How To Truly Understand Your Bank's Clients: Employ A Robo-Advisor

How well does your bank understand its clients and their financial needs? Unfortunately, this answer is increasingly becoming “not well”. With the rise of online banking, person to person interactions between bank and client have fallen dramatically over the last two decades, and as a result, banks have lost valuable insight into their clients' life events, monetary goals, spending patterns, and time horizons.

So how can banks regain valuable data about their clients without losing the efficiency and convenience of online banking? The solution: robo-advisors. Although a wealth management service, robos provide a valuable information solution for banks. The reason for this is because unlike digital banking, robo-advisors are built to: 1.) be a continuously engaging touch point with clients, and 2.) collect a wealth of insightful data about their clients financial situation.

1). Robo-advisors provide a trusted and continuous touch point between bank and client.

Attaining a client’s holistic financial picture can be difficult for banks, as clients often shy away from voluntarily sharing information - unless they see it as either a necessity or benefit. However, for robo-advisors, attaining client data is not a problem. Robo-advisors need data about their clients to design portfolios, and additional client information helps robos improve their portfolio recommendations. Clients of robo-advisors are willingly to share their personal data as it will aid the robo in helping them achieve their financial goal(s).

2.) Robo-advisors inherently collect a wealth of insightful client data

Client data typically collected by robo advisors includes:

• Life event goal(s)
• Income level
• Marital status
• Net worth
• Outside accounts
• Age
• Volatility tolerance
• Employment information
• Time horizon
• Asynchronous dialogue
• Spending habits
• Charitable causes

All of the aforementioned data, can be refined and the insights transmitted to the appropriate department of the bank. Insights can be used to construct client profiles, provide targeted product recommendations, develop marketing campaigns, and design product offerings.

Let’s say one of your clients is investing for a down payment on a home she plans to purchase in three years. With a robo-advisor, not only are you alerted to this critical piece of information, but you are also informed about her saving schedule and overall financial picture. Your bank now has an information advantage. A bank’s retail 

mortgage brokers can utilize this information to provide proactive tips and offer the appropriate product before competing lenders are even aware of the opportunity.

Knowing your customer’s life event goals and financial circumstances allows your banking team to exceed customer service expectations and generate targeted sales opportunities.

To remain competitive, banks will need to truly understand their customers and proactively deliver products. Robo-advisors provide an avenue to better collect and distribute client data, allowing a bank to compete against peers and disruptive fintech entrants.

Interested in offering a robo advisory solution for your banking institution? Learn more about Polaris Digital Advisor.