Objectway were proud to have recently been part of the Global Wealth Tech summit in the first week of November bringing Wealth Managers, Private Banks and Asset Managers together to discuss the major challenges within the industry and what the future priorities look like.
We shared insights on a lively senior level panel discussing the importance of a ‘Customer centric business model in wealth management’.

Objectway’s recent research with senior executives from financial firms showed that improving the customer experience and adopting a customer centric business model was particularly high on the agenda, and firms believe that digital change will be critical in enabling this over the coming 12 months. At the same time, customers expressed a strong desire to improve their current hybrid offering.

For example, they stressed the need for a more dynamic portal and personalised interactions with their wealth managers. Digital transformation could enable the wow factor for customers in a number of ways; by making hyper personalised reports/educational information available on the customer portal, automating many back end processes to allow more time for the Investment manager to actually add value to their customer. Compeer’s end customer data shows that three quarters are actually more likely to speak to their wealth manager as technology improves, again stressing the importance of an effective hybrid wealth management offering between digital and face-to-face components.

So what are the main challenges to providing a customer centric business model?

The panel and audience discussed the need for a cultural shift and the need for the industry to effectively put themselves in the customers shoes much more as opposed to presuming what the customers want from a superior experience. Encouragingly, there has certainly been a positive change in this direction as many firms are conducting end client research and using a ‘customer first’ approach when designing end-to-end journeys. The panel mentioned the importance of creating ‘Wow moments’ or ‘moments of delight’ which should be a must have for future customer experience. These are likely to be the differentiating factor that determine whether a customer is likely to stay and refer their Wealth Management firm.

What’s more, the current legacy IT architecture which most firms are burdened with does not lend itself to efficient processes (let alone adding a personalised element). For example, there is often too much re keying of data, reliance on multiple disparate systems and resulting manual errors and significant time wasted on administrative tasks by people who could be adding value to their clients (if these tasks were automated). The panel also discussed the potential use of data analytics to know your customer better and be proactive in making recommendations. Most firms are at an early stage with respect to data analytics and we described how this may work via Objectway’s portfolio optimiser which uses customer preferences in an intelligent way to suggest tailored products/funds to the Investment Manager and/or the client.

What is possible through a customer centric approach?

The panel discussion focused on what can be achieved in practice through a customer centric approach and we discussed a real-life case study to demonstrate the impact technology change is having on customer experience and the resulting business metrics for Wealth Management firms here and now. For example, firms have seen a doubling of digital engagement as measured by use of client portal within 18 months of implementing a dynamic portal, which has also led to an increase of 25% of AUM (far outweighing market increase). Effective digitalisation has also resulted in an improvement of front office effectiveness as measured by more than 20% more clients per front office professional (largely due to automating processes). The outlook for improving customer experience is positive although a lot of work lies ahead.