MAPPING THE WAY TO WEALTH MANAGEMENT 4.0 Wealth Management Digest 2018 PRIVATE BANKING’S FAST EVOLVING TO MORE AGILE, BUSINESS EXCELLENCE, MARCH FORWARD INDUSTRIALISED OPERATIONS THE UTOPIAN ASPIRATIONS P.6 AND TECHNOLOGY OF WEALTH MANAGERS P.12 P.20 EDITORIAL NOTE At Orbium, our guiding principle is to focus on what is most important to our clients - their success. This priority continues to guide us as we evolve our capabilities to support our clients to successfully manage the unprecedented industry disruption. We help navigate these changes by providing a combination of core banking and digital business transformation services, business and regulatory consulting, our own software products along with those delivered through our selected software partnerships. to share these to help inform executives on the key emerging industry trends, challenges and opportunities. Our core banking systems implementation and services These insights reflect our growing capabilities. They benefit from our strong partnership with Avaloq and the include our C-level survey findings, which show the expertise of our delivery team. Over the past year, we have industry is now moving into a new “4.0” era. Success delivered successful go lives across multiple geographies for wealth management firms will be about adopting in both Europe and Asia. We have further developed our more balanced models across three key areas- meeting management consulting capabilities to support clients new customer needs, developing new capabilities achieve results with their key change programmes. and being more effective in complying with tougher regulations. This will be enabled through implementing Underpinning these activities, we invested in effective the right combination of technology and developing more thought leadership initiatives to provide informed agile ways of working. Our digest provides additional insight, foresight and benchmarking to help our clients perspectives on each of these themes. assess where they stand and to stay on top of the industry changes. Our signature wealth management At Orbium, we believe that success is a consequence C-level survey of 50 wealth management firms across of many factors - culture, people, shared expertise, Europe and Asia provided a view of the current state partnerships and strong relationships. Only when all and evolution of the wealth management industry. It of these are aligned for mutual benefit is the future also provided a future roadmap for what it will take to assured. This philosophy embodies our way of working be a high performer in this new era for the industry. The with our clients to achieve their success. findings have proven insightful and have been shared at numerous international industry conferences, executive We hope you find this digest both timely and insightful. round tables and at one-to-one discussion sessions. In the quest to support dialogues and thought leadership in the industry, Orbium is pleased to share our first annual Wealth Management Digest 2018, a curated collection of insights, covering business, regulatory and Samir Gherbi technology trends authored by our experts. We wanted Partner 2 Wealth Management Digest 2018 CONTENTS Editorial note 2 Introduction to Orbium 4 Getting to banking 4.0 6 CLIENT FOCUS Private banking’s five new tribes 8 Client focus and data are forging the path for new banks 10 AGILITY AND INDUSTRIALISATION Evolving to more agile, industrialised operations and technology 12 Launching a new private banking business in six months with Avaloq: 14 Industrial Bank Co. Ltd (CIB) Best practices in suitability implementation 16 LEVERAGING NEW CAPABILITIES AND CHANNELS Business excellence, the utopian aspirations of wealth managers 20 What destiny for financial intermediaries during a core system transformation? 24 CHANGE MANAGEMENT Achieving an Agile approach 26 Wealth Management Digest 2018 3 INTRODUCTION TO ORBIUM EXPERTS IN WEALTH MANAGEMENT TRANSFORMATION Orbium has an impressive reputation as a specialist, global technology and management consultancy, helping banks achieve a balanced and integrated business model fit for private banking and wealth management 4.0. Founded in 2004, Orbium sits at the intersection of To do this, Orbium assesses where a bank is today, and technology, regulation and management consultancy to where it wants to go. Orbium focuses on three critical offer a differentiated service proven to help banks succeed. areas: client focus; agility and industrialisation; and leveraging new capabilities. Consistent across these Led by seven partners, Orbium is an Avaloq premium specialities and instrumental to their success is change implementation partner, has 14 offices around the world management. Orbium then build the roadmap and and employs more than 500 staff working on some of deliver these strategic objectives. the most important transformation projects in private banking. Together, Orbium helps banks navigate the CLIENT FOCUS change sweeping through their sector to ensure their It’s important that when a bank starts its journey towards