The Transformation of Private Banking Challenges Financial Providers and Their IT Organizations

ID Number: G00157631

23 May 2008

David Schehr

"Private banking" is a term that has declining value in the modern global financial market; private wealth management is a more relevant concept. Even in private wealth management, a two-tiered model of services is needed.

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Table of Contents

Analysis

1.0

The New Reality of Private Banking

1.1

A Shifting Definition

1.1.1		A Traditional Model — Swiss Private Banking
1.1.2		A Contemporary Model — Private Wealth Management

2.0

The Market for Private Wealth Management

2.1

Segmenting the Wealth Management Opportunity

2.2

Globalization Means Modifying the Stratification

2.3

The Two-Tier Service Model for PWM

2.3.1		Elite Wealth Management
2.3.2		Affluent Wealth Management

2.4

Implementation of the Two-Tier Model

2.4.1		Implementation Examples — Mature Markets
2.4.2		Implementation Models — Developing Markets

3.0

The Changing Nature of PWM Clients

3.1		Earned Wealth Drives Different Client Attitudes and Behaviors
3.2		Demographics Drive Additional Changes to the Models

4.0

Implementing Effective Technology Support of PWM

4.1

Current Limits of Technology Support for PWM

4.1.1		Government Legal and Regulatory Constraints
4.1.2		Legacy IT Systems Dominate PWM

4.2

Technology Implications of the Two-Tier Model

4.2.1		Technology Focus in EWM
4.2.2		Technology Focus in AWM

4.3

IT Increases the Value of the Institution in EWM

4.3.1		The Importance of Institutional Relationships in Mature EWM Markets
4.3.2		The Importance of Institutional Knowledge in Emerging EWM Markets

5.0

Recommendations

5.1		Financial Services Providers
5.1.1		Core Banking and Wealth Management Technology Providers

6.0

Conclusion

Recommended Reading

List of Figures

	Figure 1.	Global Wealth by Tier

	Figure 2.	U.S. Financial Wealth by Percentile

Wealth Management
Financial Services Business Strategies

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Resource Id: 678507