A rich digital experience is more than a fancy front end; it’s about delivering confidence and efficiency in the long term, writes Shamus O’Donnell, CEO and Co-founder of Deep Pool Financial Solutions
Delivering the transparent, data-rich, collaborative digital experience the investment management community wants to see has proved a tough nut to crack. While digital portal solutions have become a central feature of today’s investment management value proposition, actual usage remains low. Often that is because firms’ digital offerings continue to come up short of expectations. A pretty front end that lacks the rich functionality different user groups want to see is no longer enough.
Users’ digital functionality demands
An attractive, intuitive, mobile-compatible portal is clearly important. What gives a digital offering real power though is the seamless, end-to-end data flows that underpin the front-end experience. This is where digitalisation in the investment management world tends to fall down.
The digital experience for investors centres on empowerment. They want easy-to-use technology that allows them to make decisions, interact with their investment manager, examine research and offer documents, and view real-time information. Self-servicing capabilities – from account opening to placing orders, reviewing contract notes and accessing user-defined reports – are increasingly important.
For investment managers, an integrated, digitalised environment offers unprecedented transparency and real-time insight into their marketing, fundraising and client service processes. They can see whether prospects have opened a subscription form if they’ve completed it, what Know Your Customer (KYC) documents have been submitted, who the ultimate beneficial owners are and how much money is being committed. By capturing and analysing data gleaned from the capital raising process and investors’ subsequent digital interactions, investment firms can also develop more accurate profiles of their investors and what they want.
Integrated end-to-end workflows that link the front-end portal to back-end administration systems are a big value-add for fund administrators too. Online workflows improve transparency and control. Any information self-servicing investors enter can be captured in a consistent, formal manner. Data and documents can be controlled and approved before being sent to the investment manager for subsequent release to investors. And easy tracking of all communications and amendments creates a transparent audit trail.
Three technology fundamentals
Getting that experience right for the different user groups demands three key technology components:
- Connected systems
As a central party to all participants and processes, fund administrators have a pivotal role in delivering quality digital experiences. The problem is many administrators use multiple systems that don’t talk to each other. Data becomes trapped in unwieldy silos, fostering data multiplication and version proliferation.
A multifaceted digital experience delivering real-time data across the investment management chain – from administrator to investment manager to investor and back again – demands tight integration between the front end and multiple downstream systems. For the portal to accept orders, it has to talk to the administrator’s transfer agency platform. It must be integrated with the portfolio accounting solution to present the NAV pack, and the reporting system to deliver reports. Workflow system connectivity is essential for fast, seamless activity processing.
- Data cleansing and normalisation
Ideally, all data would be correct at the source. That is rarely possible since different systems and data sources treat data in different ways and employ different formats.
Investors simply want to log in and see their portfolio details. But because they often participate in multiple funds administered by multiple platforms, the data must first be translated into a common format. Data cleansing is vital to identify and fix any corrupt, incomplete, inaccurate or duplicated elements in the datasets. The way the data is presented will then need to be normalised.
- Workflow management
Granular, rules-based workflows are integral to the smooth end-to-end, two-way flow of data. By triggering a series of automated steps for any kind of repeatable activity, workflows expedite the assignment and fulfilment of processing tasks, automate message and approval capture, and provide transparency and accountability for user actions. And where some form of manual intervention is required, automatically routing tasks to an appropriate team for completion will speed up processes and foster higher-quality outcomes.
Platform for growth
With users’ digital experiences becoming an ever-more important part of the servicing mix, getting the technology underpinnings right is essential. System integration, best-in-class functionality and end-to-end process automation are all vital. But by themselves, they will not be sufficient.
Scalability and reliability are crucial. A digital offering may look great, but can it perform 24/7 at the same high level once increasing volumes flow through the infrastructure?
Security is another prime consideration. Cybersecurity breaches are a growing problem for the industry, bringing huge financial and reputational risks with long-term consequences. Best practice security capabilities that give all stakeholders the peace of mind they expect are non-negotiable.
Digitalisation, done well, can be a major boon to client relationships and internal efficiencies. Done badly it can have the opposite effect. So it pays to get it right.
