Wealth management businesses are falling behind because they are not giving clients the option to apply online, as figures showed the vast majority of customers fail to complete offline application forms.
According to fintech firm Avoka, 85 per cent of financial customers give up on paper-based application forms without completing them.
Wealth management products are particularly affected by the so-called “abandonment problem”, the company said.
This aligns with a report from accountancy giant PwC which said wealth managers were “surprisingly complacent” about adapting to the digital landscape.
Figures from Avoka, which consulted up to 36 of the biggest banks in the UK, Germany, France, the US and Australia, showed that just 41 per cent of wealth management products are available through an online application.
The study also found that less than a quarter of banking products can be applied for on a smartphone.
Competitors are stepping in to pick up the pieces. Don BergalDon Bergal, chief marketing officer at Avoka, said this is a serious concern for banks.
“Wealth management can be very profitable but valuable customers are lost in paper-based onboarding processes that take too long.”
He said competitors are stepping in to “pick up the pieces”, particularly outside of the banking sector.
“With increased competition, institutions have no choice but to give customers more choice.”
Mr Bergal said moving to mobile-friendly application systems was a “golden opportunity” for banks, pointing out that by automating these processes they can free-up time and resources to grow the business.
He recommended firms find out when the applications are usually abandoned and where potential customers get stuck for too long.
katherine.denham@ft.com
