Wealth managers are pressured to modernize their client engagement model to fit the new digital reality, where convenience and flexibility are key. The pandemic has created a unique opportunity for new companies to enter the financial sector and disrupt the status quo. Earlier, wealth management firms had been holding back on implementing new technologies because they are worried they might disrupt customer relationships, business practices, or reputations.
But with the shift to remote working and the increasing adoption of digital financial solutions, challengers now have the chance to provide hyper-personalized digital wealth management solutions that meet the needs of modern consumers. This shift in the competitive landscape provides a major opportunity for companies to capitalize on it.
In addition to meeting changing customer expectations, wealth managers must also find ways to increase productivity and efficiency in the face of declining profits and stricter regulations.
This blog is about how digital transformation can help wealth managers adapt to the shifting sands of the financial services industry and thrive in the post-COVID era.
How can wealth managers navigate post-COVID-19 realities most effectively?
Wealth management firms that wish to succeed in the future must focus on their strengths, offer clear client value, have a proficient digital presence, and provide affordable products and services.
- Put clients at the center
Customer centricity is a key ingredient for any successful digital transformation project and is at the heart of success in the traditional wealth management model.
But being customer-centric requires more than just a robust CRM system and top-notch user experience. It necessitates a multifaceted and well-organized approach that puts clients at the heart of the entire organization, all operations, and communications.
To be successful tomorrow, wealth managers must thoroughly understand all client journeys, their specific pain points, and what solutions they’re looking for. By being focused on the customer first and foremost, they’ll be able to create a digital strategy that is both successful and adaptable.
- Omnichannel and hybrid customer engagement
Though digitalization is an unstoppable force, there is still comfort in human interaction for wealth management clients. Customers feel more secure in matters concerning their finances and investments when they can talk to a live person instead of only communicating through a screen.
Adopting an omnichannel or hybrid wealth management services model can offer the best of both worlds – online and offline services. Therefore, finding the right balance between Robo and human touchpoints will be the key to any successful digital wealth management strategy. This way, you can cater to all types of clients and offer them the level of service they prefer.
- Bringing customer expectations at par with those of early adopters
Many wealth managers mistake only considering the millennial segment when developing digital transformation strategies, but this is only a drop in the bucket. Wealth managers should focus on early adopters if they want to move at scale.
These early adopters are usually digitally savvy individuals or self-proclaimed “tech evangelists” who will be more likely to interact online and provide essential user behavior insights. This helps reduce the risk of a failed product-market fit.
- Keep the outcome in focus, not the product
Traditionally, the wealth management business model is hinged on product selling, but as clients have become more digitally empowered and transparent, those same clients are demanding a more personal touch with their wealth managers. If wealth managers want to maintain their clientele and continue thriving in the digital age, they’ll need to shift their focus from products to offering goals or outcomes instead.
- Using automation for driving value
Complex and inefficient internal legacy systems have historically hamstrung wealth management firms. However, innovative fintech providers have developed various automation solutions that incumbents can use to harness emerging powerful technologies, such as AI, machine learning, and blockchain. This will strengthen operations and increase profitability.
Using advanced client profiling and data management digital tools, you can deliver customer experiences and products that are truly personalized and relevant to your client’s needs in the short and long term. This way, you can meet their needs and objectives more effectively.
To summarize, client-centricity is the key to digital transformation in the wealth management industry, as it has been shown to improve customer service and satisfaction while reducing costs. Hybrid advice and automation are two driving forces behind this trend, as they provide a more personalized and efficient experience for clients.