As Digiday’s Tanaya Macheel details, the bank is launching a new digital investment tool for its high net worth clients, but it isn’t jumping on the robo-adviser bandwagon like many other established financial institutions.
Instead, BNP’s new myAdvisory tool, which will be available through the firm’s mobile app, offers “message-based financial advice…based on clients’ portfolio and risk preferences” and gives clients the ability to trade via live chat.
Humans are intimately involved in the tool’s functioning. A team of advisers will be automatically alerted if something happens which might have a significant impact on a client’s account. This can then be escalated to BNP’s relationship managers who will message the affected client with advice.
April Rudin, CEO of The Rudin Group, a wealth management marketing firm, says that myAdvisory creates perhaps the first “mobile wealth management” solution and observes that the offering “demonstrates that BNP has changed the experience instead of changing the products or services they offer.”
For the bank, that distinction was key, as BNP wanted to make its advisory services available to high net worth clients anytime, anywhere, but didn’t want the increased digital convenience it offers them to eliminate the value of personalized, hands-on service they pay for and expect.
Lessons for other financial services players
There’s a lot that other financial services firms can learn from BNP’s approach.
First, myAdvisory was developed based on feedback from its clients and will give the clients who provided feedback access before a broader roll-out. That doesn’t guarantee the success of myAdvisory, nor does it mean that BNP won’t face continued disruptive forces in the wealth management space. But it was wise of the firm to consult with its clients first because if it hadn’t, it might have developed an offering that didn’t meet their needs and, worst of all, might have developed an offering that eliminated attributes of its service that clients value highly and help differentiate it from competitors.
Second, the myAdvisory offering demonstrates the importance of customer segmentation. As noted, in the wealth management space, more and more established financial institutions are building and launching robo-adviser offerings.
While there might very well be a market for robo-advisers in the high net worth segment of the market, it would have been unwise for BNP to assume that it needed to push a robo-adviser offering on its high net worth clients instead of, say, making some changes to how it serves them.
By segmenting its clients and seeking ways to better meet the needs of clients on a segment-by-segment basis, BNP is more likely to find ways to adapt and innovate without taking on far more risk than it has to.
Finally, BNP’s approach is a reminder that innovation and better customer experience doesn’t necessarily require cutting-edge technology. Complex algorithms, artificial intelligence and the like might be sexy, but it’s important for financial institutions to remember that these don’t always deliver value, and in some cases, they can even destroy value.