What the next generation of wealth management clients want, with Bank of America's Katy Knox

Why should young people go into wealth management? What are multigenerational families looking for in a private bank? What digital tools are these clients using now? Katy Knox, President of Bank of America's Private Bank, discusses her recruiting strategy, client experience, and what's next in her industry with Chana Schoenberger, American Banker's Editor-in-Chief.




Transcriptions:



Chana Schoenberger (00:00):

So I'm here with Katy Knox, who is the president of the private bank at Bank of America. Tell me, how are your private bankers helping clients deal with economic uncertainty right now?



Katy Knox (00:11):

Well, I would say one, no one likes market disruption, but what I have seen the team do is really rise to the occasion and be supporting clients when they need us the most. And that's really proactive with advice and thought leadership and points of view at the same time when there's any kind of disruption and really honestly coming out of the pandemic clients' needs got a little bit more complicated. And so what I've seen the teams do is really make sure that they're thinking about the family holistically and they're bringing solutions to the family that are really customized for them and thoughtful around their priorities. So I would say that's really what I've seen over the last couple of years.



Chana Schoenberger (01:03):

So what sort of new challenges are clients facing these days?



Katy Knox (01:07):

I would say a lot of focus on planning. Planning for the future, tremendous focus on living their legacy versus leaving a legacy and very inclusive around making sure that they involve the entire family. And as you can imagine with multiple generations, those priorities shift quite a bit. And so the important aspect for us is to make sure that we know every family member and that we understand deeply their priorities and then how it fits into the broader family's mission. And so I don't know that their issues or concerns have changed. There's just a lot more focus on planning, planning for the future, planning for the entire family, and then making sure there's alignment around legacy.



Chana Schoenberger (01:56):

So how do you get to know those younger family members?



Katy Knox (02:00):

A lot of family meetings. In fact, I was at one yesterday. And finding space for them, finding the opportunities to just spend time with them as individuals. So we do next gen summits, events that are really focused on and tailored honestly to topics that they care most about. And then just getting to know them personally. When we do different events, we look at the whole family and we figure out, okay, where do we want, where do they want to spend time? And then make sure that we deeply understand that, but you learn so much about them by just spending personal time.



Chana Schoenberger (02:36):

So what can you tell me about this group of next gen clients? What do they care about?



Katy Knox (02:42):

I think it's really diverse and there are so many different generations right now. I would say it goes back to mission and purpose and also education. We're spending a tremendous amount of time with our client's children, their grandchildren, their great-grandchildren, and there's just a thirst for knowledge. They really want to get educated around investments. As one example, we have quite an extensive arts services program and that's been an area where we have really seen tremendous growth, especially with next generation clients. And then I would say third would be on the philanthropic side. And really they all have great ideas around giving and what they want their legacy to be, and we help just guide them and educate them. And so I would say those are probably the three main areas.



Chana Schoenberger (03:43):

Okay. So one of the ways wealth managers tell us that things have really changed since Covid is the prevalence of everything digital, being able to have, for instance, digital family meetings when you can't fly everybody in, but you can get them. Is this something you're doing? How do you find that digital is transforming the private banking experience?



Katy Knox (04:03):

Well, I'm laughing a little bit because the video brought us together, it's very hard to schedule in-person family meetings. As the families grow, it was much easier to do it via video. And so that has continued over the last several years. It's an easy way to bring the entire family together and then also break out in different sessions. So we've used video quite a bit, but I would say as we look at our broader capabilities, going back to where we've seen digital adoption go in the private bank, if you go back five years, we were probably in the mid seventies around digital engagement. And that would be clients that are actually using our app or online or moving money digitally. Last month we hit 92%. So that just goes to show you the incredible shift. At the same time, we haven't really lost the focus on our high touch of delivery. And so it's really the balance of both. It's 24/7, making sure that the app is there and readily available for our clients anytime, any time zone at the same time curating it so that it's customized for them. And that's really been our focus in developing new capabilities and also enhancing the app to make sure that you have curated.



Chana Schoenberger (05:27):

So what parts of the digital strategy do you find clients are really engaging with the most?



Katy Knox (05:33):

Money movement.



Chana Schoenberger (05:35):

So click to wire?



Katy Knox (05:36):

I would say Zelle has really taken off. If you look at our engagement, what I really look at underneath engagement is what capabilities are our clients using? And so if you look at our Zelle usage, it's 5X where we were last year. If you look at mobile check deposit, which is something else coming out of the pandemic, making it easier for clients to digitally deposit a check. Right now we're at 76% of our checks are deposited digitally. And again, that was in the low sixties. So I look at the usage of the capability, but I would say money movement for sure. The most used application is Erica. So that's our artificial intelligence platform. Underlying our app and it's very basic questions, it's around balance account number, ABA number. And so when you look at how and why clients are using a lot of the technology, it's a lot of basic banking. At the same time, we've taken the opportunity to make sure we can also deliver thought leadership. So it's from the most basic banking to more sophisticated points of view and thought leadership around the markets as an example.



Chana Schoenberger (06:55):

So you find that clients are reading the analyst research using the apps?



Katy Knox (07:00):

They are, and video usage is up pretty extensively. And again, you look at next generation, we've shortened those videos so that you can go on in five minutes and just get a quick update. And we've made that a lot more accessible. At the same time as we're developing new technology, we're developing mobile first, and then from there we're taking it across platforms because we really do see the mobile usage is key right now.



