The use of digital tools is becoming widespread in all business sectors, especially in finance. In an industry where regulatory limitations are increasing and customer knowledge is required to offer vehicles that adapt to risk profile and expectations, digital tools have become essential.
The trend has intensified in recent months following the health crisis. Lockdowns have forced portfolio management firms to review their customer approaches to accelerate their digital transformation. At the same time, the emergence of investment platforms in alternative assets such as cryptocurrencies provides ease and simplicity in the subscription process, which is attracting more and more young investors. Faced with the new Fintech player, portfolio management companies need to adapt.
New perspectives for management companies
Digital technology tools such as big data, matching learning, robot advisors or blockchain are all new opportunities. Their use fits perfectly with the knowledge, collection and analysis of customer data and the need for security of these data and transactions.
It is a necessity for savers to master and understand the expectations of their investment preferences, where products of an ESG (environmental, social and good governance) character are becoming increasingly important. The contribution of big data analytics capabilities to artificial intelligence leads savers to invest in vehicles that meet their needs by paying for their investments.
In the wake of inflation and financial market fever, savers are looking for high-performance products that are resistant to market volatility and impact. Thus, more and more of them are leaning towards alternative financing, especially those not listed. Real estate on the one hand, but private equity funds are also popular with these connected clients.
An assignment of digitization tools in the making
Customer mobilization through digital channels is disrupting the traditional marketing channels of portfolio management companies. Although aware of the digital challenges, asset management professionals are still struggling to master these tools. According to AFG, only 12% to 33% of financiers use big data in their marketing process.
Change management is not immediate. This requires the consolidation of financial resources but also the employees of the management company. In digital projects, teams need long-term support and training in new tools Lack of employee time is often an obstacle to digital transformation.
But time is running out. From August 2 this year, financial advisors will have to consider the ESG preferences of clients in their investment choices so that they can be directed towards the right vehicle. In this, the use of robot-advisor can be very effective as an assistant in understanding the sensitivity of savers. Finally, automation of subscription processes, including dematerialization of documents, implementation of electronic signatures, liquidation of KYC management are all elements that improve customer experience while limiting administrative management during financial advisory. Thus, according to a McKinsey survey, digital tools generate 18% to 30% additional operating income thanks to better knowledge of customers and the offer of a tailor-made product.
Still, digital will not replace financial advisors. Physical relationships remain a determining element of trust between the counselor and his client. When it comes to finding answers to questions or planning the greatest moments in life, clients are more interested in maintaining a personalized and authentic interaction with the actual advisor.