Banks struggle with millenials' use of messaging apps

2 in 5 APAC millennials contact their RMs through chat application in Q2 2018.

Almost 40% of millennials in Asia-Pacific were contacting their wealth managers via a chat application in Q2 2018, a 10 percentage point increase since 2017, according to analytics firm GlobalData.

Using chat applications is one method that is increasingly used by millennials to discuss their investments with advisors, the firm noted. These applications offer a quick and easy way for wealth managers to contact their clients, to increase engagement levels, and grow revenue within the company.

Oliver Wintle, associate wealth management analyst at GlobalData, stated, “One issue with ‘chat applications’ however, is that the wealth management firm does not own the data – the third-party messaging service does. In addition, if the advisor leaves the company so does their conversation history with the client.”

However, email remains one of the key forms of communication between wealth managers and investors, the firm noted. A 2018 Mass Affluent Investors Survey found that its use has been increasing between 2017 and 2018 with the proportion of investors communicating with their advisor via email form increased by 10 percentage points.

“Despite this, email is not ideally suited to client-advisor communication. For instance, if at any point the client clicks ‘move to spam’ on an email, all future communications will follow the same path and end up in the recipient’s spam folder – stripping a company of engagement with the client. Consequently, wealth managers should focus on other communication channels,” Wintle added.

There is willingness for investors to communicate with their wealth managers via chat applications, the research firm noted. They suggested that relationship managers should tackle compliance and data ownership challenges, they should seek to include chat features in their core online and mobile platforms.