Chana Schoenberger (07:30):

For the TikTok attention span.



Katy Knox (07:32):

It's for all generations. Our usage across every demographic is up pretty significantly. It's ease of use. And when you can get an answer to a question very, very quickly or just look at your balance or move money, that really makes a big difference. So it's all about convenience. At the same time, you want to be able to pick up the phone and call your private banker. And so that's why we call it high touch, high tech to make sure 24/7 we're all accessible to our clients.



Chana Schoenberger (08:02):

So when they actually pick up the phone, what do they want from that human?



Katy Knox (08:06):

Typically, it really, really varies. Summer, there's a lot of travel, so there's a lot of calls in that a credit card has been lost or a debit card. Many times it's children and grandchildren, but also it's just, it could be the simplest thing where it's a change of address or a credit card replacement. Obviously as you start to see fraud on the rise, those are calls that'll come in and we want to make sure that we're right there for the client to make sure we can take care of everything regardless of where they are in the world. And then in many cases, it's deep conversations with their banker, portfolio manager, trust officer, wealth strategist. Again, going back to planning.



Chana Schoenberger (08:52):

Okay. So how are you thinking about developing and training the next generation of private bankers? We've just come through the great resignation. There's a sense that this next generation coming out of college and graduate programs may not feel the same about finance as a career, that it may not be. I know that when I was an undergrad, something like 800 people took the basic level economics class. Now that many people or even more are taking basic level computer science, everyone wants to be a product manager at Google. So how do we get them to become private bankers?



Katy Knox (09:27):

Well, we started about five years ago enhancing our program, our off-campus program, and we developed something called our talent framework. And what we tried to do is look at all of our talent programs and really focus on off-campus first. So undergrad, graduate, enrolled development, career development within the private bank, within the bank, and then leadership development. And if you look at our off-campus program, we had tens of thousands of applications this year. So people want to come into banking. We had our largest class ever. We just welcomed nearly a hundred interns to the private bank this summer, and we have nearly 50 full-time that started. So that program has grown pretty significantly. And that's just one aspect of all those talent programs. And we have 95% retention in that program. If you look at it over a five year period. So it's two years, lots of rotation.



(10:28):

So that's one way coming right out of college. The second is the in-role development. So you've been in your career two to five years. You may want to look at different opportunities within the private bank, within wealth management, and then within the broader company. And we use our Bank of America Academy to make sure that there's curriculum for all of those different opportunities. So you have a pathway into that role. And right now in the private bank, we have about 4,500 employees. We have 2200 in an advancement or in-role program. So it just goes to show you that I feel really strongly that you can keep folks engaged and retain them at the company if you're helping them to achieve their personal and professional goals. And you do that by continuing to develop them in their career.



Chana Schoenberger (11:21):

So what is the sales pitch for why a bright young student should become a banker?



Katy Knox (11:27):

We actually do quite a bit on campus, and we start freshman year, believe it or not. And those are educational sessions, but really the superpower is taking our cohorts from the different schools or from the different programs and aligning them to either campuses or video chats. Telling somebody, when I went through the program over three decades ago, it's a little different from somebody that has just graduated or that was in the original program, or is five years in their career, 10 years in their career. So a lot of what we do is these small cohorts really telling the story about the private bank, about wealth management. And then we have employees tell their story about what it's meant to them and their career, what they learned, what they focused on. And then they continue to mentor, advise and sponsor those students as they come through the program. So you can imagine if you're a sophomore and you're starting the program, you really need somebody that maybe is a senior or that just graduated, not somebody that's been out for 20 years. So a lot of what we've done with the program is just make sure that each of the classes are sponsoring classes that are coming in behind them. And that's really worked.



Chana Schoenberger (12:44):

Yeah, it's an interesting recruiting strategy. I had a wealth manager tell me once that the reason he got into the field was because financial advisory was one field where your success was determined by how hard you personally work, and he wanted that direct linear career path.



Katy Knox (13:02):

I will tell you what really resonates with the interns and the students is the component of the program that's service related. And I often tell them that you can find and explore your personal passions and your professional passion at the same time at Bank of America. And so we introduce very early into the program sponsorships and mentoring programs with organizations all over the world, and that drives tremendous engagement. And we let the interns and the associates actually run those programs. Right now they're mentoring 250 students in South Africa and over a hundred in Haiti. And those are just two examples. So I do think that there's a tremendous engagement around banking coming off campus because it's a formal program. The difference we found is really making sure that you find that personal passion as well.



Chana Schoenberger (13:57):

So what are the most exciting business opportunities you're looking at over the next year?



Katy Knox (14:01):

Well, we talked a lot about next gen. I love spending time with the next generation because they gave us so much terrific insight. It might be our digital app or what we should be looking at from a video perspective or social media. So I spend a lot of time not only with our own associates, but with our clients. And so tremendous focus there. There'll be a massive transition of wealth as you've reported on and talked about quite a bit. And so you want to make sure that there's engagement at every level of the family, the family office, even the institutions that we work with. I mentioned our art services that has grown pretty significantly largest art lender in the world. We've expanded our art services consignment, most importantly. The education component of that has been really exciting to introduce. And then our philanthropic group working with every generation and really strategically planning not only the giving, but that legacy that we often talk about, and just the goals of each individual and the family and making sure that we're making those broader connections for them.



Chana Schoenberger (15:13):

That's great. Well, thank you so much, Katy. It's been great to have you here.



Katy Knox (15:16):

Thank you.