Solving the Privacy-Personalisation Paradox in Wealth


Richard Nolan

Operations Director

The Financial Services Forum

In today’s Information Age, personalisation and privacy seem bound for collision. Personalisation requires disclosure of sensitive data and for relevant insights to be generated from that data; while privacy is the desire, even the right, to keep this data hidden. The interplay between the two means that firms often grapple with understanding what kind of information may be too personal to request, how to seek it, and how to collect consent to track it.
And yet, at the same time, a new generation of clients is growing up comfortable sharing their personal details online. We let Uber know in real-time our exact location so we can catch a taxi quickly. We give Google access to our browsing history to receive optimised search results. We allow dating apps access to some of our most sensitive personal data in the hope of seeing more compatible matches. Each of these interactions involves a near-subconscious decision to trade off our personal privacy in exchange for services that are more relevant to our needs and interests.

FactSet and Scorpio Partnership’s latest research into the attitudes of over 800 wealthy investors, across the UK, US, Switzerland, and Singapore supports this view, and finds that investors are broadly open to sharing more personal information than the wealth management industry typically believes.

Behaviour check
Irrespective of age, there is a willingness among clients to try new communication channels with advisors – if these deliver a more personalised service. This outlook holds true even when it comes to unfamiliar brands, with as many as one in two investors saying they occasionally disclose personal data to businesses they do not know.

Openness to sharing information is driven by investors’ attitudes towards technology and linked to clients feeling assured that firms will keep their data safe. Over half (52%) of all investors say they are confident that their personal details will be securely protected, which stems from a strong willingness to take responsibility for scrutinising how firms store and use data (80%).

Ron Rubbico is CEO of Pointillist, a customer journey analytics platform that uses machine-learning algorithms to uncover and optimise critical path journeys that matter most to clients. According to Mr Rubbico, “clients have long been trained to accept legal terms and conditions presented to them, but this is starting to change. The bar is being raised very rapidly around who clients allocate their trust to so, the more transparent a company can be about how data is stored, secured and shared – the more credible they will be.”

Delivering on digital
The evolution in client behaviour suggests that investors are gearing up to expand their relationships digitally. In exchange for sharing sensitive information about their personal lives, our research shows that investors anticipate enhancements to three specific areas: information delivery, the client experience and the wealth management proposition.

The importance of personalisation in proposition development, for example, was discussed at a recent FactSet-hosted industry roundtable in New York. “What clients think they want, what the advisor is comfortable with, and what the firm wants to promote as a behavior are three very different things,” says one senior decision-maker. “We’re actively trying to look at what clients are asking for.”

Delivering on these expectations should yield advantages for both advisors and clients. Accessing clients’ data more frequently and from more varied sources, for example, allows wealth managers to build a more holistic picture of their clients. In return, clients receive recommendations that are more impactful and closely aligned to their wealth goals. The trade-off between privacy and personalisation will therefore lie with the extent to which clients ultimately trust their wealth manager’s brand to use their data in a way that brings an enhanced experience.

Talking to experts from other industries demonstrates how emerging technologies can help wealth managers strike the right balance between the two to deliver an outstanding experience to each investor. For example, Katie Wilson – Head of Customer Success at Triptease, a direct booking platform – is disrupting the travel and hospitality space by following similar principles and building better guest relationships online.

“At Triptease, we developed a series of tools that sit on a hotel’s website with the aim of increasing that hotel’s conversion rates through personalisation,” says Ms Wilson. “Scripts, for example, that sit on that website’s page and analyse a user’s behaviour while they’re browsing, adapting messaging based on things like their search data, location, cookies, and so on. This makes the experience more relevant for them, while helping hotels understand what kind of guest the browser is.”

So while the long-standing challenges to greater personalisation are all too familiar to business leaders today, they do also present new opportunities for building closer relationships with clients. As the debate on data privacy continues to evolve, advisors should remember: it is better to engage with concerns and show how they can be addressed, than to miss out on the benefits new data sources offer to both sides of the wealth management relationship.