Private banks increase their technology investments to improve their high-touch offerings for the wealthy.
A quick look at global investment performance in 2024 proves the trend that the rich are getting richer. Their preferences for wealth management are also becoming more individualized and sophisticated.
On the other side of the equation are the global private banks, which see the current mixture of massive wealth generation and increasingly complex demands as a generational opportunity. “Private banks are in a good place because they’re already ahead of the race when it comes to serving all sides of the client’s balance sheet, something that the financial industry as a whole is moving toward,” says Will Trout, director of securities and investments at Datos Insights.
Yet, reconciling growth and individualization may prove trickier than it seems, from a business standpoint. This may force banks to rethink the structure of their services and the breadth of their product offerings.
David Frame, CEO of J.P. Morgan’s U.S. Private Bank, notes that while technology will help banks scale their services more easily, top-level advisory will remain the main asset in this race. “Maintaining an intimate service offering while scaling globally requires a balance of technology and human touch,” he says. “We leverage digital platforms to enhance accessibility and efficiency while ensuring that personal relationships remain at the core of our service.”
George Walper, managing principal of strategic research at CEG Insights, agrees, adding that “as wealth increases, so does the need for more and higher-level advisory, which, for the banks, often translates into more costs.”
“Having a team of leading market researchers is crucial. They provide insights that help us understand market trends, client needs, and emerging opportunities. This knowledge allows us to tailor our services and strategies to meet the evolving demands of our clients,” agrees J.P. Morgan’s Frame.
“Scaling effectively means focusing on core strengths while remaining adaptable to individual client needs,” explains Daniel Wild, chief sustainability officer at J. Safra Sarasin. “This is a delicate balance: Growth is essential, but private banking thrives on personalization and agility in meeting each client’s needs.”
Moving ‘Upmarket’
Private banks have been targeting clients with more than $25 million in investable assets—or moving “upmarket,” as the industry jargon goes—to sustain growth while balancing the scale and personalization of their services. “Banks are moving upmarket because that’s where the margins currently are, considering all the demands they need to attend to in their journey toward a more holistic offering,” explains Walper.
But it’s not about margins only, notes Dennis Gallant, an independent adviser for the private banking industry. “As advisory becomes more holistic, it’s…
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