Private banking: The generation game and how to lose it
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Private banking: The generation game and how to lose it

The overweight focus on millennials by private banks feels a little desperate.

Generation x-600

Private banks are in an unusual position. They enjoy the lowest capital ratios in the finance industry, yet their profit margins are shrinking. Higher costs and falling revenues have forced many to retrench to their domestic markets, but that has come at a price. 

Without the global footprint, they are less convincing to the lucrative ultra-high net-worth set. At the same time, to make waves in a home market further down the wealth spectrum means competing against retail and commercial banks – all of whom seem to be targeting millennials.

Indeed, every private bank in its home market wants to talk about hiring millennials, investing in technology to attract millennials, or creating products, services and events that appeal to millennials. It is as if the 38- to 52-year-olds of Generation X have disappeared, which is a shame, because, according to Deloitte, they will hold the majority of the world’s wealth by 2030 – with $150 billion and $240 billion in wealth management fees up for grabs. And while everyone can appreciate online banking and a helpful app, it is hard to imagine older Generation X-ers bumping phones with an adviser. 

The overweight focus on millennials by private banks feels a little desperate. Furthermore, the data on millennial traits and habits is iffy to say the least. Some studies show millennials to have very little brand loyalty, while others suggest quite the opposite. When surveyed, millennials claim to care about the world, yet they volunteer and donate less than any of their counterparts in other generations. The fast pace of change also means the 22-year-old millennial is a completely different beast to the 37-year-old millennial. 


Banks are spending far too much time and money trying to understand the complexity of a small slice of the global population. 

It is one thing to invest sensibly in a platform that can change as technology evolves, it is another to gamble the budget on what is effectively a crapshoot. And let us not forget that Generation Z-ers are now turning 21. They are, as a group, larger in number than the millennials, have greater wealth potential some more, rather suspect, data suggests, and seem to be more conservative about how they put it to use. 

One survey by Fluent goes as far to say that 61% of Generation Z prefers to interact person-to-person. Oops, didn’t the industry just spend millions of dollars on automation and close hundreds of branches? 

Private banks used to be quite boring, which was probably better-suited to their clients’ needs, as well as being a less costly and more sustainable strategy. After all, most wealthy clients regardless of being 18 or 81 just want good advice, their money held safely and invested well. 

It is a risky path these banks walk as they listen to design companies and fintechs run by millennials and follow short-term trends; we might see it play into the hands of more traditional and staid wealth management firms. Because if your private bank thinks it a wise decision in today’s environment to spend its own money on Fitbits for advisers, then you would be right to wonder if it is making similarly wise decisions with yours. 

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