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Innovation in Private Banking and Wealth Management

Embracing change to succeed in the digital world

Our latest study emphasizes the need for the Private Banking and Wealth Management industry to substantially change how it looks at change and to become better at delivering innovation to clients and invent new ways of conducting the business.

The industry has reached a point where a mind shift has become essential. The profitability of European Wealth Managers has been in constant decline in recent years, with profit margins falling by 40 percent between 2000 and 2015. During the same period, the market size for Private Banking measured by the bankable assets of European millionaire households has grown by more than 60 percent.

This increasing gap between profitability and market size shows that wealth managers are failing more and more to serve clients successfully with their existing business models and approaches. This suggests that the industry is facing an innovation gap, having for years prioritized other strategic levers such as industrialization and M&A.

In particular, the report defines the term “innovation,” describes the industries’ innovation gap, and reviews the current business models in the Private Banking and Wealth Management industry.
Wealth managers should become more innovative – and they can: The study showcases possible solutions how innovation can be utilized to transform the Private Banking and Wealth Management business models.

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