How Physical Distancing Can Drive Innovation in Wealth Management Companies

When there’s a rupture in direct communication, remote channels will have to do. The digital transformation of wealth management had already been one of the key points on the industry agenda. The times of the pandemic have only accelerated this trend.

Now that remote activities dominate the landscape, both the digital and, in particular, the mobile channel of distribution and communication with HNWI clients have become increasingly important. Along with it comes the recognition that there is a need for further improvement and innovation if wealth management companies want to keep pace with the growing client expectations and the shortening of reaction time.

An opportunity to improve...

As companies advance their pandemic-driven digital transformation, there are areas where an upgrade or change in the way services are rendered can bring value both to clients and advisors. According to the survey by Capgemini mentioned in the 2021 World Wealth Report, HNWIs and wealth managers declare low satisfaction with the existing processes and interfaces.

The room for improvement is considerable. When it comes to:

• the intelligibility of products and investment options,
• the possibility to choose convenient communication channels,
• the easiness of onboarding,
• and the simplicity of used app interfaces,

the level of satisfaction of both groups varies between 47% and 52%.

...but not without data

What can provide optimal experience, is embedding both customer and advisor centricity in the design of products and interfaces. According to the mentioned report, this means focusing on the needs, context, behaviours, and emotions, which constitutes the so-called human-centered design. The approach becomes especially important when direct human presence is limited. It can be efficiently powered by the newly-critical asset – data, which brings value to clients and advisors alike.

The 2021 World Wealth Report mentions also that data- and insights-driven cultures help to realize benefits by properly recognizing client preferences and catering to the changing client needs. Rule-based mechanisms and advanced AI tools helping to target advice on the most searched-for products (based on online user activity and preferences), or defining optimal sales KPIs for advisors become highly valued features of private banking apps, both online and mobile.

Since physical meetings with advisor are less frequent, machine-generated data becomes a crucial differentiator. Private banking companies will need to look for new tools to provide proper data for incorporating new criteria into their portfolios and strategies. Providing concise and clear information is the next step.

The old-new essential

Communication has always been an important aspect of the advisory process, now critical also for maintaining high-quality remote relations. The Hubbis report “The Art and Science of Communication” states that the delivery of robust and simple communication is essential. The ability to exchange information effectively is a must-have, and it is not only about the multi-channels of communication but also the ability to give truly relevant advice in the client-friendly digital media, in the most optimal way and time.

This means both direct contact between advisor and client via calls, chats, and videos, but also through automatically-generated messages focused on particular investment content, and targeted at a select group of individuals. Clients call for simplicity, while the private banking offer consists of complex products; this is where advisors need to strike the right balance.

Taking customization to the next level

While operating in the digital – often mobile – channel, in which clients are already used to custom services, the logical next step is the so-called hyper-personalization. According to the abovementioned Hubbis report, hyper-personalization happens when an in-depth understanding of an individual’s preferences and what “makes them tick” is the base for every single contact with them. It’s a superior way to cater to HNWIs which adds value, especially in remote channels.

In these economically volatile times, when markets become sensitive and react strongly to any uncertainties, keeping clients up-to-date with robust reporting is absolutely crucial. But nowadays, reporting seems to be not only about the numbers. The new trend promotes providing more customized summaries that include not only hard market data, but also a personalized touch by RMs, and co-creation with clients. This is a fine attempt to make up for less frequent direct interactions with advisors.

The continuous progress

With so much focus on the digital, and the mobile in particular, in the reality of social distancing, we must remember the simple truth: communication still takes place between humans, and technology is only the facilitator.

This sheds some light on the job of relationship managers and the need to equip them with new skills and abilities through training. They will thus be able to deliver messages to clients through digital channels in a new, efficient way, catering to the needs of particular individuals and taking into account preferences of all generation groups, like Millennials or Gen Xers.

There is no doubt that the future, especially in the pandemic and post-pandemic times, requires both clients and wealth management companies to remain flexible and embrace change. That is why the continuous improvement of services, both digital and human, shall remain in focus. This way, when high return on investment becomes less obvious and requires more effort, the best quality of service will remain untouched.

About Comarch Wealth Management

Key Account Manager