Investment managers cite CX as key digital opportunity

Alex Sword


The Financial Services Forum

Improving customer experience is the biggest short-term digital win for investment managers, although insufficient support from middle management is hampering progress, according to a new report.

Titled ‘The world’s gone digital; why haven’t you?’, the report sponsored by DCX and written by London Research was based on in-depth interviews with senior stakeholders in asset and wealth management, primarily in marketing. Companies included JP Morgan Asset Management, Schroders Wealth Management and Vanguard.


The “sticky middle”

Respondents agreed that the C-suite understood the importance of digitisation, and had put strategies in place. However, middle management were considered less digitally savvy and highly risk-averse.

The pressures came at a time where Covid had accelerated digital adoption, but with challenging economic conditions forcing all businesses to rethink marketing budgets.

The IT department is particularly stretched, with one respondent saying: “They’re getting calls from the entire business – product, compliance, regulation, etc. – not just us. The difference is what they want are requirements; ours are nice-to-haves.”


From digitisation to digital transformation

Most respondents were in the early stages of their digital journey. The report drew a distinction between digitisation (doing existing processes better) and digital transformation (a fundamental company change to enable new opportunities and business models).

For now, the main opportunities of digital transformation were considered to be improving customer experience and data.

Improving customer experience would increase the prospects of achieving the crucial face-to-face meeting, with higher satisfaction boosting retention. Respondents were looking to the B2C sector for inspiration on how this could be done, with luxury brands a particular exemplar.

While apps were being used more, there was the potential to use customer portals more to allow customers better insight. Some respondents were interested in offering such portals to intermediaries.

Data also offered a short-term opportunity, allowing better customer insight and measurement of marketing efforts.

Longer-term, an opportunity promised by digital transformation to marketers could be using AI for prescriptive marketing, which would automatically suggest the next communication most likely to lead to a conversion.


The challenges ahead

Respondents also addressed some key challenges that would prevent progress. These included the high cost of marketing technology, and the fact that while senior managers agreed in principle with digital they didn’t necessarily assign sufficient budgets for it.

Data was a perennial challenge, with a failure to collect it and join it up. With extensive business done through third parties, respondents also raised questions over ownership of the customer experience, with intermediaries potentially functioning as a third-party ecommerce site.

In addition, the spectre of regulation made innovation harder. For example, compliance impacts both the form and content of communications, with the necessity to include regulatory necessary detail. This meant channels such as social media could be hard to approach due to being global platforms.

The need for compliance also led to a say-no culture around new martech solutions.

Read the full report here.

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