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INTELLIGENT ONBOARDING: A BRIDGE OVER THE DIGITAL GAP FOR WEALTH MANAGEMENT

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By Mark Shields, Director of Solution Marketing

 

Transformation is most certainly afoot in the wealth management and advisory sector, with the pandemic accelerating some trends over others and highlighting the need for operational efficiencies. For wealth management providers this typically means a greater focus on digitalisation but also on streamlining processes to achieve greater productivity.

Recent research by ESI ThoughtLab confirms that digital services are an absolute necessity for wealth management providers, with 40% of investors reporting digital access has become a greater priority, and 9 out of 10 declaring that mobile will be their preferred channel in the future[1]: older, higher value investors are in fact now demanding access to digital too[2]. The same report highlights that digital transformation can increase productivity by 13.8% and revenues by 7.7%, highlighting that the race to automation will remain key to staying competitive.

There are some caveats, however, as with any change. Businesses will not be looking to replace systems entirely, risking downtime and getting involved in huge up-front investment. Instead, to achieve rapid results and Return on Investment (ROI), they are opting for simple, composable services that are lean, flexible to integrate and tailored to their environment.

Recent research by Forrester shows that one of the key areas where tailored solutions are providing important results is digital onboarding[3]. Specifically, orchestrated onboarding can reduce Not In Good Order (NIGOs) – documentation submitted with errors or omissions by 80%[4]. When the package of forms to open a new client account is created and submitted, missing or incorrect information will trigger a NIGO task which requires the advisor or other staff to correct and amend the package for resubmission. This task often requires the advisor to go back to their new client for additional information and evidence. NIGOs are therefore at the root of a cascade of negative outcomes that range from bad customer experience to productivity loss.

On the other hand, research shows that after introducing digital tools, work previously carried out by 35-40 staff can be successfully completed by a mere 10[5]. With less time spent amending documents, clients are onboarded faster, and resources are freed up to focus on more constructive tasks such as building trusted client relationships and winning new business. The study also shows that typical customer onboarding times are reduced by over 75%, from two days to between two and four hours[6].

By significantly reducing NIGOs accounts can be opened and funded faster, improving cash flow and client satisfaction at the critical ‘first impressions’ stage. Onboarding is a key stage in investor relationships and should not become a time-consuming sticking point, rather than the seamless and streamlined experience customers have grown accustomed to with more digitalised industries such as ecommerce.

Digital onboarding solutions that provide guided data gathering, leveraging specific business rules associated with the type of accounts, contribute to error reduction. More importantly, when these solutions are tailored to respond to national regulatory and compliance requirements, such as those defined by IIROC in Canada or FINRA in the US, they avoid the need to manually type up and prepare paper-based documentation. This is an important efficiency driver for operational staff and a way of reducing carbon emissions to meet efficiency targets: over 29 tons of greenhouse gas emissions can be saved over a four year period thanks to paperless workflows[7]. Integrations with other systems, such as CRM, book of records, and digital signatures improve efficiency as well as trackability and transparency of processes.

Finally, training new staff, can consume significant time and resources. Reducing that training onus by 80% with digital tools is clearly an exciting prospect for high-growth businesses[8]  that can thus upskill their staff to more valuable activity.

It is high time that wealth businesses joined other services providers in offering customers highly streamlined customer experiences. As onboarding is the very first interaction with the company, this is the ideal place to start. Research has also shown that improvements span much further than customer satisfaction: advisors that are no longer bogged down by paperwork are far more productive, compliance is guaranteed, and employees are more engaged and efficient. As the wealth management sector works to rapidly bridge the digitalization gap with consumer industry businesses, digital onboarding, especially when integrated with country-specific regulatory elements can provide a host of business benefits.

