How is data being used in the wealth management sector today and what benefits are you seeing? Also, what improvements do you expect to see in the future in wealth management if data is more efficiently and effectively utilized?
There have never been as many tools, FinTechs and platforms in the market as there are currently. Although the majority of these tools provide something compelling to the advisor or client, unfortunately, they also create more silos, data discrepancies, disparate data sets and, on the extreme side, more avenues for data leakage and security holes.
The large platforms cannot provide everything to everyone, but they do need to be more integrated with the market. We are starting to see a more open API framework from the bigger players, but there is still a long way to go for a truly integrated network. The connectivity can be complex but experienced service providers exist who can assist.
It has been great to see the evolution of practices embracing business intelligence over the last one to two years. What was once a huge expense continues to rapidly reduce in cost. This will be truly transformational for businesses embracing the power of smaller data warehouses with proactive business intelligence reporting. ‘Big Data’ & “Data is the new oil” might be overused buzzwords, but the true value for the advisor competing in the market for clients (and time) is by using their data better in ‘real-time’ they will enhance customer engagement and retention and improve operational efficiency which will lead them to increase capacity without additional investment (i.e. Do more with less!)
The additional benefit of the ‘warehouse’ is the compliance framework that comes with it. The practice, advisor or responsible manager (RM) can see compliance gaps in real time, and not too late when the regulator comes knocking.
We surveyed 100 of our clients in 2021 and the average quantity of client data applications running in the business was eight. We also discovered shadow IT (the unknown applications touching client data and not connected to a common framework), highlighting the risk growing in the industry.
On the positive side, our clients that were further along the scale for data maturity were seeing benefits from sticking to their strategy. Most research and real-world learning points to some key points to be successful when starting your ‘Data Journey’.
- Have everything align to the end-goal (i.e. When you spend all this time and money doing it, what is the end-goal for the business, staff and client?)
- Have a very clear implementation strategy and get buy in from key stakeholders within the businesses. You need to get the back-office involved early so they think and know they own the change management; it will fail if you don’t.
- Choose the tech and run with it. Either connect what you have better or put in an integration layer to align it all and clean it before you get excited by the next bright light. When you create the clean, integrated baseline it is far easier to kill what isn’t working or upgrade to more feature rich or client centric applications.
- Be accountable to see it through and celebrate the success. Embrace the new tools and insights by creating a better client journey. Get the feedback from staff and (warm) clients and make it part of a continuous improvement program rather than trying to be 100% perfect day one and never pulling in to the station.
When the data is clean and connected you provide a more efficient, tailored service to your client. You can easily see the gaps you may not have addressed, and align better services to their requirements. You will provide a superior client experience and retain your staff.
All of this data mining leads to lower cost of advice. Whether this is increased profitability, decreased cost to the client (or both), it is a win.
What solution(s) does your business offer to the wealth management sector that focus on data? How do they work and how do they help wealth managers?
All Umlaut solutions are focused on ‘Human-Centered’ efficiency. With the cost of advice rising, there needs to a focus on automating data handling and ‘doing more with less’. Valuable staff need to be client-facing and tools need to be focused on allowing practices to service more clients while reducing data handling.
API-driven data automation is the desired outcome. Data creation, capture, processing and integration are all components of what refer to as the ‘Data Journey’.
Umlaut Connect is our largest platform and product suite. It allows any business to securely digitize, transfer, save and manage its business and client document management process with its seamless integration solution. With over 60+ applications and data sources connected into a data warehouse feature, we make it easy for your team to find information and ensure compliance. We provide tools and solutions that are modular. Document management, workflow, intelligent document processing (including handwriting capture), client onboarding, KYC reporting, Fact Find processes are all components that can be connected to, or simply augment your existing System or Record (SoR).
AdvisorTools is our secure portal to assist with secure data collection, review and onboarding. This is a practice focused tool built to kill data entry. With a few clicks, advisors can customize forms at a client level to prefil from existing systems, work the clients to update information and sync the updates to the System of Record. By using the platform to connect with documents, reporting and third-parties, you reduce the risk of data leakage, automate follow ups and become laser focused on the work without distractions.
Insight is our data warehouse platform published to Microsoft Power BI and a secure web portal. Umlaut will link all of your disparate data sets, including revenua data (via API, CSV reporting, or other), match your clients and provide KYC reporting and a full KRI/KPI dataset for risk and compliance. All of the features ensure proactive reporting and activity management rather than the traditional and current reactive.
Umlaut Migrate + Hyperscience is the data migration and capture service we provide to process bulk data and capture relevant information. We can take copies of unstructured data (e.g. DropBox, OneDrive, File Servers) and third party databases and migrate to Systems of Record (e.g. XPLAN or other) through integration. Hyperscience is our intelligent capture service where we can identify doctypes, rename, extract KYC data and provide security layers with our Redaction as a Service (RaaS). You can remove Personal Identifiable Information (PII) such as tax or social security information, credit card and bank account numbers from the images.
As much as we are a SaaS business, we are a service business. We learned the hard way you can not allow ‘click and connect’ SaaS in this industry. Everyone is time poor so we bundle set-up, personalized training and go-live support with all the tools we provide. We don’t want to be the ‘shelfware’ we survey in six months time!
Umlaut have invested heavily into the Project Success & Customer Success team and framework. We run discovery workshops with our clients for gap analysis prior to implementation. The processes might be similar, but the business is unique; the partnership and implementation needs to be the same.
Change management is the biggest (and hardest) piece of the puzzle. Although we all want to change the world overnight, if we don’t plan it well we kill culture. If multiple components are identified, the businesses need to plan it with the staff so there are no surprises. If you don’t get the buy in, the projects usually stall or die. We work with our clients to ensure this risk is mitigated.
This article is part of The Wealth Mosaic's recent WealthTech Views Data Management Report. Access that full report here.
