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IT Management Partner St.Gallen AG (ITMP) | Oberer Graben 6 | 9000 St.Gallen, Switzerland

© 2017 by ITMP

Banking Business Models for Future Generations

Challenge

One of the biggest banks of Switzerland was realizing the need to expand their product portfolio for future generations. Looking at the general financial market, banks are having troubles to gain the attention of the young crowd. Especially, the bonds of well-established wealthy clients are hardly transferred on towards the next generation.

 

A challenge has been defined to: “Reinventing wealth management for the younger Ultra-High-Net-Worth (UHNW) generation”. Thereby, not only focusing on digital, mobile and social aspects of banking and advice but to go deeper and to work on the relationship between bank and the younger UHNW generation itself.

Approach

First, we segmented the task and successfully research the needs, hopes and desires of the bank`s clients and prospects of the future. Our research showed that this very particular group of young people might have all the possibilities but at the same time they do not necessarily know which ones are the right for them. It also became clear that there is no need for them for new financial products, but that they rather need assistance in how to use their privileged situation to become the well-educated and experienced individuals that they are expected to be in the future. The persona Amber was created to guide the further ideation and prototyping.

Persona Amber - Excerpt - A UHNW Individual


 

However, the current banking portfolio does not offer the skillset in that area to help them make these decisions. The bank`s core competency lies in wealth management and financial advice which only becomes important at a much later stage when the young UHNW individuals inherit the money from their parents. So the big question was how we can create a context where the bank gets to interact with them and show their knowledge before wealth management even becomes a topic.

 

In the ideation phase many different approaches to tackle this challenge came up. We decided to work on a matching service through which the bank connects young UHNW individuals to interesting partners, thus providing service “beyond banking”. By doing so, partners bring interesting experiences into the relationship while the bank can distinguish themselves as a facilitator and coach that accompanies the young UHNW individuals throughout the whole process.

Outcome

 

The service we built coordinates all these partner activities. A core element of the service is an especially designed platform where young wealthy clients can coordinate meeting partners, choosing their preferred experiences and keep track of their progress within the program. The possible partners are carefully curated and can in return benefit from the network and funding of the people they are matched with. It is a win-win situation for both that puts the relationship first and funding and profit second which results in a very different dynamic from other investment platforms. Furthermore, the service integrates a gamification aspect where young people can choose to complete different sets of experiences, such as “summer BBQ with the CEO”.Persona Amber - A UHNW Individual


 

However, the current banking portfolio does not offer the skillset in that area to help them make these decisions. The bank`s core competency lies in wealth management and financial advice which only becomes important at a much later stage when the young UHNW individuals inherit the money from their parents. So the big question was how we can create a context where the bank gets to interact with them and show their knowledge before wealth management even becomes a topic.

 

In the ideation phase many different approaches to tackle this challenge came up. We decided to work on a matching service through which the bank connects young UHNW individuals to interesting partners, thus providing service “beyond banking”. By doing so, partners bring interesting experiences into the relationship while the bank can distinguish themselves as a facilitator and coach that accompanies the young UHNW individuals throughout the whole process.

Personalized web-interface featuring selected start-ups.


 

By completing these experiences, the clients are not only encouraged to develop the relationships with their selected partners but also can collect rewards on their personal pages thus gaining a sense of pride and fulfillment through using the service. However, it is much more than just the platform. Although connecting is a lot easier in a digital way it is the service’s main goal to take these digital connections and turn them into real life experiences with the partners and also with the consultants of the bank. Our research has shown, that the “normal” bank consultant should rather act as a coach for this generation. The coach thereby should understand the personal situation of the client and should react to it in an individual way. Hence, the relationship between client and coach is intensified.

Taking experiences offline: The tangible prototype


 

Therefore, we create a context where young UHNW individuals can experience knowledge and the bank gets the chance to start interacting with their young clients at a point where their competencies in wealth management are not needed yet. This early interaction strengthens the mutual trust and understanding tremendously and eventually results in long term customer loyalty.