The asset management industry has never distinguished itself as a leader in digital innovation. The traditional institutional investor isn’t the kind of client looking for a fancy online offering, so asset managers have focused heavily on other priorities, not least fulfilling new regulatory requirements that have emerged in recent years. As such, digital has taken a back seat.
Now, however, demographic change and digitalisation have turned this thinking on its head. Today’s institutional investors are more demanding when it comes to online tools and experience. Additionally, an online presence is a must for reaching new markets and segments, and retaining customers – all vital ingredients to increase revenues. It’s a simple rule: better websites drive more sales. While retail banking and wealth management have already realised the need for digital services to drive revenue, the asset management industry is only just starting to appreciate their importance.
So what’s the current state of play? Some asset managers already have a well developed online presence, but none of them seem to have a comprehensive online experience that combines useful tools with appealing design and specific functionalities. Great web design attracts customers but also supports clear messaging, especially given the amount of ‘noise’ that clients have to filter when they are online. Moreover, clients will be turned off if they cannot quickly find what they are looking for, and even valuable content is often worthless if the design is messy and frustrates rather than engages.
Today’s well-informed and discerning users also need DIY tools to surf the product universe, gather information and filter expert knowledge. A simple product finder fulfills these demands for both individual clients and businesses. In addition, video messages from product managers can spark new relationships. This is especially important with new clients, who may be open to significant cross-selling opportunities when identifying products for themselves. While an existing client might also use such tools, they especially value the time-saving administrative components of an online portal. For example, a well-thought-out document management tool or customisable reporting and simulation tools (e.g. scenario modelling for portfolios) significantly enhance customer experience, simplify client account management and reinforce the relationship between asset manager and client – all important for exploiting new markets and segments, and increasing revenue.
Once the basic foundation has been laid, asset managers must keep thinking digital. Next steps could be providing multiple communication channels, such as instant messaging and video conferencing, or enabling clients to access information on the go by providing device-friendly content or a mobile app that attracts customers and new business. Providing valuable online content such as real-time news, an insightful response to current events and other ‘insider thinking’ further enhances the end-user experience.
These features are highly relevant to the institutional investor, but they are equally beneficial for potential individual clients. Providing ‘non-professional’ clients with access to the complex world of asset management remains a big challenge, so an online presence that not only focuses on analytical content but also offers a fulfilling customer experience is essential for attracting wealthy individuals in addition to institutional clients.
In most cases it is not the user front-end where asset managers struggle. The devil lies in the data, and more specifically, in the back-end architecture. Few global asset managers maintain a data architecture that supports simple implementation of the features discussed so far. In addition, there are many other aspects to be considered – multiple sources of documents, data verification, user entitlements, CRM integration, security issues to name a few.
The benefits are clear but the journey towards an effective digital presence is less so. Finding the expertise – and the resources to build a state of the art client-facing website is the first important step. In the many cases an asset management team will want to work with an experienced partner that delivers the following:
The good news is that once the partnership is in place, deployment is relatively fast. That said, organisations need to act quickly - the potential for digital innovation in asset management hasn’t yet been fully explored and an early-mover advantage is still up for grabs. But the opportunity won’t last long.
André Brunner is a Partner leading the Capital Markets practice at Capco Switzerland. He has over a decade of investment banking and asset management experience gained through industry and management consulting roles, leading projects for major financial services providers. André’s main areas of expertise lie within the delivery of large scale IT platforms and the transition of related business processes.
Delia Steiner is a Senior Consultant within the Capital Markets practice at Capco. Her main project experience includes digital innovation, regulatory transformation and front-to-back-end integration. She has strong knowledge of the asset management industry and risk management in particular.
The content and opinions posted on this blog and any corresponding comments are the personal opinions of the original authors, not those of Capco or FIS.