Customer Experience, Consumer Duty and digital transformation: designing for change within finance

Consumer Duty regulations along with ongoing digital transformation mean asset management has been in a period of great change. The FCA called its flagship piece of regulation, effective since 31st July 2023, a ‘paradigm shift’ in its expectations of firms, putting good outcomes for consumers at the heart of FS providers’ businesses.

Wealth managers are having to move fast to stay relevant. A 2023 report by Broadridge found that digital transformation is the top priority for many, and they are investing in it to stay competitive: 55% of wealth managers and digital brokers interviewed for the report said digital transformation is their most important strategic initiative. New client segments are demanding a personalised, digital Customer Experience (CX) and access to expanding asset classes. Firms need to provide advisers with cutting-edge technology to service emerging client needs and expectations.

In terms of Consumer Duty, many firms are having to change, even reinvent, to build a better CX around these four outcomes:

• Products and services: these have to meet the needs, characteristics and objectives of their specified target market.

• Fair value: a reasonable relationship between the price paid and the overall benefit the consumer receives.
• Consumer understanding: help consumers make properly informed decisions, with timely and understandable information.
• Consumer support: helpful and accessible support throughout the relationship, including mitigating risk of harm and meeting the needs of vulnerable customers.

Challenges and opportunities

The obligations to review product suites, communications and customer journeys are also opportunities to help fund brands and advisors be more client focused and put customer experience first. Broadridge’s research found that 78% of investors want companies to improve the customer experience – but the majority of firms are struggling to do so. Even among firms classed as leaders in digital transformation, only a quarter are at an advanced stage in creating the optimal digital experience across the customer journey.

A 2024 study by Broadridge’s Data Center of Excellence, looking at US investor observations, found that the democratisation of investing is one of the overarching asset management trends of the past decade, and more younger investors are entering the space. While older age groups retain the largest share of assets, there is a gradual shift. Millennials now represent 22% of US investors. These shifts are driving demand for change in customer experiences.

Where do we see the opportunities?

1. Providing advisors with new opportunities to reinforce their value and communicate directly with their clients, for example: Using technology to share timely and topical insights and resources. Providing detailed data analytics and insights, to reveal investor behaviour patterns, preferences, sentiment and risk profiles so that they can offer more personalised recommendations and strategies.
2. Tools and platforms that allow segmentation and personalisation, so advisers can segment their client base and tailor their services to meet a specified groups’ needs, characteristics and objectives more effectively.
3. Enabling better investor communications, through holistic digital experiences that make it easier for investors to understand their account details.

Digital tools can make clients happier, contribute to top-line growth, help retain advisors and make them more productive by helping them use their time more efficiently. They can identify prospect fit, level of interest and engagement, and automate sending the right content and comms to prospects at the right time.

Good design is central to doing all of these well. Good design can give you:

• Intuitive, easy-to-navigate user interfaces where advisers can quickly access and interpret complex data, get actionable insights and help customers make informed decisions.
• Data visualisation, presenting charts, graphs and dashboards in a visually appealing and understandable way, so that advisers can easily spot trends and patterns.
• Customisation features that let advisers tailor the data presentation to their needs and preferences, so they can focus on what’s most relevant.
• Interactive elements, such as filters and drill-down functions, where advisers can explore data in depth and understand the nuances of investor behaviour and preferences.
• Integrated tools and data sources for a frictionless user experience that simplifies their workflow and makes segmentation and personalisation simple.
• Responsive design that makes tools and platforms equally accessible across all devices, so that advisors can access data and insights anywhere and be more flexible and responsive to clients’ needs.

Design that elevates customer experience

A broader demographic of investors, such as the rise in self-directed investors, younger investors and investors with different educational backgrounds, makes it more important than ever to understand what they want. If someone is invested in three different asset classes, for example, do they want three sets of data and communications, which are perhaps being sent to them at different times?

Or do they want one communication and one personalised dashboard where everything is easy to see at a glance, and easy to drill down into if they want to understand more?

New or self-directed investors might want much simpler communications – or they might need education and explanation of investment performance, data and terminology. Should this be in every communication or should it be a link where they can easily find details and analysis, as well as browse information to improve their financial education?

