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Wealth Management

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.

Wealth Management

Keeping Cyber Insurance Premiums Down with Deep Observability

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By Mark Coates, VP EMEA, Gigamon

There is no doubt that the cyber insurance industry has experienced something of an evolution in the last five years. As the threat landscape has changed beyond recognition, so have the risk management strategies aimed at staying ahead of cybercriminals. The result is an exponential rise in premiums: 85% of cybersecurity business decision makers saw an increase in their cyber insurance premiums over the past 12 months, and 82% of insurers are expecting these rises to continue. Given that cyber insurance makes up a key component of many cybersecurity and business continuity plans, what can organisations do to keep premiums down while maximising coverage?

The key is to improve proactive protection and to embrace deep observability – employing real-time, network-level intelligence to track activity across a network. Deep observability provides IT and security teams with the ability to amplify the power of their current log and trace-based monitoring tools, rapidly detect suspicious activity and act accordingly. Achieving this ‘single source of truth’ also helps to reduce complexity and cost – a crucial benefit as premiums continue to rise and we enter a tougher economic climate.

Where it began

Against the backdrop of increasing cybercrime, the ‘NotPetya’ attack was a landmark cyber-threat for various reason. Perhaps most significantly it signalled the beginning of cyber insurance premium rises. Launched in 2017, NotPetya was a malware launched as part of a Russian state-sponsored cyberattack campaign targeting Ukrainian IT infrastructure. Beyond financial setbacks for global organisations, NotPetya’s proliferation caused the drastic rise of premiums and lowering of coverage limits, as insurers adjusted their policies to reflect the changing cyberthreat landscape.

Since then, a global pandemic and the subsequent shift to home or hybrid working created a perfect storm for the rise of ransomware. This form of cybercrime can cause such large-scale and financially destructive consequences that insurers have had no option other than hike up prices for more vulnerable businesses in order to stay profitable.

Zero Trust is an essential

With challenges comes opportunity. This upending of the cyberthreat landscape serves as a potential catalyst for organisations across verticals to optimise their cybersecurity.

According to the recent Gigamon State of Ransomware report, phishing and malware were the top routes for ransomware attacks in 2022. Cloud applications were also cited as a common ransomware attack vector, particularly by those in the UK. Protecting against a misconfigured cloud or human error isn’t the job of cyber insurance – this should be reserved to cushion the financial blowback in the event of a breach. Instead, enterprises must proactively take steps to bolster their security posture.

This includes ensuring all access across digital infrastructure is authenticated. Trust is earned, not freely given in this threat landscape. A Zero Trust architecture – which requires authentication of all users regardless of their position in an organisation – helps prevent unauthorised access and works to restrict suspicious lateral movement across a network. Fortunately, it’s now a topic regularly discussed in Boardrooms. Across EMEA in particular there is growing confidence that organisations will be able to implement this architecture in the next few years (51% agreed in 2020, compared to 83% in 2022). To get there, however, deep observability is a critical foundation; you simply cannot manage and grant access to what you cannot see.

A single source of truth

Threat actors can bypass SIEMs and endpoint detection and response tools, yet they will always leave a metadata trail. This is why deep observability is so crucial to cybersecurity. It grants security operations (SecOps) teams the ability to analyse this metadata, spot suspicious behaviour and take the appropriate steps to mitigate an intrusion before it escalates. Such enhanced visibility and control are crucial for maximising the efficacy of Zero Trust architecture and fostering a security-first approach within an enterprise.

With premiums so high, organisations also undoubtedly want to turn to solutions that provide ROI as well as better security. As more tools come into play, cost and complexity rises. Many enterprises will not have the budget to keep adding more solutions to their technology stack in hope they will improve their cybersecurity and reduce their insurance prices. Instead, they need a single source of truth and a complete view across the entire IT infrastructure – cloud included. From here, teams can identify network bottlenecks and eliminate irrelevant, duplicate or low risk traffic. Deep observability is therefore not only a must for security, but also for making budgets go further.

