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High-Touch in a Low-Touch Environment Series: Wealth Management – Webinar Summary and Key Takeaways

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The time is ripe for high-touch and low-touch environments to converge for the wealth management sector. On May 20, I had the pleasure of participating on the panel of Delta Capita’s High-Touch in a Low-Touch Environment webinar. Hosted by Delta Capita’s commercial officer, Julian Eyre, I was joined by industry experts Anand Rajan from UBS Wealth Management U.S., Hugh Adlington from Close Brothers Asset Management and Barclays’ James Penny. (Please click here to hear the full recording of the webinar).

Julian did a great job of chairing the panel. As I expected, the panelists shared similar views about convergence between high-touch, low-touch and the future of digital client services in the wealth management industry.  We discussed strategies to reduce costs and increase revenues in a wider digital engagement context. We also pondered what tools are missing from our current portfolios to bridge the gap between low-touch and high-touch client engagement, and the roles of mobile, machine learning and AI. Furthermore, we talked about how the recent Covid-19 lockdown affected our client engagements and we introduced our digital client engagement services.

Following are some of my takeaways, with credit to my friends and colleagues’ insights.

1. Wealth management clients need a seamless solution, regardless of age or tech sophistication

A personal relationship is the foundation of the wealth management business. Traditionally, wealth management will be a high-touch business. The clients are frequently high-net-worth individuals with experience and expertise in complex financial products, serviced by specialist human relationship managers.

Many wealth management clients hail from the older generation and are at least 60-years old. Some of them will use email, their mobile phone or their PCs for certain, low-risk digital services but will only meet person to person when it involves large or very confidential transactions. Some of the clients are satisfied with a quarterly or annual visit to their wealth management financial advisor (FA) and do not demand digital tools. However, the younger generation is going to be the nextgen clients of wealth management.  These clients are already more sophisticated, and will want digital client engagement tools that match their mobile and digital savvy. But they will still need humans to provide guidance and work together with the technology.

2. Human relationship has to remain, even for millennials

For the wealth management industry, the human touch will not disappear. Solutions will not be run solely by robots and nor will artificial intelligence replace emotional intelligence. The timing of the Covid-19 crisis and lockdowns left some wealth management clients in limbo. This was caused, perhaps, by the gaps in the wealth management’s digitalisation program. For quite a while, we have been speaking about having to keep up with the times and advance technologically, but we still thought it would take another few years. Some books and movies relay scenarios about robots taking over tasks, and managers being out of a job. But that doesn’t have to be the case. Digital tools are now essential. It’s not something you want to have, but need to have. Even though the industry is at a technological crossroads, these solutions have to enhance the personal touch rather than replace it.

3. Technology should reduce time and increase productivity

Today, we realize how much time we previously spent, prior to the pandemic, on travel and meetings. Using online conferencing platforms like Zoom or Skype means that my clients aren’t obliged to meet me for lunch. Julian pointed out that we will see slimmer wealth managers!  Seriously, though, technology should reduce the time you need to spend on mundane tasks. By automating these administrative procedures, we can concentrate on important stuff like managing money and nurturing relationships.

You can’t give clients a one-fit-all solution, and need to cultivate client engagement for each case. Fire drills and emergencies are still going to be done face-to-face for a long time, or at least by telephone. But if technology will automate the standard procedures, that will let me provide more personalized service to my clients for their tailored situations.

In addition, increasing financial regulations will require more reporting and best practices. It’s not just that there is a multitude of regulations, but these regulations are changing constantly. Handling all these reports by humans is difficult, if not impossible. Manually entering data in one system and then having to replicate it in many systems is a recipe for error. That’s where AI, machine learning and analytics can speed productivity and help minimize errors.

4. Delight clients at the onboarding and KYC stage

There is a lot of fintech out there, but some of it is complex, and there are a lot of providers. Low-touch digital tools are prevalent and prolific in the after-boarding stage. It’s common to be able to see the state of one’s assets, see transactions, cheque deposits via your mobile phone, online trading transparency and more.

But we’re missing efficient and simple to use tools at the prospect stage. We think that fintech companies should focus on the onboarding stage, by concentrating on Know Your Customer (KYC) and anti-money laundering (AML) solutions. Regardless of how much technology we introduce, this is a people industry, and there will always be fraud.

So what can we do? We don’t need to travel to the depth of the desert to collect an identification document. Neither do we need to ask clients hundreds of questions before they are enrolled; when the internet can do due diligence and reduce risk of fraud. Delta Capita offers a range of managed solutions that allow financial advisors to process prospects seamlessly, convert them to customers, and keep them there with relevant communication. The managed solutions are powered by a portfolio of platforms and tools including CallVU for processing and signing forms from clients’ mobile devices, together with their FAs, and Qlarium for automated AI-based due diligence.

5. Consolidate technology to be efficient and relevant

The lockdowns showed us that working from home can indeed be effective, in certain cases. Some of the work was shallow and responsive, as opposed to more strategic work, which is more difficult to be done remotely. We need to keep an eye on the tech sector to see how to consolidate solutions and avoid overlap. The landscape and demographics have changed. As more and more clients become digitally sophisticated, financial advisors require the right platforms to facilitate better productivity while complying with international data and security regulations.

Consolidating technologies, fintech providers should evaluate what a company wants to achieve, who their digital clients are, and what is the level of their digital acumen. The right solution ideally will leverage existing technologies, and reduce data overload, whether it’s web-based, phone, mobile, or human.

6. Reduce risk of migrating legacy systems

Many wealth management systems are based on businesses that have been around for twenty or thirty years. Migrating them to more advanced technology is fraught with risk. Some financial institutes, in the race to keep up with digital transformation, have invested a tremendous amount of time and money, only to find out half way through, or towards the end of the process, that the new systems were not compatible. Consequently, the companies had no choice but to revert to working with their legacy systems.

Again, Delta Capita offers managed innovation services powered by the prooV platform, helping companies effectively plan their migration and minimize risk of incompatible systems, after the fact.

The current crisis has highlighted the importance of high-tech tools for remote lifecycle management. That’s my summary in a nutshell. I encourage you to click here to hear the full recording of the webinar.