human interaction. Michael Malinski, of Malinski Lawrence Consultants, took a pragmatic view of events when questioned for a recent Financial Times survey on the subject of the internet and its effects on private banking, reasoning that: 'It forces the private banker to become what he always said he was - an adviser and confidant, rather than an administrator and information gatherer.'

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