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Using technology to engage with clients: The view from Appway (part 1) - market view

Q&A with Chiara Gelmini, Senior Wealth Management Industry Marketing Manager at Appway

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by Appway
| 29/06/2020 13:51:15

What is your view on the current state of the market with regards to how wealth managers manage their engagement with clients? What are they doing well, what are the challenges and what areas could be improved?

In the past years, the financial services industry has been hit by multi-dimensional, dynamic disaggregation with impacts across the value chain, channels, data and systems, and the regulatory landscape.

Now, the new coronavirus (COVID-19) is challenging the industry on a whole new degree of disruption, compelling all of us to do what innovation programs and initiatives failed to do before: It has forced us (and will continue to force us) to revise and revamp digitalization strategies, as well as the corresponding tools and equipment.

Innovation and transformation dominated strategic priorities in the pre-COVID-19 era, though with “arbitrary” and shifting emphasis. Although more hybrid models of interaction were emerging, the high-touch physical interplay was seen as the “Plan A”, while digital engagement was the “Plan B”.

In the post-COVID-19 era, priorities will align with the challenges of the most recent crisis: operational agility, alternative working environments, and an acceleration of investments in digital tools to connect firms with their clients and employees.

Digitally-empowered human engagement is now the default “Plan A”.

Although the full range of COVID-19 impacts has yet to be fully understood, firms have to start thinking acutely about the needs of a population that chooses to, or is forced to, interact in a paperless and physically disconnected world.

The ‘new normal’ must include modern ways (remote channels and digital products) to engage with investors, allowing for business continuity and resilience, while addressing client needs from the simple (e.g. opening an account for individuals, small business owners, or small-medium enterprises) to the complex (e.g. onboarding trusts and complex structures with crossjurisdictional legal impacts).

We see three main challenges for the financial services industry:

1) Implications of a ‘bear’ market
Wealth management clients’ needs are sophisticated and their goals are fluid, strictly correlated to changes in life circumstances; 80% of HNWIs state their investment goals will change in the next 5 years. The unpredictable coronavirus pandemic has already had impacts on clients’ priorities: Recent statistics show an increase in prospects’ demand for financial planning advice, as many investors are now living with indefinite volatility.

In order to stay competitive, firms need to engage with existing and potential clients along their entire life journey, and help them navigate major events and market fluctuations as intelligently as possible. To do so in the post-COVID era, the right engagement technology (and more broadly CLM technology) is essential.

The ‘right’ technology is one that allows for both internal collaboration across a firm’s departments and seamless interaction with clients from within the tool itself, thereby enabling advisors to identify critical moments in the customers’ lives and automatically trigger the necessary workflows to support them.

2) Increasing need for digital collaboration
Our research shows that, at the end of 2019, HNWIs of all ages saw their digital footprints as extensions of their face-to-face relationships with wealth firms, yet most clients were not satisfied with their digital experience. The industry needed to upgrade that digital experience by recording and integrating client preferences into business strategies.

Firms must look to digital and real-time collaboration tools – video conferencing, digital document management, digital signature, video identification and biometrics, cloud services – and should apply intelligent automation to lessen operational burden, while enabling the agility to apply changes, manage risks, ensure compliance, and protect against fraud.

It is now compulsory that wealth managers digitalize client engagement and make high-touch service available in a virtual, remote way. Clients can then choose the channel best suited to them.

3) Demand for the marketplace model and greater operational agility
When it comes to client engagement and lifecycle management, our research in 2019 showed that HNWIs want their wealth manager to take inspiration from the ethos and initiatives of Big Tech companies; Amazon was ranked as the top firm for WMs to emulate.

Investors want access to a broader marketplace from the outset, as they do with Amazon. Wealth management firms can differentiate themselves by offering a more diverse suite of products and services from a wide variety of sources which can be easily accessed in one convenient place.

The new coronavirus crisis highlights examples of banks implementing the ‘one-stop shop’ model wherein they offer health- and education-related tools, such as online doctor consultations, or online video-based lessons for kids. These services were tremendously popular: DBS Singapore’s free COVID-19 hospital cash insurance policy, for example, recorded more than 52,000 sign-ups a day at its peak; 475,000 customers had viewed Ping An Bank online lectures on mutual funds, PE investment, and financial laws and taxation.

In order to provide clients with broad marketplace access, it is crucial to adopt intelligent orchestration within the firm’s IT framework, which translates to greater operational agility and resilience. This approach allows firms to seamlessly integrate third-party services, while streamlining digital client interactions. Products and services offered from a wider marketplace will be relevant and client-centric, thanks to a 360˚ view of client data.

Post COVID-19, organizations must reinvent their offering to secure clients’ participation in long-lasting, profitable advisory relationships.

They need to leverage this new ‘virtual reality’ to stay close to their clients and advise them proactively by presenting hyperpersonalized products and services that align with their life events while adapting to changing circumstance and solving challenges.

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This article was originally part of The Wealth Mosaic's WealthTech Views Client Engagement Report. You can access and download the full report here: