Italian wealth managers respond to new regulations and millennials

Gianpietro Giuffrida explains the pressures changing the wealth management industry in Europe and Italy

January 22, 2018

The international wealth management sector is constantly growing and evolving; adapting to the needs of a new generation, and embracing digital technology. Gianpietro Giuffrida from BNP Paribas Wealth Management explains the challenges and the changes that he’s seeing in the wealth management industry today: technological advances, new expectations in customer service from millennials, and price pressures from new regulations like MiFID II.

World Finance: Tell me more about the challenges and the changes that you’re seeing in the wealth management industry today.

Gianpietro Giuffrida: The wealth management industry is currently undergoing its biggest challenges since the financial crisis. Technological development is bringing a great digitalisation and automation to financial services. The new generation called millennials tends to demand a great personalisation in customer services. Technology change is generating demand: simple products through new digital channels.

Unfortunately, loyalty rates are dropping, and wealth managers must overcome this.

World Finance: How can technology be used in the wealth management industry to improve things for customers and the industry itself?

Gianpietro Giuffrida: Customers more and more are looking for totally digitalised solutions. Technology can help a wealth manager to deliver services, and also to adapt to the evolving regulatory climate.

At the same time, the wealth manager should also employ conventional approaches, such as brand cultivation and relationship management, to boost customer trust and to fulfil the growing demand for focuses for service solution.

World Finance: So what is the reality for private banking in Italy today?

Gianpietro Giuffrida: The Italian wealth management market offers a good example for how industry in general is starting to change. The change is driven by rising costs, in part from new regulations like MiFID II.

In Italy, wealth is normally concentrated in the central or northern regions. In terms of financial assets, the total wealth of households with minimum €500,000 amounts to over €1tr.

Another important characteristic of the Italian market is the large number of business owners, who may control the small and medium sized enterprises. Many business owners think that the family office is the best solution to manage their wealth; consequently, Italian banks have to work with these family offices.

World Finance: How is BNP Paribas Wealth Management responding to these changes in Italy? What are you hoping to achieve?

Gianpietro Giuffrida: BNP Paribas hopes to be a leader in transforming the wealth management industry by 2020. This objective will be a change in three main ways. The first, to invest in remote, digital interaction. The second, to improve services to meet the expectations of the younger generation. And last but not least, building innovative support for our customers. For example, Privilege Connect, our private banking, tailor-made service centre, providing 24/7 support.

The customer is in the head of our commitment. We want to be the most popular and recommended bank of Italy.

World Finance: Gianpietro, thank you very much.

Gianpietro Giuffrida: You’re welcome.