Both luxury and consumer retail outlets offer valuable lessons for wealth managers, with data-driven insights key to taking engagement to the next level.
Rapid digitalisation of the global economy has forced industries to meet shifting consumer behaviour. Retail is a key example. This sector had to innovate customer engagement during the rise of online shopping in the early 2000s, developing ‘omnichannel’ retail. This seamless, on-brand experience can be delivered to customers online and off.
Embracing innovation has allowed retailers to leverage technology and track customer interactions across each touchpoint, enabling personalised marketing, efficient customer service and a cohesive shopping experience.
Private banks and wealth management firms can learn from this and implement their own advanced analytics and AI-driven technologies to gain deeper understanding of consumers' behaviours and preferences. Embracing new technologies and business models will also help them stay ahead of their competition, particularly in digital hospitality and community building.
Customer experience
Data-driven insights used by the retail sector can form a template for wealth management firms and private banks to add more value to customers as well as blend online and offline interactions.
Innovative retailers, such as electrical outlet AO, have transformed delivery services by going beyond a literal product drop-off and offer a more personalised experience. While enriching in-person interactions with online insights and data on customer preferences, delivery personnel can now offer tailored recommendations or special touches that elevate the overall brand experience. QR codes in physical locations have successfully led to immersive online content helping to simulate in-person interactions, and apps provide a bridge between the digital and physical realms. Where the line between online and offline are increasingly blurred, today’s wealth management firms can leverage similar technologies to create a unified and interconnected journey for their clients.
Innovative retailers, such as electrical outlet AO, have transformed delivery services by going beyond a literal product drop-off and offer a more personalised experience
Wealth management firms have already deployed some AI tools in the form of automated chatbots to service clients and speed up the process of reviewing documentation for underwiring purposes. For example, Barclays launched its robo-advisory service in 2020, offering active and passive funds through a managed portfolio and personalised investment plan.
However, wealth management firms and private banks are still relatively slow in adopting AI and data-driven insights. In fact, relationship managers in wealth management spend 60 to 70 per cent of time on non-advisory activities, according to McKinsey. Investing in technology which automates these tasks will allow them to focus on boosting revenue and developing deeper relationships with clients.
Leveraging data
Wealth management firms can take customer engagement to a new level by leveraging data analytics and AI technologies. Having an abundance of data at their disposal will allow them to provide more personalised services, anticipate client needs, and deliver targeted recommendations. However, like the mix of offline and online experiences deployed by retail, wealth management firms can use a similar mix of services to make them more authentic.
AI will help advisers automatically track client info, monitor client accounts for activity, and even run quantitative analysis on a client’s wider financial portfolio. Scaling these efforts will allow advisers to focus on building personal relationships in a cost-effective and time-efficient manner.
AI will help advisers automatically track client info, monitor client accounts for activity, and even run quantitative analysis on a client’s wider financial portfolio
Sharing and storing valuable information during client meetings may also have complications if the information is forgotten or not well organised. AI can help by allowing advisers to automate the process of retaining and storing information. Moreover, automating laborious back-office processes with the use of AI will help advisers monitor and manage risk, while looking for areas of improvement. Supervisory reviews of correspondence, for example, can be undertaken more efficiently. Without having to worry about minor tasks, advisers can focus more on overall financial strategy and build successful relationships with clients.
Wealth management firms can also use data for curating online environments, creating a sense of community and belonging among their clients. This involves delivering information and insights specific to their needs, including educational events, webinars, podcasts or videos. In this way, companies can facilitate more meaningful connections and cultivate a loyal network of investors.
Hypothetically, everything done digitally should be just as good as meetings in person. Webinars with industry experts can create white-glove experiences online, allowing wealth managers to keep clients and potential clients engaged and interacting with content. With the use of data and AI, private banks and wealth management firms can adapt to a rapidly changing environment and also strive for innovation in an era of uncertainty.
Matt Ryan is chief transformation officer at Reef, powered by Totem
