Digital transformation in the wealth management sector
The move to digital is a reality across all sectors and the wealth management and advisory industry is by no means an exception. The Covid-19 pandemic has provided a further acceleration to a process that was already starting to permeate wealth management giving it a decisive push. During their forced isolation more and more investors, even those from older age brackets, have become confident with digital as a means to interact with businesses and this is also true of wealth management providers. Recent research by ThoughtLab in fact confirms that 40% of investors report digital access has become a greater priority, and older, higher value investors are now demanding access to digital too . The industry remains, however, anchored to a traditional in-person style of advisory that, while indicative of quality concierge services, is no longer a perfect match to customer demand.
Digital onboarding as a competitive advantage
Research clearly highlights that digital services, such as apps and web portals are no longer just a nice-to-have in the wealth management sector but are becoming critical to staying competitive. In an industry once dominated by in-person meetings and ad hoc consultations, this signifies a seismic change and will position digital leaders at a significant advantage. The same report in fact highlights that digital transformation can increase productivity by 13.8% and revenues by 7.7%.
Getting your foot on the digital integration ladder
Businesses will not, however, be looking to replace systems entirely in their quest to digitalise, as the complexity and expense of this option make it unfeasible. Instead, to achieve rapid results, more and more wealth management firms are choosing for simple, composable services that are lean, flexible to integrate and tailored to their environment and can provide an inroad to further transformation.
Recent research by Forrester shows that one of the key areas where purpose-built solutions are providing a key launch pad towards digital transformation is onboarding .
Appway’s composable business solutions match Fincons Group’s integration approach based on the use of flexible, modular solutions that are tailormade to help the wealth management sector achieve digital transformation. By providing a first step on the ladder towards complete digitalization with automated onboarding, Appway is an ideal partner for an experienced international system integrator like Fincons Group.
Orchestrated onboarding to cut Not In Good Orders (NIGOs)
But digital onboarding is not just a useful way into further digital transformation, it plays a critical role in achieving a number of efficiencies, first and foremost a reduction in Not In Good Order (NIGOs) - documentation submitted with errors or omissions - which are one of the main causes of frustration for customers as well as staff. When the package of forms to open a new client account is created and submitted, missing or incorrect information will trigger a NIGO which requires the advisor or other staff to correct and amend the package for resubmission. This task often requires the advisor to go back to their new client for additional information and evidence. NIGOs are therefore at the root of a cascade of negative outcomes that range from bad customer experience to productivity loss.
By reducing NIGOs by 80%3 accounts can be opened and funded faster, improving cash flow and client satisfaction at the critical ‘first impressions’ stage.
Improve productivity with automation
Research also shows that after introducing digital tools, work previously carried out by 35-40 staff can be successfully completed by a mere 10 . With less time spent amending documents, clients are onboarded faster, and resources are freed up to focus on more constructive tasks such as building trusted client relationships and winning new business. The study also shows that typical customer onboarding times are reduced by over 75%, from two days to between two and four hours .
In addition to this, training new staff, can consume significant time and resources. Reducing that training onus by 80% with digital tools is clearly an exciting prospect for high-growth businesses that can thus upskill their staff to more valuable activity.
Compliance and auditability
Digital onboarding solutions that provide guided data gathering, leveraging specific business rules associated with the type of accounts, contribute to error reduction. More importantly, when these solutions are tailored to respond to national regulatory and compliance requirements, they avoid the need to manually type up and prepare paper-based documentation. Integrations with other systems, such as CRM, book of records, and digital signatures improve efficiency as well as trackability and transparency of processes.
Time to go digital
The digital gap between wealth managers and other services providers is widening. As onboarding is the very first interaction with the company, it is the ideal place to start laying the foundation for a seamless, integrated, digital customer experience. But research has also shown that improvements span much further than customer satisfaction: advisors that are no longer bogged down by paperwork are far more productive, compliance is guaranteed, and employees are more engaged and efficient.
The benefits derived by a digital onboarding process can be achieved by relying on the combined expertise and experience of Appway and Fincons Group, whose consolidated partnership can support wealth managers in their journey towards digital transformation.