Private banking is pursuing digitization without neglecting direct customer service

For years now, new technologies have been completely transforming the way banks relate to their users. You no longer need to take your booklet to your branch to view your transactions, wait in a queue to make transfers or leave your home to open bank accounts. Now, with mobile applications, you can carry out daily banking operations from a computer or smartphone.

However, private banking transactions, used for managing and investing large assets, has always required a particularly personalized service, with advisers who address investors directly to propose solutions tailored to specific needs. Even so, digitization offers interesting opportunities to this sector, especially for new generations of private banking customers who require a more technological, rapid and effective experience in asset management.

Most banks offering private banking services have made substantial investments in recent years to improve their technology, according to a report by the international consultancy firm McKinsey & Company. This consultancy firm recommends that banks offer their customers a multi-channel experience, in which digital services are complemented by face-to-face service.
Individual service is compatible with the use of technology: It can be provided by video calls, which gives customers comfort by allowing them to save on journeys. But in a service of this nature, it is important for these services to be an option and not an obligation, maintaining the premium experience that users with high assets demand.

Because the use of technology is essential to differentiate ourselves from competitors. Especially useful for private banking is the use of big data and artificial intelligence. The possibility of analyzing large volumes of information and relating elements with others can help to segment customers better and offer them the business opportunities that best suit their profile. And AI can be an effective risk management assistant.

Without neglecting direct customer service, digital investment platforms are also appearing that allow access to exclusive products and real-time investment monitoring and analysis.

We should also highlight the role of roboadvisors, automated managers in which an algorithm studies the characteristics of the customer and the market to offer an investment portfolio adapted to their circumstances. Private banking has responded to these products with indexed portfolio services. These include different profiles depending on the highest or lower risk that the investor is willing to assume, giving them automated responses to their needs.

Another very interesting technological innovation in private banking is blockchain technology. By eliminating intermediaries, allowing faster and safer financial transactions and reducing operational costs, improving the efficiency of services. In addition, this type of technology helps attract new customer profiles that are less reliant on traditional banking. 

Any increase in digitization also entails a risk of cyberattacks that must be tightly monitored and controlled. Technological threats are no longer increasing in volume and complexity and the growing use of digital tools opens up more doors for potential attackers. A study by the security software company Sophos revealed that 55% of the financial companies consulted suffered ransomware attacks in 2021. Artificial intelligence (AI) tools can be effective allies for detecting threats and fraud and for biometric authentication to protect customers' data.

In this situation, banks are investing large amounts of resources in applying multi-layer protection systems so that users can guarantee the security of their assets. This protection includes monitoring transactions in search of unusual activity, alerts against possible suspicious behaviors and anti-fraud measures. There is also significant training and awareness work done to ensure that users themselves take the appropriate security measures.

The importance of cybersecurity in the process of digitizing private banking is not only related to the protection of sensitive data and confidential information or the prevention of cyberattacks or fraud, it is also crucial to promote the trust and reputation of the bank and to attract the new profiles of digital natives.