Focus on digital expertise
The way clients communicate and interact with banks has changed dramatically over the past 20 years. Banking services are now available around the clock thanks to the internet and smartphones. Digitalisation has also raised client expectations, as they are better informed and know exactly what they want. Banks have therefore continuously improved and expanded their digital client portals.
The next step in this development is digital personalised investment recommendations. But what does personalised mean? Such recommendations take into account the composition of the securities portfolio to date. If, for example, companies from the pharmaceutical sector are among the preferences, or if all investments are in euros, then a useful personalised recommendation will be based on this. If the digital assistant finds a stock that would be better suited to the profile, it must not change the character of the portfolio. The securities must be comparable, for example in terms of sector, industry, currency and market capitalisation.
Digitalisation has raised client expectations, as they are better informed and know exactly what they want.
Bernd Hartmann Head CIO Office
A digital assistant such as VP Bank's Investment Recommender follows this rule before automatically making suggestions for changes to stock positions or new stocks. This is because the digital assistant does not make any decisions, but only does what computers do best: compare data and apply rules. These rules are made by people, shaped by experience and extensively tested. This enables investors to receive suggestions aimed at optimising their portfolio.
The idea is clear: make informed decisions more easily and implement them with just a few clicks. Investors are empowered to manage their equity portfolios more actively. They receive suggestions that have been compared and deemed suitable based on more than a dozen criteria divided into five dimensions, including valuation, dividends and momentum. These criteria have been compiled by experienced equity analysts. It is easy to see which criteria have been used and how they differ from the current stock.
Digitalisation provides access to more and better-prepared data – an important basis for well-informed, less emotional decisions. However, it does not replace personal interaction: human advice remains indispensable for many questions relating to portfolios.
