Digital hearts, analogue minds: how to use digital innovation to get personal with clients

Oct 2019 · Finance

All too often, there’s a false dichotomy between traditional client management and digital innovation.

Either you’re an old fashioned, face-to-face relationships type of firm, or you’re a futuristic, innovative AI-hub solving every client problem with efficient but faceless automation. And not only do these approaches determine how you relate to your clients — they also end up influencing your entire brand.

Yet despite its popularity, this vision of traditional-and-human vs digital-and-automated isn’t very accurate. Innovation shouldn’t mean facelessness. When applied intelligently, digital innovation doesn’t replace your personal relationships with clients; it improves them. And increasingly, clients are demanding customisation that only digital innovations can bring.

To understand why, it’s worth considering the relationship between finance and the revolutionary new technologies seeking to shape it. Digital ‘disruption’ has taken longer to affect the financial sector than many other areas of society. Forbes claim that almost half of financial services firms don’t leverage data as much as they should. But recently the pace of change has sped up, and we’re now witnessing the dramatic rise of ‘Fintech’.

These technological shifts are changing clients’ expectations. For example, they want more customisation in their service relationships. A recent report commissioned by Broadridge (‘Power shift: digital behaviours reshape client-advisor relationships’, 2019) reveals a demand for investment ideas tailored to individual client needs and preferences.

The next generation of investors want their financial services to be conducted entirely online, with greater customisation. Millennials are much more keen for their wealth advisers to give them personalised analysis of their investment habits, for example.

Even more strikingly, Broadridge’s report demonstrates that one in four clients would consider walking away from their financial advisor because of substandard customisation. This rises to 35% for Millennials.

It’s supported by a report from EY (‘Could your clients’ needs be your competitive advantage?’) which reveals that 4 in 10 clients would change their wealth manager under the right circumstances, amounting to $175–200bn in assets. EY’s report concludes that this represents a huge opportunity for ‘firms that get ahead of the curve and use client experience as a competitive advantage’.

On the one hand, these insights demonstrate just how important it is to meet traditional client needs. A personalised service has always been in demand in one form or another, so it’s no surprise to see that it is still crucial.

But they also hint at new solutions — and huge rewards for those firms who take advantage of them. Demand is strong for both digital innovation and increased customisation. Together they can dramatically improve client satisfaction and experience, strengthening your firm’s retention and brand power.

Rather than being antithetical to traditional forms of client engagement, digital technologies can take it further than ever before. This can happen across the entire range of touch-points. From following your prospects on social media to developing a bespoke online on-boarding process, there are plenty of opportunities to demonstrate your presence, proficiency and personality to prospects.

But it’s not about digital for the sake of it — it’s about engaging with each segment of your client base on their own terms. The Broadridge report highlights that while 89% of Millennials would welcome their financial advisor following them on social media, the number drops to 59% for Generation Xers. Knowing your audience is paramount, regardless of the platform in question.

Thankfully, data offers instant feedback on whether your approach is working, allowing you to continuously hone your service. A/B testing allows you to understand your audience’s preferences by sending out two different messages simultaneously and monitoring the click rates. Online surveys can reveal unheralded preferences. Data analytics can enable you to provide much more tailored analysis on each client’s investment habits.

Taken together, these techniques help to create a better client/customer experience. Just as the old methods of face to face meetings and letters in the post helped to build trust, authenticity and understanding, so too can digital innovation and the data powering it. Organisations are changing their approach accordingly. According to McKinsey, 75% of the world’s 50 largest banks have are committing themselves to transforming their customer experience.

And it’s not just banks. More and more financial services firms are realising the potential of harnessing brand engagement and digital innovation to create customised client experiences. When a joint report by Adobe and Econsultancy (‘2018 Digital Trends in Financial Services’), asked financial services respondents to list their organisation’s ‘most exciting opportunity’, the most popular response was ‘optimising the customer experience’, with 28% of the vote. Another 23% claimed that ‘data driven marketing that focuses on the individual’ was their most exciting opportunity. Firms that fail to keep up with this race towards customisation could find themselves losing customers.

Ultimately, these innovative techniques can define your brand, differentiating you from the competition. As Broadridge’s report highlights, a firm’s reputation was the ‘key deciding factor’ for 41% of clients. Creating digital customer experiences that truly represent your firm’s values and capabilities is vital in building the kind of reputation that wins and retains clients.

As more of our identities are formed online, clients are growing increasingly discriminating with the type of treatment, engagement and reception they receive. Harnessing the full potential of digital technology is now synonymous with providing excellent customer service.

It’s no longer just an add-on or an IT issue. It’s the difference between success and failure.

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