long-term futures. private banking 4.0 it has a clear business plan. This will centre on which client groups it wishes to serve. Orbium takes a holistic view. Drawing on our technology heritage and management-consultancy experience and The traditional private banking client has been working with a small group of trusted specialist partners, supplemented by five new tribes – emerging markets Orbium develops comprehensive solutions for each entrepreneurs, millennials, modern entrepreneurs, high individual project. Increasingly, these are benchmarked net worth female investors and rich professionals. Each against insights gleaned from our Wealth Management of them demands specific specialisations from a bank. C-level survey. This, with Orbium’s proven methodologies Few, if any, can serve them all equally well. This means and proprietary software solutions, along with committed choosing which tribe (or tribes) to target and building the and talented teams, allows Orbium to deliver projects on business model to fit. time and on budget, resulting in 90 per cent of Orbium’s clients returning. A BESPOKE APPROACH TO OUR JOB IS TO ENSURE FUTURE-PROOFING YOUR BUSINESS While all banks are trying to achieve transformational THEY TAKE THE RIGHT change, Orbium understands that all are starting from COMBINATION OF ROUTES different places. Orbium knows that each needs to take its own transformational journey. Orbium’s job is to AND THAT THE WHOLE BANK ensure they take the right combination of routes and that the whole bank completes the ride. COMPLETES THE RIDE. 4 Wealth Management Digest 2018 as efficiently as possible to protect margins and profitability. This means developing the right platform Revenue Standardisation and introducing standardisation and automation enchancements automation where possible. Functions such as tax reporting and regulatory compliance can be automated along with investment suitability requirements, bringing not A Client ice gi only lower cost but also lower risk. rv lit Banking service e y platforms s n & interaction io i & t n s ia d u t u LEVERAGING NEW CAPABILITIES c n s o e t f r r The technology that delivers all this can do so i a t e f l n f i i s much with careful planning and forethought. e i d a l t C i This is where it’s important to examine new o Smart n Empowered leadership Regulatory capabilities and channels to make sure the relationship C t compliance manageres h n bank is maximising potential. a e ng m e manage Orbium looks to providing flexibility and agility N ls ew e to allow for scale and growth, enabling a future c nn ap ha abilit s & c proofed roadmap. Orbium also recommends ie Data Unified digital customer fintech and regtech partners that complement the proposition insights offering from the bank’s main software vendors, Sourcing extending the scope of the transformation to cover partnerships niche but important areas such as fraud mitigation, portfolio analysis and the launch and delivery of new products. Just as important are data capture, storage and analytics capabilities. For example, women often want communication without jargon and prefer to take a holistic view of their financial CHANGE MANAGEMENT situation. Relationship managers need to be trained Finally, Orbium make sure that the transformation isn’t and equipped accordingly. Similarly, banks looking to limited to the techies – that the whole bank comes along attract rich professionals need to be able to deliver first- for the ride. Orbium recommend adopting the Agile way of class cross-border advice, global data warehousing and working – a set of principles that helps create a dynamic dynamic tax reporting. workplace, promoting trust, autonomy and responsibility to foster innovation and value creation. Agile is about AGILITY AND INDUSTRIALISATION encouraging people to try new things and be unafraid of This is all about preparing the bank for delivering the failure – a critical mindset when you’re trying to transform services – existing and new – at the required scale a traditional player into a digital private bank 4.0. Wealth Management Digest 2018 5 GETTING TO BANKING 4.0 PRIVATE BANKING’S FAST MARCH FORWARD by Ian Woodhouse Head of Strategy and Change [email protected] Private banking has undergone titanic change in the past decade, with more to come. We identifiy the forces shaping the future of the industry. The 20th century was one of tumultuous change for just recurring. MiFID and its like were drafted to increase about every industry – from manufacturing to retail, transparency and accountability. The aims were laudable construction to health, journalism to travel. But not but expensive to implement. They were also potentially private banking. This most traditional of services quietly ruinous if a bank failed to comply. went about its business unconcerned by the arrival of mass communications, the internet, digitalisation and In response, the industry embarked on a round of more. At the start of the century we were still very much mergers and acquisitions to shore up balance sheets, at private banking 1.0 (PB 1.0).