Privacy versus Client Services…how can you strike the right balance?

Insight gained through quality client data is the key to offering a more personalised service. Yet wealth managers would do well to question where the boundaries lie.  

In a November keynote speech from the FCA delivered by Jessica Rusu, the responsibilities of those within financial services were underlined. Describing a threat landscape shaped by new consumers flocking to ‘high-risk markets and products’ such as cryptocurrencies and spurred by a sense of social competition, the message was clear: 

We all have a vital role to play in protecting our clients or customers from technologically savvy scammers. And collaboration between the industry and the data regulator is the way forward.  

Calling upon her audience to connect ‘the dots of intelligence’, ‘draw on strategies from data science’ and leverage data to ‘detect harm and intervene more quickly’, the Chief Data, Information and Intelligence Officer’s words couldn’t be more relevant to wealth managers gaining access to greater volumes of client data year on year.  

Rising expectations and risk 

As the possibilities of hyper-personalisation emerge, wealth managers will be keen to increase AUM via a more intuitive and tailored client journey. However, in the context of regulatory compliance and data security, it’s clear that client data is marbled with a growing sense of responsibility and risk. Therefore, firms must take appropriate action to manage the risks, navigate the changing legislative agenda, and invest in systems and infrastructure to support their future data strategy.  

Aligning data scope and client servicing 

Data privacy was a hot topic at a recent roundtable event attended by a range of wealth management delegates. Is it possible to collect too much data? And when does monitoring your client’s habits tip the balance into a breach of an individual’s privacy? These are the type of questions that need to be considered within the context of client preferences, current legislation and your data management capability. Though there will always be some grey areas, it will be up to Data Governance teams and Relationship Managers to determine where the moral line lies 

Transparency will be vital. Clients’ ability to optout or in of what data they provide and how it is used is critical, along with a proactive, defensive approach to data security.  

Education of the client will aid onward engagement; only when individuals see value in the divulged data will the more discreet be willing to share beyond onboarding. A self-service option, enabling direct client access to their data via a secure portal, may provide a comfortable middle ground for some.  

Open banking – opportunity or overstep?  

Open banking affords third parties such as wealth management firms access to clients’ bank transactions. Predicting client behaviour and helping clients reach their investment goals would seem a welcome tool in the wealth manager’s armoury, but amongst our delegates, the jury was out.  

Are clients open to a laser-focused account of where they are spending their money and how they might reach their investment goals faster by altering some habits? For many of our delegates at the recent Business focused event, it felt a step too far.  

Our stance: Reduce risk through end-to-end solutions 

Data can offer insight into each client’s life stage, behaviours, sentiment, investment preferences, and portfolio performance. Yet, our delegates confided there’s often a lack of clarity around the next best actions when new information comes to light. This is where an end-to-end solution demonstrates its value, using smart artificial (AI) and machine learning techniques to analyse the client’s data and other critical factors alongside market trends to offer relevant recommendations. And just as vitally, a step-by-step audit trail is easily accessible for industry regulators, tying the original insight to what was recommended and why.  

Data capture once to mitigate risk 

Relevant, accurate, organised and consistent data makes everyone’s lives easier – from the client to the compliance manager, marketeer and wealth manager – and it need only be captured once, as early as possible in your prospect or client’s journey.  

As more regulation and compliance measures arise, having a single data source, a means to analyse it, and a set of predefined next actions will help determine the parameters of the client relationship. In our opinion, this level of control will be a critical factor in the future, minimising the associated risks, removing doubt for relationship managers and allowing the forward-focused to outshine technology laggards.  

Future-proof solutions to preserve trust 

There’s a sense that more privacy tools are inevitable to protect the interests of the next generation of clients, given their fondness for high-tech, high-touch personalised services. And while no one can predict the future, we do know this: client expectations will only keep rising. It’s a landscape in which loyalty will be earned via Relationship managers’ respect for their clients’ preferences and data security.  

It’s time to empower teams through intelligent Client Lifecycle Management technology, or at the very least, systems that ensure all data captured is of value, wholly relevant and fully compliant. Anything less is a betrayal of client trust.  


Wealth Dynamix
Wealth Dynamix

Wealth Dynamix Team

Wealth Dynamix delivers Client Lifecycle Management solutions to the world’s leading private banks and wealth and asset management firms.


Dispelling the Myths Surrounding Hybrid Servicing in Wealth Management

27 March 2023

Dispelling the Myths Surrounding Hybrid Servicing in Wealth Management

Traditional Wealth Management firms and Private Banks may think that human service will confer a point of difference in time. However, they could be standing on a burning bridge. There are some very compelling reasons for adopting AI technology and automation within your service model, and in time, protecting profitability will likely force action.

3 min. read

The compliance advantages of hybrid servicing

23 March 2023

The compliance advantages of hybrid servicing

There may be many ways in which a wealth management business ensures the digital functionality of its hybrid model is compliant. In this article, we will focus on three features that should be embedded in the hybrid model solution to ensure greater compliance with regulatory requirements.

3 min. read

Is Hybrid Servicing the next big thing in WealthTech?

15 March 2023

Is Hybrid Servicing the next big thing in WealthTech?

A Hybrid Servicing model is central to the future of wealth management. Its growing popularity has been driven by a more digitally adept population, and a younger demographic of HNW and UHNW investors impacting the current benchmarks for client servicing and accessibility to financial data.

3 min. read

Sign up to our Newsletter

NEW - eBook: How Hybrid Servicing Can Transform Your Wealth Management Firm

At Wealth Dynamix, we believe a hybrid client servicing model offers the optimal solution – it is efficient, effective, and can support compliance.  

Client Onboarding