Italy’s private banks prepare for generational, digital, regulatory change

BNL Private Banking and Wealth Management's Stefano Colasanti explains how Italy is responding to the greatest trends in private banking

November 13, 2019

Three main forces will shape the Italian private banking market in the next five years, says Stefano Colasanti, Head of Business Development and Commercial Planning for BNL Private Banking and Wealth Management BNP Paribas Group. First: generational change, as wealth flows from current private banking clients to their heirs. Second: digitalisation, as all banks are forced to update their processes and offering. And third: regulation, as MIFID II comes into force. In this video, filmed in BNL Private Banking and Wealth Management’s Rome headquarters, he discusses these trends and explains how the bank is responding.

Stefano Colasanti: The Italian private banking market, served by private institutions, has been growing steadily in the last three years up to an overall value of €800bn at the end of 2018 – with an overall growth of eight percent with respect to 2015.

The Italian Association of Private Banking estimates project growth to continue also in 2020, when the market is estimated to reach €900bn.

At the end of 2018, BNL Private Banking managed around €34bn, positioning itself as the fifth competitor in the Italian private banking market.

Three main forces will shape the Italian private banking market in the following years: generational change, digitalisation, and regulation.

In the coming years, we’ll have a huge amount of wealth that flows from the current owners – the current private banking clients – to their heirs: millennials, generation X.

It’s very important for the major wealth managers to create, to build in time, a good relationship manager with their client heirs, because private banks that first prepare this generational shift will get a very important competitive advantage, and tap into the client base of the competitors that are not able to prepare this generational change.

The second force in Italian private banking market is digitalisation. Clients want to have the same customer experience by the financial institutions and non-financial companies – for example, Amazon. Private banks – Italian private banks – are not lagging, and they need to put digitalisation at the centre of their agenda, to offer clients this type of very high value customer experience during the relationship with the clients.

The last force in Italian private banking is regulation. The introduction of MIFID II in Italy will have a very important and significant impact on the Italian private banking market: for the first time, clients will be displayed the costs associated with their investment products and services. Private banks have to review their product offering by simplifying, making it compelling for their clients. It’s very important to offer to the clients the right services or products with the right costs, to respond to the right needs of the clients.

BNL Private Banking embarked on a transformation journey of its service and business model, which resulted in three key actions.

The first action is a new approach to wealth advisory, by reaching the offering services of non-financial products and services: corporate advisory, issuance advisory, real estate advisory; to manage the global wealth of clients, to be the partner of the client in managing their wealth.

The second key action is the digitalisation of the relationship model, by introducing a new, innovative, very important tool platform for the clients’ discovery – for example, humanist – or for managing their relationship with the bank such as the app, My Private Banking. In this way we want to create a very important relationship with the new generation of clients. We created a specific contact centre dedicated to our private bank clients, that is active 24/7: it’s a fast-lane, dedicated lane, to address the clients’ needs in terms of banking, financial, and non-financial needs.

Third is the role that BNL Private Banking can play in sustainability. BNL Private Banking can address the client to financial investments to sustain the environment, to sustain the economic growth, to sustain the growth of our country, to help the people.

I strongly believe these new strategic actions will give BNL Private Banking a competitive edge over its competitors, and innovative services, solutions, products and tool platforms that we are introducing will help us to be more attractive to the new generation of private banking clients.