[1]  ThoughtLab | Wealth and Asset Management 4.0: How digital, social, and regulatory shifts will transform the industry (appway.com)
[2]  ThoughtLab | Wealth and Asset Management 4.0: How digital, social, and regulatory shifts will transform the industry (appway.com)
[3] Forrester for Appway, The Total Economic Impact of Appway’s Client Onboarding for Financial Services: The Broker-Dealer Segment, The Total Economic Impact of Appway’s Client Onboarding for Financial Services: The Broker-Dealer Segment.
[4] Forrester for Appway, The Total Economic Impact of Appway’s Client Onboarding for Financial Services: The Broker-Dealer Segment, The Total Economic Impact of Appway’s Client Onboarding for Financial Services: The Broker-Dealer Segment.
[5] Forrester for Appway, The Total Economic Impact of Appway’s Client Onboarding for Financial Services: The Broker-Dealer Segment, The Total Economic Impact of Appway’s Client Onboarding for Financial Services: The Broker-Dealer Segment.
[6] Forrester for Appway, The Total Economic Impact of Appway’s Client Onboarding for Financial Services: The Broker-Dealer Segment, The Total Economic Impact of Appway’s Client Onboarding for Financial Services: The Broker-Dealer Segment.
[7] Forrester for Appway, The Total Economic Impact of Appway’s Client Onboarding for Financial Services: The Broker-Dealer Segment, The Total Economic Impact of Appway’s Client Onboarding for Financial Services: The Broker-Dealer Segment.
[8] Forrester for Appway, The Total Economic Impact of Appway’s Client Onboarding for Financial Services: The Broker-Dealer Segment, The Total Economic Impact of Appway’s Client Onboarding for Financial Services: The Broker-Dealer Segment.

Top 10

IF IT’S A LOSS, YOU’RE TOO LATE – WHY THE INSURANCE INDUSTRY NEEDS TO FOCUS ON FIRST NOTIFICATION OF RISK

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Simon Dicks, Insurance Channel Manager EMEA, Lytx

 

Insuring commercial fleets can be an expensive business. Average repair costs have increased by up to 40% in the past 8 years and disputes about who was responsible can drive up expenditure for both fleets and insurers.

Part of the problem is that the insurance industry hasn’t had the tools to forecast costs and premiums accurately enough in this sector. Underwriting decisions are still made in the same way they always have been, by looking back at historical data from previous years. This approach simply isn’t giving insurance companies an accurate indication of potential risk – or a proper indication of the impact of driver behaviour.

Technology is helping insurers to an extent by providing information about First Notification of Loss (FNOL) – automatically sending notifications when unusual G-force readings are captured within a black box tracking device as a result of sudden braking or impact. This is good, but far better is the ability to use proactive technology to detect when an incident is at risk of occurring and when a driver is distracted.

The only way to address this is to put a highly accurate level of camera technology both inside and outside cabs, supported by sophisticated technologies such as Machine Vision (ML) and Artificial Intelligence (AI). This way, we can see not just that an incident has happened, but why it happened. What’s more, we can assess risk before an accident happens at all and prevent it happening in the first place. We call this First Notification of Risk (FNOR) – and it’s a whole step up from FNOL.

Machine Vision scans the internal and external environment of the vehicle to identify distracted driving behaviours such as mobile phone use, eating, drinking, smoking, inattentive behaviour or failure to wear a seatbelt. AI, comparing the behaviour against a vast bank of accumulated data, is then able to determine the riskiness of that situation and whether it needs to be flagged to the fleet manager, driver, or insurer via a short video clip. The big difference in this approach is that it’s proactive, not reactive. For the first time, fleets and insurers can identify adverse driving and distracted driving in real-time for the first time.

This includes the ability to alert drivers of any momentary slip-ups or distracted behaviours. Using the same technology, drivers will receive an audio or visual alert to help keep them on track and to lessen the likelihood of a moment’s distraction becoming anything more.

When insurers have access to these insights, they can also start to see patterns from the data over time. For example, a fleet manager might start to see that there’s a peak in risky driving behaviours on a Friday afternoon when lots of drivers are rushing to finish for the weekend. As a result, they may decide to spread the shifts differently so as to avoid that pattern of behaviour.

When insurers are only looking at FNOL, it’s already too late. A driver could be unthinkingly driving whilst smoking, on their phone, and nobody would never know. Whereas with FNOR, both managers and insurers are provided with insights that remove the guesswork, and underwriters have the information they need to assess risk with far greater precision.

