Looking beyond the widgets
Russell Andrews, head of solutions & marketing UK, Europe & Asia, SEI’s asset management distribution division, writes that technology has become ubiquitous…
Technology is everywhere – in our personal lives and professional lives. But a technology’s true effectiveness will determine whether it stands the test of time. While many industries, such as aerospace, retail and communications, are well advanced in technology innovation, more recently, the wealth management industry has collectively started working with more urgency to enter the innovation race with ambitions of achieving similar success.
It is common for most, if not all, wealth management businesses to have a dedicated technology strategy – as well as a dedicated technology component of the proposition. In fact, many organisations are now employing specialist technology experts inside the business or collaborating with fintechs to import the necessary expertise to help define and execute the technology solution. The question that remains, however, is whether technology’s role is delivering what it should be or could be within wealth management.
For a long time, businesses across many sectors, including wealth management, have applied technology as more of a utility, with success metrics such as speed, efficiency, and cost of doing business. While these areas of incremental progression remain important when ensuring that technology is delivering what it should be, technology as a utility is not a game changer. What is potentially missing? A deeper thinking around what the technology could be delivering and crucially answering the all-important “why?”
In addition to its utilitarian properties, we also continue to see technology developments failing to address what really matters. Only too often we see focus, perhaps unintentionally, being placed on delivering “cool tech”.
Letting loose with a technology budget and empowering internal teams, who have spent years inherently looking inward at their products, risks developing what may be deemed to be exciting or innovative from within. (Cue pats on the back all round.) However, it may actually make little impact on solving client problems, maximising long–term opportunities or changing stakeholder behaviours—three areas that are major drivers of successful innovation.
Proactively and strategically thinking about technology, while focusing on stakeholders’ actual needs and essentially looking beyond the widgets, will help enable wealth management businesses to start to re-imagine some of the more impactful components of their proposition or even beyond the proposition itself. Enhancing client engagement, creating digital empathy and delivering hyper-personalisation are just a few examples of opportunity where the industry can influence how clients think about and interact with their wealth. This, in turn, will help to drive better behaviours and also help evolve the role of the wealth manager to one that combines advising, coaching and counselling, which encourages a more holistic client-advocacy-style role.
How do you establish the right strategy?
While the approach is not new or revolutionary, listening to clients and advisers alike to establish what is most important to them is still one of the most effective ways of answering “why?”. Rather than satisfying the technology team’s or marketing department’s ambitions, technology should be deployed to directly cater for the end-users’ demands. Knowing that your customers are not particularly interested in saving three clicks in a process but are interested in their family members being recognised in a wealth plan is a good example. When assessing the technology roadmap, every item should have a clear definition of “why”.
The known unknowns
While it’s critical to ask clients what is important, it will only get you so far. The need to think big, be ambitious and have a vision that goes beyond the internal consciousness of the business and your clients will likely make the seismic impact that will ultimately lead to positive transformation.
Henry Ford once said, “If I had asked people what they wanted, they would have said faster horses.” While it is disputed whether Ford ever did utter this famous saying when reflecting on the invention of the motor car, the message is one that should not be lost when constructing a technology strategy. Innovation icons like Steve Jobs have that ability to look through the status quo, push the envelope, envision a new set of standards and continue to answer “why” in a way never conceived. Apple, like others, did not simply focus on improving user standards as it relates to making phone calls or sending text messages. Instead, they re-imagined what a mobile device could be for the user: a camera to capture special moments, tools that can help measure activity and health and a single gateway for digitally keeping in touch with friends. These are not utilities. These are personal use cases that answer “why” and will enrich lives.
If we can develop a proposition that uses technology to make investing and managing wealth more relevant and engaging through hyper-personalisation, gamification, behavioural tools and expert use of big data, then the outcome will be a hugely positive one for clients, advisers, wealth management organisations and the industry as a whole. We just need to keep thinking big and asking “why?”