May 16, 2020

Three Ways Technology is Galvanising Client Engagement

Wealth Management
Alessandro Tonchia, Co-Founder...
6 min
Traditionally an annual review with a smattering of touchpoints over the year has been sufficient to retain an established customer base, but high net w...

Traditionally an annual review with a smattering of touchpoints over the year has been sufficient to retain an established customer base, but high net worth individuals’ (HNWIs) evolving expectations mean that old loyalties count for less than the lure of dynamic new market entrants. As we hurtle into a new decade many wealth managers are really feeling the pressure to demonstrate greater levels of customer care and deliver an all-round lifelong enhanced customer experience. 

Digital technologies could provide the key to improve existing practices, finding and retaining valuable business and ultimately delivering a more compelling customer experience. Co-Founder and Head of Strategy at Finantix, Alessandro Tonchia outlines three scenarios where digital solutions are helping wealth managers up their game.  

Client profiling beyond the honeymoon period

The onboarding process is the point at which wealth management firms can learn the most about their clients in one go. Not just because of the practical reason of the sign up process, but psychologically speaking – whether it is the first time they have engaged a wealth manager or they are moving from a long-standing relationship elsewhere, they are much more likely to be open and eager to talk about their goals, aspirations and expectations. It is therefore vital that wealth managers extract information on their client’s lifestyle, passions, concerns and goals as early as possible to create the most accurate profile so they can start as they mean to go on. 

In an ideal world, this kind of profiling will inform all decisions that are made on behalf of the client for years to come. But as we all know, life isn’t that simple. The truth of the matter is that as soon as the client leaves that first meeting, it is possible that one or more pieces of information they have just provided could change. 

The responsibility of keeping client information up to date often lies on relationship managers’ (RM) shoulders, but there are a number of sources that can also help them that are being underutilised, often due to the constraints of legacy systems. By using technology that complements what is already in place and to smartly apply analytics across a wide range of data sources related to clients’ profiles, wealth managers can maintain understanding of their clients far beyond the honeymoon period. With this kind of technology, events relevant to specific individual clients can be searched for simultaneously, across multiple data sources in real time using artificial intelligence (AI). 

The living and breathing usage of data to provide actionable insights, saves precious RM time to provide the best possible level of service and also grant priceless peace of mind, ensuring any and all risk is flagged and acted upon in the most appropriate way. 

Reaping the benefits of a truly customer-first CRM

When Customer Relationship Management (CRM) systems were introduced in the mid-90s, they revolutionised the way firms interacted with their existing and potential clients, allowing them to consolidate contacts, leads, and opportunities in a more streamlined way than ever before. 

CRM tools have evolved immeasurably over the last 25 years to factor in changes in customer behaviour and the explosion of data and are still changing the game for industries that have relatively straightforward transactional customer requirements, such as consumer businesses. However, when it comes to industries like wealth management, where intangible elements are being sold, including cash flow and risk mitigation along a financial lifecycle, effective CRM becomes more difficult to obtain. 

Wealth management firms today need technology that allows a client-first perspective. What that means in practice is a system that can generate touchpoints when the client needs them, for example, when the markets are moving in a negative way or when the client has a life event that would require some rethinking of their current investment strategy. Tracking this kind of information requires linkages to portfolios, products and performance that generic CRMs alone just can’t facilitate. 

Upon realising the limitations of ‘broad brush’ CRMs, some wealth management firms have made further investment into technology to fill in the blanks e.g. portfolio management or market information. This approach gets closer to obtaining the kind of client-centric, proactive sales and advice symbiosis needed to make the new wealth management client engagement model happen. If those disparate systems don’t interact with each other, these firms are forced to take a piecemeal approach. To ensure prior technology investment isn’t made in vain, the best course of action in this case is to work with providers who have the specialist knowledge of getting these systems working in harmony to create an environment that captures complex and evolving information throughout the client lifecycle. 

Technology can do the heavy lifting, so you can focus on the value add

Once the aforementioned client information is obtained, it can be used in an abundance of ways to enrich clients’ experiences and shape every single touchpoint. Many practitioners may read this and think that is all well and good in theory, but what happens in reality? One could argue, a nigh on impossible task when applied to the entire client base. An understandable viewpoint when you learn the sheer extent of portfolios that are being looked after per RM at any one time. Research shows a quarter of UK RMs serve 51-100 clients each and 15% even more, while in Asia’s premier banking segment ratios of 400:1 are common.

This is where technology underpinned by AI can add considerable value. AI can lift much of the burden on RMs by automating compilations of reporting information and even preparing agendas for discussion using the status of clients’ investments, content of past interactions, the firm’s current investment thinking and any other relevant information. It can even eliminate menial tasks, making appointment setting and collating emails in preparation for a meeting a thing of the past. 

The new model of customer engagement is no doubt only possible with an injection of digital technology, but that needn’t mean ripping existing systems out and starting from scratch. There are ways of dynamically linking client data to financial events and opportunities with minimal disruption, enabling wealth management firms to achieve the ultimate aim – making each and every client feel like they are the only ones that matter.


