Wealth Management Is More than Just Managing Investments - EPAM

Panos Archondakis 10 August 2020


EPAM, the digital platform services firm, argues that the experience of all wealth management users – client and advisor - can be gradually improved by a series of individual changes. This article examines specific examples that can be put into action.

Much has been recently written about the evolution of wealth management, from the disruption posed by new entrants, such as robo-advisors through to changing behaviours, demographics and expectations of clients, and the replication of digital experiences that are commonplace in people’s daily lives. 

Along the way, the wealth management business has become more complex, more cost-conscious and more regulated. Advisors struggle to keep pace with real-time expectations, personalised investments and a need to serve more clients.

It is not as easy to find practical examples of change, leaving some fundamental questions unanswered. For instance, how is it possible to make a high-touch ultra-high net worth personal advisory relationship seem unique and valuable when conducted entirely over a mobile device? How is an advisor to cope with the demands of personalisation, of serving increasing numbers of clients and the need not just to monitor but proactively to respond to markets, client preference and regulatory complexity across every jurisdiction in real time? 

There is of course a huge variety of features that can be implemented across the spectrum of bank and client activity, but we focus here on three examples to show how the following high-level concepts could be applied:

1. Personalisation – it starts with knowing and understanding a client and their preferences; it starts even before becoming a client; “onboarding” should be a memorable talking point for all the right reasons. 
2. Social – sharing, discussion and second opinion are almost anathema to the wealth management relationship; outside of a few investment specialists or close family, privacy is traditionally strictly enforced; this approach is fundamentally at odds with the changing social behaviour of modern clients.

3. Actionable – an unfortunate consequence of easy modern communication is the volume; we are bombarded with information but only a tiny fraction of it actually answers the question “So what?”. To stand out, communication should provide value, suggesting or informing a course of action or material change. An advisor will benefit most from not from having more screens, but from having specific, actionable and relevant recommendations displayed on those screens.

Onboarding and personalisation
For too many banks, the customer prospecting and acquisition process is a lengthy and painful exercise that starts with the best possible presentation of the bank’s expertise, credentials and commitment to the client, revolving around wood-panelled meeting rooms, expensive lunches and other events. This unfortunately descends very quickly into a drawn-out process of physical document exchange, repetitive and intrusive questioning and opaque delays for the completion of internal “processes”.

There is a sense of relief at the conclusion and all the golden promises of personalised investment service, advice beyond banking, goals and other benefits are sidelined and forgotten during a period of recovery.

We think there is a better way. At every step of this journey, from the very first interaction with a prospect, the bank is acquiring information. Current situation and goals are almost the first thing that will be discussed, informally at first, but where does data go? Through all the interactions that precede a formal decision to begin onboarding a wealth of relevant data is shared – ad-hoc, anecdotally, in conversation, or even formally; this is all relevant either to completing the formal onboarding checks required for compliance, or to inform the bank's view of the client and to drive future interaction, recommendations and advice.

Advisor and prospect both access online tools for collaboration and transparency during onboarding.

This data should be captured, in real time or through subsequent input by an advisor, in whatever form is relevant. This can be audio, image (especially to record documentation), notes and even video. Where possible and permitted, KYC and other mandatory client checks could start on day one, rather than waiting for a symbolic “Go” decision to start. When that does eventually come, all data that has already been captured should be used to prevent a client ever having to provide a piece of information twice. The resulting significant reduction in onboarding time, coupled with very simple techniques aiding transparency and to highlight progress can provide enormous benefit in customer satisfaction.

In many (if not all) banks there is a reticence, driven by history and industry practice, to probe, record and use clients’ data; however, many of the biggest firms on the planet have built their entire business models on the acquisition and monetisation of client data. There is a huge gap between the current state of client profiling and personalisation in banking and the industrialised processes employed by these technology giants, and a long way that banks could go towards using the data they have to improve personalisation applying well understood and tested techniques. This can be done within the constraints of necessary banking privacy and regulatory data protection, sensitive to client sentiment and subject to explicit consent. It is worth bearing in mind that concepts of trust and expectations over privacy and the use of personal information are very different in modern digital natives than in their predecessors.

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