IBS Journal June 2017


41


into the sector, says Schramme, is due to Objectway’s transferable expertise and knowledge base.


Blurred lines


When it comes to the industry at large, and the disruption taking place within it, Schramme thinks there is a blurring of boundaries. “There is a blurring between market segments – between affluent, mass affluent and high-net worth – where before they were quite segregated.” Now there is an entirely new term for those enabled by challengers in the wealth management space: the ‘emerging affluent’. “People are looking around, while growing in wealth and are wondering if they can still use their existing retail bank,” he says. “It’s becoming a new battleground because it’s all about retaining the client while they’re travelling through lifecycle.


Software, solutions and offerings are also experiencing a blur. “In the past you had execution only, advisory and discretionary approaches. Digitisation is enabling the possibility of dipping into other segments and creating a much more multi-faceted platform.” Before these kinds of platforms were very “rough” but now are becoming more sophisticated with the help of digital disruption. Objectway doesn’t see new online investment methods as something which will displace the traditional ways: “It is not an either/or reality, it’s an end-to-end reality. The traditional way will still exist and will be complimented by online solutions in different flavours.” Organisations will have to think about digital methods, but should always approach them from a hybrid perspective.


“What I think is really important isn’t the volume of digital-first organisations in the industry, what their real differentiating aspect is that they can change the norm in the market. ‘Digital first’ organisation are clearly the leaders in customer satisfaction.” That factor, says Schramme, is the ultimate “exclamation point.” Digital- first firms “raise the goalposts” for customer satisfaction and customer experience and all other organisations have to follow that trend. The creation of a new norm is the vital role that startups and challengers play in the industry. Consumerisation is changing the way that


investors want to be advised and engaged with. “In the past a financial institution decided how a client could interact with them. Now the investor is defining how he wants to engage with his financial institution and the pressure is on to find the interactions that he desires in a frictionless fashion.”


Dealing with the New Norm


There are “a few” ways that incumbents can deal with this wave of change sweeping the industry, says Schramme. “When digital solutions enter a market, commoditisation starts. It’s already started, but how does an organisation differentiate themselves?” Mass customisation is the answer, he says, providing a tailored, personalised service but in a factory-style fashion with excellent scalability. “You can create a sticky relationship with your investor that in the past was established based on a face-to-face contact. You need to provide “a service for an audience of one”: not for anybody else.”


Big bang changes should be avoiding at all costs, though. “I would say don’t try and wipe everything out and put something completely new in. You’re taking an incredible operational and business risk. It’s about incremental improvements, the right kind of multi- year journey.” It’s important that firms don’t try and create silos from their back office up to the customer engagement level. “Don’t let your engines dictate how you interact with your end clients. A few years ago, that was how it happened. It was complete nonsense.” Schramme says that the ultimate technique is to “unify and unbundle” – to unify the customer experience across all access points but unbundling it from the mid/back- office processes. “Your interaction with your investor is driven by completely different factors than what drives your main engines.” One is about engagement and fulfilment, the other about regulatory compliance and operational excellence.


“You can work perfectly with your existing legacy systems but should make sure that you have a loosely coupled channel platform that can support a hybrid client-advisor interaction. This hybrid interaction reality


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