About Alessandro Tonchia

Alessandro Tonchia

Alessandro Tonchia is one of Finantix’s co-founders, and as head of strategy focuses on the company’s growth and overall direction. He is responsible for communications with major clients, business partners and analysts worldwide. Alessandro has represented Finantix in various capacities related to product development and global account management, and has been responsible for the implementation of wealth management platforms. Before establishing Finantix, Alessandro was a consultant specialising in the areas of process management and CRM.

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Jun 10, 2021

FIVE things fintechs must do to keep investors onboard

Brandon Rembe, CPO, Envestnet...
4 min
Fintech innovations drew in first-time investors who reshaped the markets. What new advancements will help them continue their rise?

New investors flocked to the stock market during the COVID-19 pandemic. Thirty-eight percent of investors said they had never had a brokerage or similar account before opening one in 2020.

Low or no-fee trading options have helped accelerate the trend – nearly half of new investors said they accessed their account primarily through a mobile app. As FinTechs, how do we create the trust needed to keep new investors in the market and create a fruitful customer experience for them?

The financial industry does a disservice to individual investors if we merely offer tools that focus on making money quickly, an approach that usually backfires. Instead, the surge of interest presents an enormous opportunity for those who want to help more consumers use financial technology to educate them on responsible spending, saving, and investing in order to achieve financial wellness current fintech tools have welcomed individual investors in the door.

Now, it’s time to focus on education and improving their experience going forward. There are several ways those of us in fintech can step up to shape the future of retail investing so that it works better for everyone, starting with the following areas.

Equal access to financial wellness education

Financial health should be available to everyone — but today, not everyone has the educational resources to achieve it. One study shows that only 3.9% of students from low-income schools were required to take a personal finance class. What they aren’t learning in school or from family members, fintech companies can provide on their platforms.

The companies should move from solely offering financial services to a more responsible model of education, advice, and prescriptive choices to help consumers develop better habits and make wiser financial decisions. Not only can they empower consumers and bridge historical wealth divides, but they can also stimulate growth by opening up new consumer segments.

More personalisation

Just as we’ve come to expect that our fitness routines are tailored to our individual bodies, we’re also ready for finance tools that go beyond one-size-fits-all solutions. But only six percent of financial institutions say they’re using the kind of technology that allows them to deliver a deeply personalized experience. Fintech tools need to reflect that financial success looks different for each of us.

For one consumer, it may mean providing guidance on how to pay off student loans early; for another, it may mean prescriptive actions that enable them to stick to a budget for the first time; for a third, it could look like prioritizing environmental, social and governance (ESG) investments, so that her portfolio aligns with her political beliefs.

Now, we are seeing financial technology beginning to meet the demands of personalized finance in a substantial and meaningful way.

The rise of AI-Powered Advice

Big-picture advice and predictive guidance used to be a feature of high-end financial advisory firms — a perk only available to those who could afford it. But thanks to rapid advancements in data analytics and artificial intelligence (AI), that kind of holistic advice is now more accessible than ever. AI-driven robo-advisors can parse many different streams of financial information, delivering customized answers to key questions: Is it time to buy a home, or is it smarter to keep renting? Can I afford to take out another student loan?

Intelligent connectivity powered by AI can anticipate consumers’ needs and next steps, making proactive suggestions that guide them along the path to financial wellbeing. Fintech companies can also help consumers identify when their financial picture becomes too complex for a robo-advisor, and help them find a human financial advisor to meet their needs. 

Focus on financial mental health

New investors are quickly finding that the market can be overwhelming. That’s not surprising, financial anxiety is common and studies show that financial stress can have an impact on mental health for some.

It’s not enough for fintech companies to give retail investors access; they also must provide the guidance and support that help consumers manage their financial well-being. Educational tools can ensure that consumers are well informed about their options.

Predictive analytics can anticipate consumers’ questions, serving them key information and insights before they ask. Features that emphasize a comprehensive notion of financial well-being, rather than short-term wins and losses, can also help ensure that consumers are keeping their eyes on the bigger picture.

Gamification for good

The surge of gamification apps has done an impressive job making investing as engaging as playing a video game or joining a social media platform.

Much of the current use of gamification emphasizes short-term thinking, but there’s also an opportunity to help consumers think more broadly about their overall financial picture. One example is peer benchmarking, a feature that enables help consumers to see how their financial habits compare to those of friends and fellow consumers.

Gamification can also be used to incentivize making smaller, smarter choices — for example, rewarding saving over making an impulse buy.

The future of fintech is about more than just broadening access to the markets. It’s about making sure more individuals have access to the tools that can help improve their financial well-being—in the ways that suit their own circumstances and needs. The potential to act within their own set of individual priorities, with their long-term financial wellness in mind is much more empowering to a consumer than simply relying on short-term, high-risk investments.

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