It’s no secret that Wall Street lives in constant fear of Silicon Valley. Bank CEOs probably wake up in a cold sweat after imagining that their clients have handed their money to some new startup that’s found a way to disrupt a financial service like, say, wealth management.
To try and fend off the robo-advisers and other fintech companies trying to wrest every bit of market share away from the big banks, Morgan Stanley is launching its own suite of apps, meant to win over younger clients who prefer digital products. On Tuesday, the bank announced its latest offering: its very own digital mortgage application tool.
Morgan Stanley is developing a new digital mortgage application tool in a bid to get more of its existing clients to turn to it for home loans, its wealth management technology head said on Tuesday.
Morgan Stanley has invested heavily into growing its residential mortgage and customized lending business in recent years. But only 2 percent of current clients have home loans with the bank, Naureen Hassan, chief digital officer for wealth management, said at the bank’s U.S. Financial Services conference in New York.
Hassan said the new tool will allow clients to get rate estimates, upload documents and apply entirely online. She did not say when the bank planned to launch the platform.
The announcement follows a deal the bank made with 10 technology firms back in January to help improve its digital offerings by introducing a suite of new financial apps, including an investment-tracking software called Addepar and a payments app called Zelle that’s being launched in partnership with three other banks. The digital initiatives are apparently a priority for Morgan Stanley CEO James Gorman.
“We’ve got to be careful that we are not penny wise and pound foolish,” Gorman told Reuters when the bank first announced the initiative back in January.
With revenues from traditional businesses like trading and wealth management set the shrink, and so-called roboadvisers like Betterment offering to provide essentially the same service as Morgan’s army of financial advisors but for much, much less, banks are eager to explore new businesses that could become long-term sources of revenue.
Morgan Stanley isn’t the only Wall Street firm looking to expand its digital offerings: Reuters revealed back in March that Goldman Sachs is hiring coders to build its very own roboadviser for the “mass affluent” market (a.k.a. poor people).
But apparently where Goldman sees opportunity, Morgan Stanley sees a line that shouldn’t be crossed: Gorman told Reuters that his bank is sticking with a business model that favors wealthier customers. Though he did leave the door open to someday serving those who want purely digital advice.