Back Office Insider: Lack of belief hinders private banks' progress.

(From Professional Wealth Management (PWM))

Byline: Roxane McMeeken

As private banks and other wealth managers find themselves jostling for increasingly savvy and choosy clients, you would think that anything that could put them above the competition would be grabbed with both hands. Technology offers one route to salvation. From the back office to computer systems used in the branch, technology has the potential to bring wealth managers long-term cost savings, greater efficiency and enhanced customer service. But not everyone is a believer.

"Wealth managers do not make use enough of the technology available in the marketplace," says Nuyan Dunsford, global account manager at Odyssey, the front and middle office solutions provider. "They either don't have it or they have it and don't make full use of it."

In the branch, technology-based tools can revolutionise the client relationship manager's approach to building the customer's investment portfolio. A massive 90 per cent of administrative work can be cut out if a machine, rather than a human being, carries out this process, according to Swissrisk, a Zurich-based provider of portfolio management technology to private and retail banks.

But according to Ms Dunsford, much portfolio management is done manually. Ideally, the investment process would be fully automated, from the construction of the model portfolio right through to sending the orders to funds in order to make the portfolio a reality. Few banks, if any, are at this stage, according to Ms Dunsford. The result is less efficient processes, higher administrative costs, a higher number of errors and a lower level of customer service.

Automatic portfolios