Industry set to face massive change
Australia’s private banking industry is on the verge of massive change as new competitors and technology invade traditional territory.
Australia’s private banking industry is on the verge of massive change as new competitors and technology invade traditional territory.
Deutsche Bank’s chief executive of asset management and private banking, Mi-chael Monaghan, says the long-established model of banking is fading fast.
Monaghan says the private banking market is in need of change - change forced upon it for survival.
“This is a market where the key participants are changing,” he says.
“The traditional offshore model is under increased pressure. Technology is revolu-tionising our traditional business models while revenue growth from existing cli-ents is expected to reduce. And the trend to new money and a new style of active investor is already clear. We are seeing rapid growth in private wealth creation, in-creasing globalisation and sophistication of markets, continuing fragmentation and new entrants.”
Monaghan says the current model for the private banks is facing stern competition from other banking sectors. Retail banks, for example, are now beginning to move in on traditional private banking territory.
Monaghan says the new models of private banking are expected to be technology-based to improve the client relationship using call centre technology, data mining technology and Internet capabilities.
“Private banking strategies must become more differentiated to reflect the new re-alities of technology and changing client demographics,” he says.
“The private banking market is no longer homogenous, and the needs of our clients are becoming more disparate as the focus shifts from traditional private banking to wealth management.
“As an industry, we will need to be even more client-centric and flexible towards our clients. Client retention must remain at the forefront of our strategy.”
But technology should not overshadow the needs of the private banking clients.
Monaghan says the new model needs to focus on the soon to be wealthy - those wealth creators whose net worth is still liquid.
Recommended for you
With an advice M&A deal taking around six months to enact, two experts have shared their tips on how buyers and sellers can avoid “deal fatigue” and prevent potential deals from collapsing.
Several financial advisers have been shortlisted in the ninth annual Women in Finance Awards 2025, to be held on 14 November.
Digital advice tools are on the rise, but licensees will need to ensure they still meet adviser obligations or potentially risk a class action if clients lose money from a rogue algorithm.
Shaw and Partners has merged with Sydney wealth manager Kennedy Partners Wealth, while Ord Minnett has hired a private wealth adviser from Morgan Stanley.