Organisations need to brace themselves for a challenging economic down-turn and continued rises in cyber insurance premiums by implementing a strategy based on Zero Trust, deep observability and network-to-cloud visibility. In turn, security teams can be far more confident in their security posture, business leaders are satisfied by a lower spend and insurers become more confident when taking on their customer’s risk.

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Banking

How banks can increase customer acquisition and user engagement with sustainability

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By Karolina Szweda, Head of Growth Marketing at Connect Earth

Young people are demanding more innovation from traditional financial institutions, and are primarily in favour of lower costs and more flexible digital customer experience promised by challenger banks and other FinTech providers. The future of banking is digital, and traditional financial institutions are well aware that they need to embrace innovation to remain competitive in the digitalised market.

In order to win over the younger generations, especially Millennials and Gen Z, banks need to invest in their digital transformation and deliver more customer-centric solutions. One of the affordable low-hanging fruits is sustainability.

As the public’s attention to the climate crisis grows, consumers and businesses are increasingly interested in reducing their negative impact on the planet. BCG reports that as much as 73% of consumers are altering spending habits because of climate change, and, according to PwC, 88% of consumers want brands to help them live more sustainably. As far as businesses are concerned, they are increasingly aware of the mandatory disclosure regulations set to take effect within the next years in major economies, and the need for carbon emissions reporting.

The problem is that the vast majority of consumers and businesses do not have access to actionable data on their carbon emissions. We believe that this is where banks can step in.

Increasing customer acquisition and retention

According to Deloitte, 71% of customers are more likely to choose a bank with a positive environmental impact. In addition, Global Risk Regulator reports that 93% of people expect sustainable financial services to become the norm, and according to Tink, 62% of consumers want their bank to show them an overview of their carbon footprint.

Banks are in a unique position to respond to this increasing demand by embedding climate data in their financial services offerings, which can help attract new customers and improve brand loyalty on a large scale.

With a carbon tracking API solution integrated into a digital banking app, financial institutions can be a catalyst for change and enable their customers to understand how they can reduce their emissions. By providing carbon emissions data for each financial transaction, banks can support and encourage their retail banking clients, corporate clients and/or retail investors to act more sustainably, while also increasing customer acquisition and digital engagement.

Most importantly, banks can also measure how their customers’ spending behaviours are changing as a result of being exposed to climate-related information, which they can use to segment and understand their customers better.

Increasing digital engagement

According to EY, 61% of consumers want to access more information that can help them make better sustainable choices. Banks are in a position to empower customers to do exactly that, whilst increasing user engagement with their digital banking apps.

Educating consumers on how to make more sustainable choices can be achieved through gamification, personalised recommendations and rewards to encourage behavioural change. The analysis of spending data along with tailored educational content can enable consumers to analyse, learn and improve their consumption habits and empower them to act on this knowledge.

Before accessing their carbon emissions insights, users can enter their custom information about their lifestyle habits, such as diet (meat-based vs. plant-based), daily means of transportation (car vs. bus) and more. Machine learning models improve as users input data over time, making carbon emissions estimates more granular. The model is trained to support thousands of different user types based on their profile and enables the bank to customise the experience and gamify the emissions reduction process for users.

How banks’ customers can benefit from accessing carbon emissions data

As far as climate action is concerned, having a real-life overview of one’s carbon footprint can be a true game changer for millions of consumers worldwide. Access to carbon data increases climate change awareness and empowers people to make a real difference.

Earlier this year, our team at Connect Earth confirmed the partnership with KBC Bank in Bulgaria to help them drive customer engagement and provide their retail banking clients with climate insights into their spending. We aimed to bolster KBC Bank’s corporate sustainability strategy, whilst meeting increasing demand from climate-conscious clients.

The financial sector has historically lacked the infrastructure to support sustainable finance in a tangible way. We are happy to report that the green transition has begun.

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