As retail banks across Europe look to assess the positive impact of rising interest rates on their balance sheet Wealth Managers continue to enjoy healthy market growth and the ability to use technology to innovate, and not just to reduce operating costs. However, we are seeing a growing trend of innovation that runs counter to the fundamental customer experience that differentiate the world's leading firms.
The Metaverse is becoming a prime example of an industry investing in its own disruption. While still in an immature phase there are high hopes that once the motion sickness problems are solved, the graphics updated for this decade and the interminable software issues settled it could hope to replace many instances of in person human interaction. Until the technology is mature this sets a dangerous precedent as it erodes one of the key differentiators for the industry – your people and the personal relationships they build.
‘82% of High-Net-Worth Clients believe Human interaction is very important in their relationship with their provider'
Why does this matter?
The main risk is in opening the door to digital-native Wealth Managers to disrupt providers with more advanced customer platforms, mixed reality client interactions and delivered at a substantially lower cost base. In the short term this may not seem like a risk, customers are typically sticky, and many firms are careful to cultivate generational portfolio management. This approach will not help attract new clients or provide a magnet when events such as the recent Credit Suisse restructure saw a number of clients look to move in short space of time.
‘The market is yet to see the successful meeting of AI based Self Service platforms of Nutmeg, Wealthsimple or WE.UBS with the white glove touch of the likes of Pictet or Julius Bär'
Ultimately this is about what the future of Wealth Management looks like and with 54% of clients under 30 preferring self service platforms and human interactions the Metaverse looks conspicuously out of place. As such our advice is simple, be clear in your strategy what differentiates you with your customer base rather than experimenting to disrupt their experience.
What to prioritise now
If client advice in mixed reality is to be a distraction what then should be the priority today? We recommend a threefold approach:
- AI is for your people not just portfolios: We have seen extensive use of AI in portfolio planning and distribution but only limited use for talent attraction and retention and the role of AI in CRM is low. Using Natural Language Processing to combine CRM activity with Marketing insights can make portfolio managers more event and value driven over the usual milk round approach.
- Simplify to streamline operations: Already we are seeing the shift from clients having issues with legacy modernisation to the issues of a proliferating SaaS estate. With solutions easy to deploy, but not always to integrate, there is a great opportunity to consolidate and align around more efficient application estates. The most common example is found by looking at your notification bar to see if you have Teams, Slack, Symphony to name but a few.
- Revisit your organisation's delivery efficiency: Whilst industry has Industry 4.0 in Finance, Kainos are looking at the importance of Agile 3.0. Following industry attempts to reduce cost through reaching a consistent level of maturity across global teams, we are revisiting team performance and driving 30-75% improvement by combining our proprietary methodology and targeted metric tracking.
While these areas do not have the same visibility as mixed reality and quantum compute, the best return on tech investment today is achieved in operational change that is simple to execute.
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