Wealth Management Goes Digital
Digital wealth management is the use of technology to help clients manage and grow their wealth . It also offers investors a range of savings and investment products. The wealth management industry is on the verge of digital transformation. With clients demanding greater personalization and efficiency,wealth managers are adopting digital strategies to remain competitive. Given below are strategies that wealth managers should adopt to make sure that they are adapting to the needs of customers.
Omnichannel customer communications and engagement
Omnichannel customer communications in wealth management is a strategy that allows organizations to communicate seamlessly across all print and digital options, depending on the investor’s choice of channel and format. It is important to identify gaps in communications strategies, because these might cause friction in client experience. Investor communications should address the emotional side of recovering from the economic downturn of the pandemic, and other personal situations that may have impacted consumers’ lives.
Automation for growth
Automation is an essential facilitator of growth for wealth management. According to leading financial consultants, a sizable amount of business processes related to investing can be automated. This includes KYC checks and data centralization. Automation of day-to-day activities such as investor report consolidation, automated portfolio rebalancing, and fee processing, drives higher and faster ROI.
Prioritizing customers
The new wave of investors which include Baby Boomers, GenX, and GenY investors want to be treated as individuals with specific preferences and goals. They are willing to do their own financial research, and should be given tailored advice. Customers should be made the center of digital transformation strategies. Firms should analyze how customer expectations are changing, and should make sure that they are adapting to fulfill them.
Focus on the outcome
Rather than focusing on generating the highest possible portfolio return, outcome or goal-based investments measure clients’ progress towards specific life goals, such as saving for children’s education or building a retirement nest-egg. Focusing on the outcome is different from traditional investing, as the focus is put on how well the investor is able to meet their personal life goals rather than on how well their investments perform against the market average. This necessitates the use of advanced client profiling and digital data management tools, so that clients receive truly personalized and relevant experiences.
Use of big data
Wealth management firms should adopt more descriptive and predictive analytics that combine internal and external, structured and unstructured data, to create more complete and insightful client profiles. This method will allow firms to assess existing or potential clients’ propensity to purchase various products and services, their lifetime value, their style of investment, and their tolerance for risk. The use of big data can help firms guide their customers to make more informed investment decisions. Big data helps wealth management firms gain informational edges and push boundaries by moving beyond conventional data sources and leveraging alternative forms of data.
