As a solutions engineer, working in the London financial services team at Salesforce, I have the privilege of frequently meeting a number of high profile clients across Banking, Wealth and Asset Management.

Over the past 4 years I have noticed some common technology trends with these clients. What I feel is really interesting is the difference between the pace of technology change for retail focused firms compared to institutional focused firms. This technology change impacts both the employees of these firms and their clients.

Retail Digital Innovation

We have all witnessed the recent technology innovations for retail customers. Banking customers can now open accounts via pure play digital banks such as Atom bank. HSBC and others provide finger print ID verification, face recognition and voice ID verification. Robo advice is gaining traction in retail wealth sectors with digital only advisors such as Nutmeg.

Feedback I have gathered from friends and colleagues shows that there is a real desire for a digital platform to support investors while providing a high degree of control and transparency.

When you consider the target market for Robo is the mass affluent sector it's vital these services show transparency on both risk profiles and fees. Nutmeg in particular have created a very user friendly digital offering that includes such compliance features of delivering a compliance suitability report on each risk change to the portfolio.

While all this amazing IT innovation is happening for the retail customer, has the institutional customer and their advisors been left behind, and what are the key reasons for this?

Why is retail winning the digital budget battle? 

In my view there are numerous reasons for this vast difference in both new technology adoption and the focus on a Digital IT strategy. Banks in particular appear to be able to prioritise the retail and consumer digital experience.

  1. Higher Digital Expectations: One of the key reasons for this is the change in expectations from their client base. The Millennial generation and even the so called “Silver Surfers” are now expecting a digital experience and are quick to switch accounts to get this.
  2. Value of Transparency: The need for transparency on the advice process in wealth management and clear visibility of fees are to be expected as a fall out of the financial crisis of 2008. This is easily delivered via a digital strategy using client apps and compliance processes.
  3. Digital Brand Awareness: Retail banks understand that their brand is exposed in this new digital world and they are focusing their IT budgets on this issue. Social media gives their customers a powerful voice to provide feedback and influence their peers.
  4. Regulation: From a wealth perspective given the recent impact of RDR and potential impact of MIFID2 it is easy to understand the need to support a fully digital service with automated advice. 

Why are the digital needs of institutional clients neglected?

Institutional firms and their advisors should in theory be a higher priority for digital innovation due to the value of their relationships and the fee value of their transactions. However this is clearly not the case when you look at the digital strategy for institutional focused firms. Here are some key areas that may help to explain this trend.

Change the bank vs. Run the bank

When Banks, Wealth and Asset Managers look at their digital budgets they focus on two key areas. There are budgets for change and budgets for running existing systems. Too often priorities are pushed from change to maintaining legacy systems and dealing with ever-present regulation (MIFID2 and PSD2) and risk management agendas. 

As expected these “Run the bank” activities are often significantly more complex than on the retail side.

Slower pace of business and personal connection

It can be argued that the pace of business for institutional clients and the much longer length of sales can influence the digital strategy. Retail clients demand instant access to their portfolios and accounts. Institutional clients traditionally appear to favor a more personal connection with their advisor or relationship manager.

Lack of digital exposure

The digital experience for institutional clients has not significantly changed in the last decade. From a client viewpoint they are still reliant on their advisors for access to vital information on their portfolio performance or overall account view. 

On the retail banking side, when customers were exposed to biometrics and wearable banking technology this forced many banks to innovate to keep their competitive edge. There is yet to emerge an institutional focused firm who leads the market in digital experience for clients and advisors. 


As more institutional clients are exposed to increasing levels of digital technology in their personal lives they will start to expect similar digital engagement from institutional firms.

The needs of client advisors are also changing. The average age for a wealth manager or institutional advisor is entering the millennial range and as this trend continues they will bring higher expectations for client centric digital tools and platforms.

History has shown that innovation can develop very quickly in a competitive market. Considering the strong headwinds of increasing regulation, lower return on fees and competition from the FinTechs there is considerable need to nurture and embed the institutional relationships for clients and advisors using digital technology.  

To discuss these issues and more, meet us at The Future of Digital Banking Conference on 5-6 June at Marriott Grosvenor Square. Contact Adelina Rusu to set up an appointment with our experts there. 

To find more insights into customer banking expectations, download the 2017 Salesforce Connected Retail Banking Report.