Following additiv's article in our Swiss Wealth Technology Landscape Report 2020 which was entitled, ‘Now is the time to introduce an end-to-end digital journey’, we went back to additiv to ask them a set of five further questions on what they mean by an end-to-end digital journey in wealth management.
Why do you say the time is ‘now’ for firms to introduce an end-to-end digital client journey?
Even before COVID-19, client consumer behaviour was changing. A younger generation of investors, and tech savvy consumers in general, with expectations in line with their online shopping experiences, needed to be served. In addition, we were already seeing a global trend for financial inclusion, leading to wealth inclusion requiring affordable access to financial investment. This trend was in line with a growing middle class in emerging markets and represented an attractive client segment for wealth managers.
With COVID-19 cost pressures are now further intensifying, invested wealth declining and, as a result, profit projection is worsening materially. At additiv we believe that being truly digital can counter-balance these challenges while supporting changing client needs. For example, digital allows financial institutions to increase efficiency to cope with lower willingness of clients to pay high banking commission and fees and offers the ability to target products and support accurately to attract and retain clients. And now with COVID-19, the need for social distancing has made being truly digital even more urgent. We therefore expect to see an unprecedented level of digital transformation in operating, servicing and sourcing models in the future.
What does an ‘end-to-end digital journey’ mean and what are the constituent parts that need to be in place to deliver it?
In principal, an end-to-end digital journey means that a client doesn’t need to go to or call a bank, he doesn’t have to send any documents and contract papers to a bank to open an account/portfolio, to be informed, to manage and execute it. In essence it means that all type of administrative tasks can be done online and automatically. Everything is embedded in a seamless, easy to use and understandable process - a user journey.
To be able to leverage all the benefits digital offers, financial institutions may need to undergo digital transformation. Fortunately, the core banking platform doesn’t need to change; your digital wealth platform should be able to easily connect without much integration work through a loosely coupled API architecture.
Where do you see most wealth managers on the path to deliver an end-to-end digital journey, what do they have in place now and what factors have got them to where they are currently?
Today most wealth managers have a basic online banking system available for their clients. It is often limited to cash account management including payment and credit card services. Already a basic portfolio overview with historic performance numbers and the possibility to execute some basic security transaction is not very widely spread.
A real end-to-end digital journey from onboarding to bank with a secure identification and know-your-client process, risk profiling taking client knowledge, experience, suitability and appropriateness factors into consideration is relatively rare. For most wealth managers these are often still manual processes, but regulations require that for an advice-led offering, an end-to-end self-service cannot be offered.
Furthermore, it requires a risk-adjusted advisory and/or discretionary offering with a good track-record to be successful. Leading digital end-to-end investment journeys include goal setting functionalities as well for accumulation and/or decumulation purposes, simulation features of various good and bad scenarios, detailed performance contribution analysis and advisor-led client supporting features.
Today most wealth managers are one way or the other in the process to increase their digital offering – especially since they have struggled to deliver consistent and high-quality customer interaction in the time of social distancing. Although the pressure for higher efficiency and the need to grow the top line, increases the pressure to introduce an end-to-end digital journey for their clients. We are convinced that the assets under digital advice are growing now consistently at about 5% per annum.
What are the benefits that firms will achieve from the delivery of an end-to-end digital journey?
An end-to-end digital journey means higher efficiency for advisors to have more time to focus on the important things and generate more revenues. Offering services available 24/7 from anywhere means an expensive branch network isn’t needed and allows for greater income generation through an increased service offering outside of office hours. And with the ability to quickly develop and offer new services, a new and maybe untapped client segment can be accessed, along with increased revenues through additional commission income to existing clients.
In addition, digital increases insight which allows for a greater level of understanding both in terms of client needs and risk. Eliminating the human element means that fraud risk can be better controlled. Add to this the possibility to drive analysis about client behaviour and the introduction of AI, and digital can offer a truly valuable service to all.
What is additiv doing as a business to support wealth managers in the delivery of an end-to-end digital journey?
Digital isn’t the future; it is the now. Our solutions enable our clients to be 100% digital. They cover the full end-to-end customer journey, from onboarding to risk profiling to funding to proposal to e-signatories, and supports a wide range of asset classes, not just ETFs.
These uniquely intuitive solutions are all built upon our award winning, established platform, DFS System of Intelligence. Being fourth generation, it is fully road-tested, very stable and fully enterprise-ready, and it can be taken out of the box and implemented very rapidly and intuitively in the cloud.
However, the value we bring must be realised quickly, this is why we recently launched our KickStarter™ implementation solution. Available in the cloud, KickStarter™ is an integrated SaaS implementation package which provides the building blocks for unprecedented rapid delivery, transforming our clients wealth business in under three months.
KickStarter™ allows easy access to additiv’s solutions, including Hybrid Wealth Manager, which offers an optimum digital customer experience allowing users to access our platform through self-service, in person or a hybrid of the two. With KickStarter™ instant digital transformation can be realised without the need for any capex spend or any implementation costs and it includes initial data loads and a sufficient level of customization. In fact, KickStarter™ clients only pay SaaS fees.
Ultimately, at additiv we are proud to be championing a truly digital end-to-end customer journey experience that has been created with our clients (and their clients) needs in mind, that will enable them to navigate (and thrive) in these challenging times.
Read additiv's original article in our Swiss Report here:
Download the PDF version of the Swiss Report article here:
Download the Swiss WealthTech Landscape Report here: https://docsend.com/view/2b56ksz