Digital wealth and asset management technologies are attracting greater market attention, headlines and customer interest alike. Yet when it comes to effective use and integration of these technologies, wealth managers lag behind banks and other industries.
In the past, addressing legacy technology challenges and reducing the cost base associated with existing platforms were top drivers for digital transformation projects. However, as the speed of technological change continues to accelerate, offering digital platforms and services such as self-service apps, omni-channel customer interactions and robo-advice have become more necessary to offer customers increased choice and maintain market share without increasing cost to the provider.
As a result, instead of tackling large-scale, complex transformation projects, some asset managers are now looking at smaller technology investments to see where they can achieve the greatest value. For example, organisations are creating apps that customers can use to view investments and initiate transfers, or providing tweaks to existing apps to increase customer engagement, such as allowing sign-in using facial recognition.
Across the financial sector, new technology and changing customer behaviour is driving change at an ever-increasing pace. Banks have responded by providing online self-service options and more choice for customer interaction, allowing customers to engage however, wherever and whenever is most convenient. In contrast, wealth and asset managers have been slow on the uptake. Traditional models now need to be broken down and refocused on the customer’s journey, with technology used to provide more choices, increased flexibility, and deliver on expectations more quickly and easily.
However, with the myriad ways, technologies and platforms available to achieve these goals, it is no surprise that organisations can get bogged down. From AI and Robotic Process Automation to chatbots and robo-advice, organisations often spend considerable time assessing how and where these technologies can be used, and which options provide the best fit moving forward. Organisations need to avoid these traditional blue sky visions and detailed technology roadmaps in favour of a fast and iterative “test and learn” approach. This approach tests application of technologies to specific process elements through smaller proof of concept initiatives, seeking to prove effectiveness within the business itself—as well as to deliver quick wins.
As companies seek to deal with their legacy applications, they seek to invest in package technology platforms, either as a fresh investment or as part of a re-platforming project. A package platform provides wealth and asset managers with a proven model and out-of-the-box functionality, making it an appealing route forward. However, as seen in the headline-grabbing issues Aviva experienced when moving clients to their new FNZ-backed platform, even use of proven technology is no guarantee of a frictionless experience. When looking at any public-facing implementation, it is important to assess the full risk profile and seek ways to phase implementation to minimise disruption to the client base.
Insurers looking to work with digital wealth and asset management technologies are recommended to:
While making smart technology investments is always a difficult prospect, delaying decision in aid of finding the perfect solution delivers worse results. By testing new technologies in pursuit of small and quick benefits, wealth and asset managers can help accelerate their process of technological transformation in order to remain competitive in today’s changing market.
Article original published in The Digital Insurer's June 2018 newsletter – Test, learn, win: Digital transformation for wealth and asset managers.