JANUARY 15, 2021

How Smart Technology Turned the Covid-19 Crisis Into a Means for Digital Transformation

David Wilson

Senior Business Development Manager

Reading time: 2 min


There are a number of challenges in the wealth management business that have become somewhat more challenging with the Covid pandemic. It highlighted some industry wide issues that firms continuously struggled with, even though solutions to these issues have existed for years.

One major issue that my clients referred has been client reporting, which to this day is still largely paper based.
In these months, my wealth management customers got questioning:

  • How can my clients upload documents to me?
  • Can I send the valuation reports to their apps because we can’t send the paper ones?

I can cite another case, where a client struggled to get his clients to use the mobile app. Maybe about 10% were using it, but with Covid, investors were more than curious to know how their portfolio were performing. The firm was inundated with calls. Today the firm reckons they have 70% of their clients registered and 40-50% using the app frequently in the last 6 months. Imagine how that has reduced the ad hoc calls to advisors!

Having addressed technology in terms of acceleration due to Covid-19, there are now more pressing technology changes happening which rely on what we call enabling technologies.

Smart Use of Data and Digital Assistants

Imagine you are an adviser or Portfolio Manager. Your day begins by looking at your dashboard alerting you to the most critical and important aspects for the week ahead. The digital assistant has determined what your week looks like by checking a variety of sources.

You can see information is coming from diverse fronts and systems such as from the portfolio monitoring tool, showing what portfolios are out of line with whatever criteria you are measuring, asset allocation, mandates, model. There is information from the back office too, maybe corporate action elections you need to do, or client cash requests. Then you can see the status of how many clients are being onboarded and at what stage – maybe some require your attention.

At the same time, you can see appointments and tasks for the day coming from Outlook and urgent secure messages from clients. The digital assistant does intelligent analysis of data and prioritises your activities.

Intelligent Algorithms and Recommendation Engines

Think about understanding your customer better with data, capturing their behaviour in a systematic way, then combining it with superior knowledge of product and offerings that most suit him/her.

This is a way to serve more clients, empowering the advisors or Relationship Managers knowledge with optimal automated investment recommendations to increase the effectiveness of investment advice, at the same time reducing costs.

To support this value generation, you need an AI-driven Investment Recommendation Engine.

This engine must be able to receive as inputs the investments models, the strategies, the market views from the central Investment Governance Committee and support the Relationship Manager or Portfolio Manager in the process to provide optimised and suitable recommendations for clients and their portfolios, in combination with centrally designed approach and strategies.

At the same time, Compliance will input the Suitability Rules, the Investment Constraints, and the TCO Governance rules that will be applied by the AI-driven engine when rebalancing and optimising portfolios and continuously checking their suitability.

The model is also continuously learning by collecting feedback from PM’s and clients, incorporating these behavioral aspects to the investment decisions.

High Touch Tools for Customisation

The use of Digital Assistants and AI-driven Investment Recommendation Engines can then be incorporated into opti-channel collaboration tools between the advisor and client, so that they use the right medium of choice for the right activity. It should not matter what channel a client prefers to use and at what stage of a certain process or interaction with the firm. They should be able to switch seamlessly between the channels and pick up exactly where they left off the previous channel.

Results confirmed by studies

A recent study by Celent, a global industry leading market analyst, shows now accelerated IT investment in areas such as hybrid advice experiences, digital onboarding and digital signatures; in 2 years investment recommendation AI engines and Data Analytics will be firmly top on the investment list for wealth firms.

Smart technology can accelerate growth, as we have seen from studies such as by the Boston Consulting Group, underlining that there can be significant gains eg revenue up 15-30%, with new client engagement in the range of 10%-20%.

It’s quite surprising to see that all of this technology and capability existed before the Covid pandemic, but clients and indeed firms were reluctant to use it until needs must.

Don’t worry about using AI, algorithms and data to better serve your clients: smart technology will NOT replace your relationship and portfolio managers. They will rather upgrade your work.