How far along are wealth and asset managers in the digitization process? What else still needs to happen to get us to the next stage?
The transformation is still in its infancy. Most of the traditional wealth and asset managers continue to preserve and protect existing revenue streams based on non-digital ‘business blueprints.’ In particular, the role of the human interface is stereotyped relative to robo-advisers or algorithms with the argument that humans in essence only relate to humans. This is fundamentally wrong, as humans relate in the wealth and asset management space to value and value only. Hence, what will get us to the next stage is an understanding of value creation by human advisers, and ‘human interaction as a service’ (HIaaS) around trade-offs.
What are the best ways firms can design a customer experience that will appeal to an existing customer base as well as the next generation?
Historically, wealth and asset managers have been rather one-dimensional in their channel approach to clients. Technology has fundamentally changed the way we access information and this seems to be true irrespective of demographics. As such, I do not strongly advocate ‘generational’ or ‘gender’ segmentation. I would rather recommend designing means of collaboration with your customers based on social needs, i.e. create inclusion, team dynamics or peer-to-peer-connectivity. You do not want to create a ‘customer-base legacy’ but rather create an eco-system of interrelated ambassadors.
How is automation changing the role of wealth and asset managers?
As indicated before, automation puts more emphasis on value creation. Technology is after all a commodity and does not idiosyncratically drive success. Wealth and asset managers need to create their ‘value space’ by skillfully combining technology and HIaaS or alternatively by designing services without any kind of personal intermediation. Whatever the approach is, strategy follows customers and unless you create value for your customer, you should not be in the game in the first place.
In an evolving digital landscape, how can firms most effectively utilise client and company data?
The wealth and asset management space is obsessed with data. In a digital world, your starting point is though whether your data is big and holds value. This may sound counterintuitive, but your challenge is not just to target broadly, but also to personalise your services deeply. Moreover, for that to successfully and continuously happen, you need to think outside of dashboards, connect siloed data, and merge data from the past with data from the moment. Your goal is to answer important customer questions on the fly. I doubt that the majority of wealth and asset managers hold these capabilities today, which makes them vulnerable to fintechs and tech companies in general.
How do you choose the technology that will be the best fit for your firm?
That is a very difficult question to answer. However, whatever your path is, do not try to outsmart your competition with technology, as this will not work - it is a commodity. You can only outsmart your competitors with your value proposition. ‘Customer service magic’ is created by connecting the dots
Why will you be speaking at Finance Edge's Digitizing Wealth & Asset Management Summit, and what do you hope to get out of the event?
It is a great privilege to be speaking at the summit and to connect with all the subject matter experts. I concluded a long time ago that mastering the digital future is only possible through collaboration. As we do not know what we do not know, it is in a digitised world that displays unprecedented developmental velocity, even more relevant to listen actively to what other people have to say.