In its crusade across industries, digital disruption has taken another scalp – this time Wealth Management. Fintech has been around for a long time, but the impact of disruption has recently been felt more aggressively by wealth managers.
The service traditionally involves a great deal of human interaction, partly due to its complexity and partly because clients feel reassured by a friendly face and a knowledgeable mind. But as our dependence on technology grew, the arrival of so called ‘robo advisers’ was inevitable.
Now, people with cash to invest can log in to an automated self-service platform and build their portfolio with minimal human contact. It’s straightforward, but not necessarily the best option. However, for the flesh and bones wealth manager it still signals a new competitor and therefore a threat to revenue, just at a time when private wealth is increasing in the Middle East and Africa.
Despite falling oil prices, private wealth in the MENA region will hit $7.2 trillion by 2018, reports Khaleej Times. Managed assets have tripled over the past decade, and there’s plenty more room for growth. Therefore, reacting to new threats like the robo adviser is an absolute must, especially as new market players cause client expectations to change.
Although technology may have caused this challenge, it’s also what you need to overcome it, and prove the unsurpassable value that traditional wealth managers can provide. I’m referring to customer insight technology, which gives your hard-earned academic knowledge a digital edge.
The characteristics of this platform deliver in every area that customers demand today: personalisation, transparency and control, accessibility, convenience, and cost. When it comes to how their money is managed, clients want to feel like you’re paying them special attention. You need to prove an understanding of their individual circumstances and offer advice that is relevant to their financial aims, life goals, spending habits, and appetite for risk.
Clients also expect a seamlessly brilliant experience every time they interact with you, whether it’s face-to-face, online or over the phone, and know that you’re always there when they need advice. But most of all, you absolutely must offer a service that is a wise investment in itself. Customer insights do it all, and that starts with analytics.
IBM built its own Client Insight for Wealth Management platform to be powered by advanced analytics and big data, because they’re at the very core of how you need to service clients today. You can now dig deep and view things like psychographic information, which tells you about a client’s personality and feelings. Past behavior can also be tracked and analysed to help you better predict what clients may need or do next. A cognitive element, like IBM Watson, can even give you a helping hand with the decision making by offering suggestions for which products and offers are most suitable for individual clients.
All of this is pulled together on one platform, alongside an overview of the most active clients, predictions of who may leave soon, and a breakdown of your KPIs. That’s a lot of valuable data all in one place, so it’s easy to see why human expertise combined with customer insights are far superior to any automated service.
But personally, I feel the biggest advantage you gain from customer insight technology is the efficiency with which you can now serve your clients. Of course, due diligence is still vital before you offer up any financial guidance, but you’ll be able to do it faster than ever before. This frees up time for whatever you need to grow your practice, like nurturing the human side of every business relationship. That’s one thing no robot can ever compete with.
For a quick snapshot of IBM’s Client Insight for Wealth Management platform and what it can do, click here.