Wealth management transformation

Wealth management transformation

Wealth firms overcome growth challenges through transformation around clients and channels.

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KPMG in the U.S.

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Sunlight through trees

The wealth sector is experiencing unprecedented competitive pressures and the growth challenge has already hit many wealth firms. The world’s wealth management firms have recognized the need to respond
by embarking on customer-driven transformation programs that will require:

  • a wealth business model focused on key growth areas

  • an integrated multichannel wealth service model that addresses how the firm supports advisors and clients across channels
  • a strong core digital offering, with additional capabilities added in specific segments to differentiate service
  • insights from data analytics to focus the wealth business model, operationalize the strategies and deliver a personalized customer experience.

The path to wealth firm transformation

The critical and logical first step for organizational transformation is to refine the wealth business model and place strategic bets around key growth markets and segments. Investments in deeper insights into wealth customer needs and behaviors are often required to then sharpen the value propositions and service offerings delivered to meet these needs. With this foundation in place, many firms are then able to realize that there are opportunities to simplify customer offerings by focusing on the core services that will drive future growth and exiting tertiary services that are not contributing to customer and shareholder value creation.

With a sharpened business model in place, the firm can adapt their operating model
to architect a differentiated wealth service model, which is positioned to attract and retain clients and deliver a more engaged and integrated customer experience across channels.

Aligning wealth client expectations and channels

An integrated multichannel service strategy, enabled by the right business architecture and customer focus can help wealth firms realize growth and margin improvements. In order to achieve this business potential, firms need to re-think key aspects of how the firm supports advisors and clients across channels. We have found that an in-depth analysis of customer, channel and product profitability – including an examination of high cost, inefficient and toxic customer servicing processes – can serve as a catalyst for re-thinking existing transformation program investments.

The role of the digital channel in a traditional full-service wealth management model is beginning to crystallize and the role of an advisor remains central to serving HNW and UHNW clients. Digital strategies can drive new forms of customer engagement.

To achieve customer experience ‘parity’ with the experiences being delivered by a digitally enabled wealth start-ups, traditional providers will need to deliver a very strong digital ‘core’ offering, which addresses crucial customer experience priorities and strengthens the overall relationship between the firm, client and advisor.

Wealth customer analytics to focus and operationalize the transformation

  • Customer analytics and insights are critical inputs to re-focusing the business model, shaping new value propositions and refining customer segmentation strategies:
    • Mining internal and external information sources can drive deeper insights into customer wallet share and relationship penetration.
    • Integration of socio demographic and behavioral characteristic data can help firms identify micro-customer segments.
    • Predictive analytics and scenario- based modeling can improve the effectiveness of relationship-based pricing strategies to attract additional assets and penetrate banking and lending needs.
  • Advanced analytics can also be used to operationalize growth strategies and enable a more personalized customer experience across channels.

  • Digital customer experiences become much more personalized and relevant to addressing relationship needs, by leveraging customer insights
and tailoring the communications messaging to the unique servicing needs of micro-segments.

Opportunities from wealth firm strategies

There are opportunities for firms both large and small to thrive in this competitive landscape. Over the next 3–5 years, some firms will emerge as the clear leaders and ‘providers of choice’ in serving investors for the next decade.

Capitalizing on this window of opportunity will require firms to embrace change, sharpen their transformation agenda and accelerate the delivery of innovative advisor and client-facing solutions to deliver a differentiated service experience.

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