Charting the Course: Mastering the Challenges Facing Banking Relationship Managers in 2024

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The banking landscape has changed significantly over the past decade. With rapid advancements in technology, evolving customer expectations, and increased competition from fintech companies, banking relationship managers face a myriad of challenges that will remain relevant in 2024. Backed by statistics and research, this article delves into the major pain points for banking relationship managers in 2024, providing insights into the industry's most pressing concerns and possible solutions.

The Rise of Digitalization: Adapting to the New Normal

Embracing Digital Channels in a Hybrid Approach

The rise of digital channels has posed a significant challenge to banking relationship managers in recent years. According to a McKinsey study, digital adoption has moved from a question to a concrete reality. With approximately 73% of global interactions with banks now taking place through digital channels.

This shift in customer behavior has forced relationship managers to adapt and develop new strategies to engage with clients digitally.

However, when it comes to financial advice:

It is therefore critical for advisors to understand and predict these moments of importance to their clients. Technology is the driver to identify these signals with data.

The Threat of New Technologies and FinTech Disruption

Another major pain point for banking relationship managers in 2024 is the increasing competition from FinTech companies:

Meanwhile, Accenture research shows that younger investors are more likely to look to non-traditional sources for financial advice. With a significant percentage considering wealth products and services from tech giants such as Google, Apple and Facebook.

In addition, the study also shows that younger investors exhibit a higher trust in algorithm-generated advice than their older counterparts. This highlights a shift in preferences.

Evolving Customer Expectations: Staying Ahead of the Curve

Personalization and Proactivity

In 2024, customers will expect a banking experience that goes beyond a one-size-fits-all approach:

Underscoring the importance of personalization, the study found that 34% of respondents would increase their investments if they received a hyper-personalized experience.

This puts pressure on advisors to provide customized solutions and proactively address their clients’ financial needs.

The Rise of ESG Products and Value Investing

Investors increasingly seek customized advice and investments that align with their personal values, creating an opportunity for relationship managers to stand out:

Interest in Environmental, Social, and Governance (ESG) products has grown in recent years as more investors prioritize the impact of their investments:

Regulatory Compliance: Balancing Growth and Risk

The Burden of Compliance

Regulatory compliance will remain a major pain point for bank relationship managers in 2024:

With ever-changing regulations and increased scrutiny from authorities, compliance has become a complex and time-consuming task. And relationship managers are feeling the strain of navigating these regulations.

Leveraging Data and Analytics: Turning Challenges into Opportunities

Harnessing Data and AI for Success

One way to address the biggest pain points for banking relationship managers in 2024 is through the effective use of data and analytics. Financial institutions have access to vast amounts of customer data, which can be used to create personalized experiences, enhance decision-making, and improve risk management.

Technology-enabled client interactions could include providing easy access to advisors, updating clients on market-influencing events, or offering scenario modeling for what-if-analysis of client portfolios. Notably, 65% of clients value the ability to simulate portfolio strategies, underscoring the importance of predictive insights to drive proactive client interactions and improve the quality of advice.

Overcoming Data Privacy Concerns

However, the use of data analytics also raises data privacy and security concerns. Relationship managers must ensure that they comply with data privacy regulations and maintain customer trust while leveraging data analytics.

How to Elevate Advisory Service

Embracing Cutting-Edge Software Solutions

Advisory solutions play a pivotal role in streamlining advisory workflows and elevating client-centricity through personalized investment proposals. These solutions enable relationship managers to provide unparalleled service to their clients, while optimizing efficiency and saving time.

Intelligent campaign management solutions effectively harness the transformative power of AI and robust analytics. Empowering advisors and relationship managers to embrace a data-driven approach.

Leveraging Changing Client Expectations for Success

Another potential answer to the evolving expectations is Goal-Based Wealth Management, which offers a transformative wealth management experience for HNIs and UHNIs. By setting goals and implementing continuous monitoring with portfolio rebalancing, relationship managers can take their services to new heights and create a distinctive offering for their clients.

FAQs

What are the major pain points for banking relationship managers in 2024?

The key pain points include adapting to the rise of digital channels, evolving customer expectations, regulatory compliance, and leveraging data, analytics, and AI.

How has digitalization affected banking relationship managers?

Digitalization has led to a shift to digital channels, increased competition from FinTech companies, and the need for relationship managers to adapt their strategies to engage with customers in a hybrid approach that combines digital self-service and face-to-face interactions.

What are the changing customer expectations that relationship managers need to respond to?

Clients are increasingly demanding a personalized and proactive banking experience and are showing a growing interest in value-based investing. This presents an opportunity for relationship managers to differentiate themselves by responding to these needs and providing tailored advice.

What are the key factors in managing regulatory compliance?

Relationship managers must stay abreast of ever-changing regulations, invest in compliance activities, and strike a balance between enforcing regulatory requirements and maintaining client satisfaction.

How can data and analytics help tackle the major pain points for banking relationship managers in 2024?

Data, analytics and AI can be used to create personalized customer experiences, enhance decision-making, improve risk management, and drive revenue growth, while ensuring compliance with data privacy regulations.

Conclusion

The banking industry is facing a multitude of challenges in 2024 for relationship managers, driven by digitalization, evolving customer expectations, regulatory compliance, and new technologies. To navigate these turbulent waters, banks must adapt their strategies, embrace a hybrid advisory approach, address changing customer preferences through personalization and proactive communications, invest in innovative solutions, and foster a culture of continuous learning and improvement. By adopting these strategies, they can effectively address the key pain points for bank relationship managers in 2024 and turn these challenges into opportunities for growth and success.

Editor’s Note: This article was originally published in September 2023 and has been completely revised and updated to ensure accuracy and timeliness.

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