There’s still a long way to go in making the move towards FNOR. With so many different companies selling cameras and telematics systems and producing information in hundreds of different formats, claims data will have to be standardised before the sector can really transform. However, by starting to embrace ideas like FNOR, the industry can move towards a solution that saves them time, money and lives.

To find out more, visit  www.lytx.com/FNOR

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THE DIGITAL WEALTH, ASSET MANAGER AND FINANCIAL BROKER OF THE FUTURE: TRANSFORMING CLIENT COMMUNICATIONS

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By Christina Di Nolfo, Head of Solutions at Delta Capita

 

More than in any other profession in financial services, wealth managers and financial brokers are heavily dependent on personal interaction with their clients. While digital transformation has been on the agenda of many individual advisors for years, the pandemic revealed the painful inefficiencies of legacy communication models.

Studies from YChart mirrored the communication gap just a year prior to the lockdown. 75% of clients want proactive communication from their wealth manager or advisor. But nearly half of clients with over $500,000 or more in AUM said they received infrequent communications, with those with less than $500,000 invested, receiving even less of their advisor’s time.

Consequently, finance professionals have been quick to try out any communication software from Zoom to Slack to WhatsApp. However, these programs were not made for financial advisors, making adhering to compliance standards more complicated than ever and raising security concerns.

Christina Di Nolfo

Let’s take Zoom as a quick example. Whilst Zoom is a great communication tool and one which many of us are all too familiar with, it is only meant for video calls and is not a comprehensive communication platform. The Federal Trade Commission discovered that Zoom’s end-to-end encrypted (E2EE) wasn’t what it appeared to be. Instead of calls being E2EE between participants, the data was only encrypted between each meeting participant and Zoom’s servers – meaning it was not truly end-to-end encrypted.

But it’s not just Zoom. Any application not built with compliance in mind is a risk for your business and your customer.

A customisable, compliant, and fully interactive client portal for the digital wealth advisor or financial broker is essential to streamline communications and maintain compliance. But what does that look like?

 

The Wealth Manager of the Future

Customer experience is everything, and the wealth manager of the future can already benefit from an end to end digital customer journey platform. Imagine if you could:

  1. Onboard new clients in minutes
  2. Push secure content to your client on their chosen device
  3. Record every minute of your meeting, even as you switch between video, chat, screen shares, and more
  4. Collect signatures and obtain consent instantaneously
  5. Accept PCI compliant payments directly from your portal
  6. Provide disclosures and other vital documentation for clients
  7. Collect customer documentation in real time such as ID and proof of address

All of this is possible through Klarion, our end-to-end engagement portal. Completely customisable, Klarion offers an entirely digital process designed for the optimal user experience. Clients are not required to download complex software. Instead, they only need to click on a secure link that you send to them via email or SMS.

Klarion enables you to verify identities in real-time, manage essential sensitive data, accept payments, engage in a video call and more. And you don’t need to worry about compliance. Not only does our solution log every interaction and timestamp it within an end-to-end encrypted environment, but you can also benefit from PCI-DSS Level 1 and KYC/AML compliance features.

You no longer need to go back and forth with your clients over email or other communication channels, as you attempt to resolve issues or complete tasks. And you also do not need to invest time and resources in tracking down every slip of paper. Instead, you can focus on what matters: Keeping your client informed about their assets and providing value.

Financial managers using Klarion have shifted their self-service offering from 13% to 30%, and reduced call volumes by 2.2x without sacrificing customer experience or compliance regulations.

 

The Future Won’t Wait

Through the proliferation of technology, more and more customers will demand a comprehensive and cohesive user experience. To create a sustainable, client-focused financial management practice today, integrating technology with human sensibilities is critical.

But waiting to reinvent your customer interaction process means that instead of focusing on growth, you may well end up running after the competition.

Klarion makes it easy to get up and running. There is no need to worry about costly, complicated, or time-consuming system consolidations, as Klarion integrates seamlessly with current infrastructure as a white label front-end solution, while ensuring your brand is front and centre. Klarion sends information directly to your CRM (or other systems), saving you from data entry duplication and is customisable to whatever workflow is required.

 

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