Snippet: I imagine most of us would love to be a high-net-worth (HNW) individual, which means we’d have a cool $1 million or more in liquid financial assets floating around. Just imagine what that lifestyle would look like – a fancy mansion would be home, you could jet off to Paris for a spot of lunch, stay at the most exclusive hotels, and the horsepower in your garage would be the envy of any stable.

I imagine most of us would love to be a high-net-worth (HNW) individual, which means we’d have a cool $1 million or more in liquid financial assets floating around. Just imagine what that lifestyle would look like – a fancy mansion would be home, you could jet off to Paris for a spot of lunch, stay at the most exclusive hotels, and the horsepower in your garage would be the envy of any stable. Private yachts and islands? $1,200 margaritas sipped through gold straws? All just part and parcel of everyday life for this elite group. 

Banking with the 1%

Of course, to maintain this lifestyle, HNW individuals need to look after their assets, which probably includes a heady, complex mixture of investments, relatively illiquid assets such as businesses or real estate, trusts or other forms of inheritance, and of course, cash. They’re going to need a private bank with a financial management team comprising a private banker, an investment adviser, a portfolio manager, an estate planner, and a tax adviser, amongst others. However, the buck will still stop with the person holding the purse strings; they have to make the important decisions, and need to be informed about bigger portfolio movements. So, how does a bank communicate with such individuals, and how can they, in turn, communicate with their bank? Remember, these aren’t people with a 9-to-5 office job!

Now what happens if these HNW individuals are also millennials? Private banks often cater to generations of families, and over the next few decades, as baby boomers begin to pass their wealth down to the next generation, we will witness the greatest wealth transfer in history. In addition to this wealth transfer, there’s a lot of wealth being created as younger, wealthy individuals become more involved in rapidly growing sectors such as tech, energy, and healthcare. Just think about how much money some YouTube, TikTok, and Instagram influencers are making.

A new private bank in the UK has jumped into this private-jet slip stream to focus exclusively on this niche group. Bank 220 is designed for the Generation Z of YouTubers, high-net-worth individuals and child stars. Gen Z has never known a world without smartphones, social media, and instant access to information.

However, unlike Bank 220, most private banks are several hundred years old, and carry with them the weight and gravitas befitting such institutions. Often perceived as old-fashioned and stuffy, private banks must reinvent themselves to stay relevant for a younger generation. The challenge is to maintain their history– which carries an inherent value and is part of the brand’s prestige – while modernizing their outlook. Coutts, one of the world’s oldest banks, is on a mission to take that crown. One of the measures being deployed to win millennial clients is mobile apps, which millennials have embraced as a way to interact with their financial institution. They use technology to communicate with their friends, colleagues, and coffee shop, so why should their banker be any different? 

What’s a private bank to do?

To engage this younger and richer segment, banks will have to change how they communicate. The one-way missives need to give way to more informal and engaging two-way communication. And the “world is my playground” attitude means that for banks, an “always on” mentality is a must. The latest millennial millionaire trying to close a deal in New York doesn’t really care whether their private banker in London is still asleep.

A bank might already have an app, but how much relevant information can it really send through this channel? How engaging is the communication? Will the message simply get lost among the myriad of other messages our deal-closing millionaire is receiving from countless other institutions? The challenge is the same for all banks. The information they need to share is highly sensitive and confidential, and existing communication channels are simply overutilized and limited. A bank needs a way to secure its channels so it can engage more meaningfully with its customers. And engaged customers are loyal, happy customers.

READ: The rules of digital banking engagement

Be smart

What if there was a messaging service that combined instant communication with banking-grade security, and on-the-go self-service functionality? That’s what Entersekt’s smart messaging solution does. It’s a powerful new way to start more meaningful relationships with the modern digital consumer. HNW individuals are used to having the best – quality engagements, personalized communications, and guidance they can actually use.

Smart messaging enables two-way communication, through an unspoofable channel, allowing banks to keep their consumers informed and secure with personalized and interactive experiences. Additionally, discrete services allow various levels of engagement depending on the level of urgency, helping to build a sense of trust.


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New-generation investors drive demand for digitization at private banks hot topic

Melanie Maier

PRE-SALES SOLUTIONS LEAD DACH AND CENTRAL EUROPE

Melanie is focused on helping financial institutions and enterprises achieve compliancy through strong authentication and state-of-the-art apps security, while simultaneously enabling new digital experiences. Alongside her role at Entersekt, Melanie is country ambassador (Germany) for the European Women Payments Network (EWPN), where she helps to grow the network in order to bring more female voices and diversity to the payment industry.

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Entersekt is an innovator of customer-centric fintech solutions. Financial services providers and other enterprises rely on our patented mobile identity system to provide both security and the best in convenient new digital experiences to their customers, irrespective of the service channel. With us, they can concentrate on their innovation roadmap, while delivering intuitive, low-friction digital experiences to their customers.