Fund brands can also support advisers with hybrid tools and platforms that offer investors the right balance of digital versus human support. Options to switch to personal advice and interaction at certain points in the investment process could reduce risk for inexperienced or less knowledgeable investors. Solutions could be customised to groups or individuals e.g. more intervention for new investors and less for sophisticated investors.

When it comes to digital onboarding, leaving inexperienced and self-directed investors to a purely digital experience may fail to give them the highest standard of care. You don’t know their level of financial literacy, even if they are HNWIs. You only get one chance to onboard someone and make the right first impression for your brand.

Leaving self-directed investors to make investment choices without clearly and correctly signposting the opportunity for consultation could also mean lost revenue.

A hybrid digital/human interaction approach could be prototyped and tested at a small scale, to gauge outcomes. Human intervention could be triggered by certain behaviour during the user journey, for example, or by asking people to answer questions that show you their level of knowledge and understanding of risk.

On the other hand, the experience for a sophisticated investor, willing and able to take on significant investment risk, would be quite different. It might be fully digital, with fast connection to a consultant only if they want it. Opportunities for personalisation could include access to ad hoc support, detailed investment insights, exclusive products, a closed forum or live events.

Training and resources can boost advisers’ skills and knowledge so they can better advise customers (again potentially reducing investors’ risk and improving outcomes) e.g:

• Training: workshops and tutorials on using your digital products and services effectively, including balancing digital communication with human interaction, for improved client management and strong client relationships.
• Resources: regular, timely reports and webinars to keep advisers informed on market insights, analysis, trends and investment strategies.

Strategic design thinking

Strategic design thinking is central to two of the FCA’s required outcomes:

1: Products and services that meet the needs, characteristics and objectives of a specified target market

In our work in product, service and experience design, knowing who we’re designing for and testing our design choices at pivotal points are two of the most important foundations. Sometimes the company we’re working with has a clear idea of audience personas; sometimes through customer research and interviews we develop these. They may have a cohort of users who we test prototypes on, or we do external user testing with people fitting the audience profile. Our proven process includes a full report: a presentation of qual and quant findings, and our recommendations on how to proceed, usually prepared within 48 hours of the testing.

Studiomade example: user-centric pension product

We recently worked with a British multinational insurance, wealth and retirement business. The team knew that most people don’t understand what their pension is worth and wanted to transform the customer’s experience, so that they have clarity and can plan for the future. We designed a new and innovative product that decodes direct benefit pensions.

We iterated the user flow as we tested what users wanted to see, what was too much or too complicated, and the language that resonated with them. At each round, we presented full results and made recommendations and decisions on how to most easily present information. Alongside designing for the user, we considered the company’s back-end capabilities, requirements for additional content and the user journey within the wider ecosystem.

The result is a fully designed customer journey and prototype. The company’s development team is now building it for launch. The project was just eight weeks from start to finish, with intensive design sprints and agile working, and a major step towards bringing the brand’s vision to life.

2: Consumer understanding

Communications have to support consumer understanding and equip them to make effective, timely and properly informed decisions. Good design has the power to communicate effectively and with impact. This can be the way data is visualised or how design elements are used to house content or guide the user journey. It can also be through words, helping consumers understand essential information, with impactful headline information, digestible summaries and making complex details accessible.

The SEC regulations in the US for share reports, introduced in 2023, required firms to simplify investor comms. Shareholder reports were often more than 100 pages long and a retail investor who wanted to understand the performance, fees and other operations of their investments had to sift through this. The regulations now require fund companies to share a concise report that fits on two pages with a digital destination for the rest of the information.

Studiomade example: SEC-compliant shareholder reports

Broadridge, a global fintech leader driving business transformation, asked us to re-think its shareholder report approach to comply with the SEC’s regulations. We created a new, user-tested design system for a condensed report that contains all the legally required information plus a microsite to house reports for investors with multiple share classes. The result is a tailored report where investors can quickly find essential information, both top-line and deep dive, which gives them clarity and makes the report compliant.

Read this case study here.