Using technology to turn obstacles into opportunities

Efficient use of data, improvement of the client experience and effective marketing of wealth management services were among the key topics of discussion in a video interview with Jennifer Miller, global head of business development and operations at US tech provider Vuture, broadcast live to a PWM audience at the end of May.

Ms Miller’s approach centred on turning obstacles, created by data collection and analysis, into opportunities for closer relationships with clients and building more responsive business models for private banks, both during the coronavirus crisis and in the post-Covid-19 world.

During the first two weeks of lockdown, due to volatile stockmarkets, Vuture witnessed four times the usual number of emails sent out by wealth managers to clients. These offered new tools and technology, plus thought leadership content and updates on regulatory changes.

“As a by-product of this trend, we saw those banks that did not have good technology expressing the need to react quickly,” said Ms Miller. “So we had an influx of people calling us, saying they didn’t have the right tech to execute the fast communications that clients need.”

So far, clients have been patient with providers. “People right now are still a bit fearful,” said Ms Miller. “But over time there will be shifts and new alliances.” These will result in clients seeking new technology and wealth firms looking to prove they can support clients remotely with new tools.

Private banks must quickly address technological deficiencies, she believes. “When you go into a private bank or wealth management firm, people greet you at the door and walk you in, you sit down and you have an exceptional experience. But you go to most wealth management websites to look at their tools, and they are fragmented, broken, they’re not pretty and I think that is becoming more apparent right now where you’re not getting the in-person, you are only getting the digital.”

Vital glue

Feeding data into this experience is crucial to its enhancement. Replying to questions from Vineet Vohra, partner with the Cognasia Talent consultancy in Singapore and Malik Sarwar of the K2 Leadership consultancy in New York, Ms Miller stressed that data is a vital glue between communication and artificial intelligence (AI), when building the customer experience. She predicted a bifurcation of wealth managers using data differently.

“You will have on one side companies willing to partner and open up, to react and use data very quickly,” said Ms Miller.  “On the other will be banks locked into legacy tech, with very old procedures, which provide people with safety and security. But when you think of the generational gaps in terms of their client base, that will evolve and change very quickly.”

A new standard of service will be set by digital banks such as Germany’s Raisin and the UK’s Revolut, using data and partnerships to service clients much faster and at scale. “This will make it harder for the traditional banks, that have more at stake, to keep up with that,” said Ms Miller.

The “foundational thinking” banks must embark on to kick-start their transformation, involves meaningful conversations, understanding trends and using collection of compliance-led data to improve client engagement. From “onboarding” onwards, it is vital to obtain trust by asking clients’ permission to track and collect their data on a website. “This provides transparency and integrity from the start of that relationship if you approach it in that way,” said Ms Miller. “Instead of trying to force things onto people, you’re enabling them to work with you and the psychology of that exchange is a lot healthier.”

Despite her background in tech-led behavioural analytics, Ms Miller warns private banks not to get too carried away with the latest digital tools, which can offer limited returns in engagement terms. “Email technology is not as exciting as other channels but offers the highest return, around four times that of other technologies,” she said. However Ms Miller does recommend using a variety of communication channels, including print, plus deploying some data analytics to determine how clients interact with web content.

“You can start making inferences about the intent of people from the behaviour you see with the mouse and engagement with content and you can start segmenting people by that information,” she said. “It is super interesting data, but also provides a very high return.”

Private banks and wealth managers still lag other industries in segmentation, many using “one size fits all” approaches, or offering only basic newsletters or event invitations online. This can be easily remedied with the right technology, with small investments providing meaningful returns. “You don’t have to do everything, just pick one thing you want to implement in data, see the gaps and work out how to get those filled in,” said Ms Miller. Through such a “foundational approach”, private banks can begin a more extensive, longer-term digital transformation.

This prediction of what clients will need is key to this new approach. “Everyone talks about the customer journey and digital experience, but most of the time they don’t actually execute that,” added Ms Miller. The biggest return on marketing investments, she said, comes from thinking ahead for clients, using predictive data to advise them about the next thing to do.

“You must always remember you are speaking to individuals, who are nuanced beasts,” said Ms Miller, in her answer to Markus Nöth, a Behavioural Science lecturer at Hamburg University, who asked if we first need to better understand human behaviours, in order to use data more effectively. “The better we get at understanding the individual, the better we get at using the data and fulfilling our business goals.”

Cultural clashes

Many of Vuture’s projects are currently about bringing together not just technologies, but also different, often culturally clashing, teams within wealth management groups. “I was on a call recently with a bank’s marketing officer who told me just how broken their technology is, when it comes to connecting together client data and also connecting together their teams,” related Ms Miller. “Because everything has been siloed, decision making on key decisions was coming from one department. But how to make it connect together has not been thought through.” 

The shift she expects to see in response will be new business thinking, with banks moving to single technologies rather than best of breed combinations. “So instead of buying six different technologies to accomplish a goal, they will find a vendor who can do 70 to 80 per cent of that,” said Ms Miller. “So it’s better from a risk and compliance perspective than and that is a shift we have definitely been seeing, even before Covid-19.”

The most effective solutions come from a partnership between marketing and technology teams, united by a CEO who can play a critical role as “a figure of peace” in decision making. The teams are more likely to listen to the firm’s leader if the CEO can prove technology investments lead to significant returns. “Data is a good way to strip out bias and personal opinions, and we can use that to make decisions that are really foundational to a client,” said Ms Miller. “But you have to have cohesion amongst the teams to make sure their activities are aligned to the objectives of the broader business.”