Asset Management: 12 steps to digital transformation

OPINION / 6th November 2018

Amazon, Apple, and Netflix have revolutionised the customer experience, and investors now expect to replicate the same seamless interactions they have in retail with their asset managers too.

This means asset management firms need to reframe their customer interactions for a digital-first world; providing investors with 24/7 digital access to funds across multiple channels.

Within five years investors will want to predominantly engage with asset management firms on digital channels and will rely on the internet and social media for information on investments.

This is not to say that offline communication – like phone calls and face-to-face meetings – will not be important for investors, rather than demand for digital communication through smartphones, telepresence, webinars and online chats will rise dramatically.

We’ve partnered with several asset management companies including Artemis, Aviva Investors, Black Rock, Janus Henderson and M&G to define the role of their digital properties and help them to use digital to optimise their customer experience and improve their operational performance.

From our extensive experience we recommend the following approach to undergo a digital transformation:

Step 1

Don’t confuse digital with buying new technology. Digital transformation is first and foremost a culture change.

Step 2

Develop a digital vision and value proposition. Identify future areas of growth from digital innovation, then align technology with your business goals and growth plans.

Step 3 

Create a governance model. This should facilitate the decisions required to adjust and replace existing traditional organisational structures.

Step 4

Foster a culture of innovation. Encourage the cross-pollination of digital ideas and reward intrapreneurship (ideas from within) by setting the right incentives and rewards. Provide digital technology and business training to all levels.

Step 5

Identify a preferred method of transformation; build a new business or an adjacent business, create a digital hub within your business, or undergo an internal organisational transformation, where you rewire the business from within.

Step 6

Create a roadmap. Develop a properly staged roadmap. Work with external experts to develop digital capabilities and amend strategic planning processes to allow mid-course correction.

Step 7

Focus on the customer journey, not just the customer. Develop a view of your top customer journeys (based on rigorous journey analytics) and what these journeys should look like in a digital world. Align front, mid and back offices through technology to build a seamless, cross-channel customer experience.

Step 8

Migrate to cloud-based computing to enable agile product development. This will require you to embrace a “two-speed IT” system, which separates the systems of engagement from the systems of record, to speed product innovation and delivery of services.

Step 9

Adopt an agile way of working. Move beyond the waterfall approach and undertake sprints. Take a start-up mentality, where you’re constantly building, testing, and trying out new products that meet customer’s evolving digital needs.

Step 10

Continually use data. Treat it like a commodity and new source of value.

Step 11

Set KPIs and Metrics. Develop a single set of digital metrics to measure progress across the firm.

Step 12

Build a digital team to drive your transformation. Create a dedicated digital leader and team. Acquire, develop, and retain the right digital talent. The secret to successful digital transformation is having the right technical expertise across management levels and functions.

ORM’s view 

In our experience of working with asset managers, digital transformation is as much about aligning business stakeholders with changing customer needs as it is about technology. The legacy of a face-to-face selling culture is one of the greatest challenges for digital enablement, as often the perceived benefits of digital in acquiring and keeping clients are seen as tactical at best.

Ensuring the right people, processes and customer experience is in place to enable digital transactions and relationship management, is the precursor to any successful platform development or integration, as is the ability to measure success from meaningful KPIs and use data-driven insight to improve digital products and services.

Andy Farmer Andy Farmer Executive Director, Strategy Andy Farmer