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analytics, you can be more sharp in terms of the data you show to the client and you can gain insights to see how you are progressing to your goals as a client.”
While some companies are having issues in the area, many firms are already using data to their advantage. Pirker cites the example of Merrill Lynch which provides an adviser workflow called Merrill Lynch One. The $100 million project merges five siloed managed account platforms into one and offers a complete view of client accounts, allowing advisers to efficiently supervise assets and offer advice. “It’s a client centric workflow allowing the firm to keep advisers focused on the client and comparing products.”
Meanwhile, DBS Bank in Singapore trained IBM’s cognitive computing technology Watson over nine months to gain insights that would help it to better serve customers. Milan Ganatra, CEO at Miles Software, says these types of systems are already playing an increasing role in wealth management: “It’s early days but we are in conversations about what our technology can do for clients. People want things to be less cumbersome.”
As the drive to improve customer interactions continues, most experts think a hybrid model will be sought by many wealth management companies. As part of this, Boot observes, firms are looking to create interactive digital advisory platforms. This will allow the client and adviser to meet virtually and discuss investments. It will also enable firms to offer value added specialist services that “the wealthy are willing to pay for”.
After all, says Pirker: “Clients want things that add value.” However, he adds: “At the same time, firms have to learn from clients via the self service engagement layer: They should be looking at interests, the age of clients, and be smarter about it, not bombarding everyone with the same sort of information.”
Another growing trend is cloud technology – which is being increasingly used to reduce infrastructure costs. Among its benefits, according to Kotsiopoulos, cloud allows relationship managers to take better care of their clients’ portfolios. “Cloud technology gives easy and secure access, as well as value for money in terms of IT infrastructure and productivity.”
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Previously, firms used to run their own technology stacks. However, Stebbing says the drive towards better client interactions is seeing wealth management moving away from in house solutions towards outsourcing processes. “Outsourcing also means someone else can be responsible for increasingly complex regulatory requirements. This allows companies to stick to what they are good at: Managing relationships; helping customers make decisions; and assisting with complex regulatory requirements, tax planning and ever- increasing lengths of retirement.”
Meanwhile, the software is improving. This enables applications in the cloud to “play together better”, argues Pirker. This has partly been driven by open APIs. “And then you have custodians and clearing firms building platforms. Companies can then just snap things together”. Pirker notes that a growing number of companies want to own the engagement area. “Bigger organisations are saying they want to own and differentiate, but then plug in platforms. At the back end you are looking for efficiency: firms talk about ‘headless implementation’ or ‘taking the user interface off’ and owning that. You spend money there and plug in cloud- based CRM, for example.”
But as use of cloud increases and the software and applications around it, cyber security becomes more a significant concern. Already, identity thefts and personal financial crimes are increasing at a faster rate, and this requires a higher spend in the area. Cyber security is a growing issue as the points of interaction between the client and financial organisation increase, says Boot. “It is not only clients that are at risk. Advisers are also potentially vulnerable to social engineering techniques, for example phishing messages from bogus clients trying to gain access to confidential information.”
There is mounting pressure on wealth management and meeting requirements will be a challenge for some time. But technology investment is the only option. Ganatra’s advice? “Use technology as much as possible. Even if you think advice can’t be delivered using robots or cognitive technology, customer experience is the key factor for success and therefore, it should be your main focus.”
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