Digital transformation in asset & wealth management – catering for the future investor

When it comes to digital transformation, specifically as it relates to client interaction, the asset and wealth management industries have generally lagged behind their banking counterparts – showing slower adoption of technologies to ease and improve customer experience.

According to PWC’s report ‘Sink or Swim: why wealth management can’t afford to miss the digital wave’ – which draws on interviews with wealth managers, CEOs and fintech innovators, and insights from a survey of 1,000 high-net-worth individuals (HNWIs) worldwide – only a quarter of wealth managers offer digital channels beyond email.

The report also states that only one in ten wealth managers employ social media with their clients and many are only now investing in web portals and basic mobile apps.

In a recent interview on the Kurtosys podcast, Nerina Visser, director and co-owner of etfSA Portfolio Management Company also commented on this stating that there was certainly room for digital disruption in the asset management and investment industries: “The large asset managers are comfortable in their space, with well established distribution channels, doing the things they’ve always done, so the pressure hasn’t really been on them to address digital transformation…”

The investor of the future

Why is it so important for asset and wealth managers to transform into digital businesses? Quite simply because that is what their customers want.

According to Capgemini’s Top-10 Trends in Wealth Management: 2019 report the new generation of high-net-worth (HNW) clients, especially those in their 20s and 30s, are increasingly looking to digital channels for their wealth management needs.

These clients are not adverse to receiving wealth management services from non-traditional sources and demand personalised and proactive interactions at the click of a button.

Meanwhile, EY states that the majority (59%) of wealth management clients surveyed by the firm stated that digital will be their preferred channel for receiving advice within the next two to three years.

This means that if asset and wealth managers want to keep with the times and avoid losing customers to fintechs and robo-advisors in future, they have to adapt now and accelerate their digital transformation.

However, this is easier said than done. So where should asset managers start to ensure they get the most out of their digital efforts? We have a few suggestions.

Digital Transformation Tips for Asset and Wealth Managers

In the recent Kurtosys white paper: The Road to Digital Maturity for Investment Managers we outline a number of areas that play a vital role in digital transformation in the asset and wealth management industry. These include becoming customer-centric, using the right technology, managing and leveraging data and investing in people and culture.

As such we believe that these four focus areas are a good place to start if you’re looking to accelerate your company’s digital transformation.

Becoming customer-centric

According to KPMG 89% of CEOs expect to be competing on the basis of customer experience over the next five years. With this in mind, it’s easy to see why becoming more customer-centric should be one of the main steps you take on your digital transformation journey.

While your customer buying cycle is likely complex, with multiple stakeholders involved in each step of the process, making improvements to your buyer journey is still possible.

Start by mapping and recording the journeys of your existing customers. This will enable you to identify which processes are working well and where improvements can be made, to ultimately provide your customers with the best possible experience.

Another way in which your business can become more customer-centric is through improved personalisation for different audiences. In 2018, Gartner predicted companies that have “fully invested in all types of personalisation” will outsell companies that haven’t by 20%. Technology has become the enabler to getting a personalisation strategy right, but success comes back to becoming truly customer-centric across the board.

Using the right technology

Digital transformation is impossible if you don’t have the right technology in place. But how do you know if the technology you’re implementing is the ‘right technology’.

Firstly, the right technology for your business will solve a problem you have, save you time and reduce the burden of manual tasks – usually through automation. For example, document automation where frequent documents are required with updated data and regular content. Effective document automation (at scale) relies on an aggregated and accessible source of data – once established, that ‘golden’ source of data can be utilised across documents, websites, apps and distributed to third-parties and partners.

Efficient cloud-based technology will also offer integration with various other platforms and tools allowing you to seamlessly manage all your business processes and tools.

Managing and leveraging data

Data is the bedrock of marketing and sales in most enterprise organisations – all major decisions are backed up by data of some kind. Therefore, ensuring that your data is organised and easily accessible is an important step to move towards digital maturity.

A good place to start is to look at your company’s CRM – all your company departments need to have the ability to load data into the CRM so sales executives can see up to date data on all your customer accounts and contacts.

Armed with this data your sales and marketing teams can target prospects with more personalised messages, which will in time lead to increased sales.

Investing in people & culture

Digital transformation is not only about the technology you use, but also about the people using this technology, which means true digital maturity is only achievable if your employees are on board.

According to research by McKinsey in 2016, culture and behavioural changes are the most significant barrier preventing companies from meeting their digital goals. While this research is a few years old, we believe it still holds true – to move to a truly digital culture you need to provide your employees with the necessary support and training to make the shift to a more digital way of working.

The future is digital

While it might seem like a cliché the future is in fact digital, and the sooner your company gets on board with this and starts offering a fully digital experience the more successful you’ll be. The time is now for asset and wealth managers to identify areas within their businesses that are ready for digital transformation and disruption.

To learn more about how to move your company swiftly towards digital maturity, download our white paper The Road to Digital Maturity for Investment Managers today.