How Asset Management firms can embrace digital: 9 tips from the experts
Lack of skills, a reluctance to embrace digital technology, limited buy-in from senior stakeholders and compliance issues are just some of the stumbling blocks to digital transformation in Asset Management, according to attendees of our event, Differentiating through Digital, which we hosted in Shoreditch, London last week. Experienced practitioners, Natalie Ceeney CBE and Chair of Innovate Finance, Stephen Gunkel Head of Communications at Pictet Asset Management, and Justin Hannemann Head of Customer & Innovation at Santander UK, spoke to senior marketing representatives from Asset Management firms, about the benefits of embracing digital and how they can incorporate new ways of working into their practice.
Here’s a highlight of what they said.
Natalie Ceeney CBE Chair of Innovate Finance:
Why now is the right time to digitise
1. Don’t ignore the digital tsunami heading your way. Financial Services is the next industry to be disrupted by digital due to a significant demand for services that don’t exist, and a fairly undifferentiated supply model. FS has highly bundled services that are ripe for disaggregation - many of which are based on a face to face, paper based service model. These are all the factors which have led to disruption in other industries.
2. Regulation is changing bringing new players into the market. The Regulatory Environment is changing. PSD2, coming into law in early 2018, will force incumbents in retail banking to share customer data with new players, who can operate without a banking license. The FCA and PRA are both openly championing Fintech for the benefits it could offer customers, and the Government, likewise, for its value to the economy. The FCA, through Project Innovate, is actively encouraging new approaches, establishing a ‘regulatory sandbox’ to allow start-ups and incumbents alike to experiment safely and with support – an approach which is now being copied around the world.
3. Own the data; own the customer. Many of the big Fintech players started in payments. PayPal, now valued at $58bn, is the best example. The Fintechs are providing domestic and cross-border payment services on significant scale through digital wallets - taking a slice of payment revenues and, in many cases, the totality of customer transaction data. This data has been undervalued and under-utilised by traditional financial services, but is being exploited by Fintech companies, which is disintermediating the incumbent banks.
Stephen Gunkel Head of Communications at Pictet Asset Management:
How you can use content to raise brand awareness and generate thought-leadership
4. Create a content hub. Create a central hub for unbranded content. The content you publish here should tell the stories behind your investment products, rather than be about the products themselves. This is based on the content marketing principle of using content to be informative, and educational, rather than salesy. Pictet Asset Management’s content hub, Mega, is used to tell stories behind their investment funds. They focus on creating content around the topics their funds are invested in, rather than talking about the products themselves. (This also helps them to get around compliance issues). The hub does have a ‘cat-flap’ to their branded site, i.e. at the end of an article it will have a ‘click here to find out more about the fund’ button.
5. Work with thought-leaders/experts in their field. Pictet Asset Management shifted its marketing budget from paid promotion and advertising in the likes of the FT, to promoting its own thought-leader content using social influencers and experts to spread their stories. They publish thought leader pieces, penned by industry experts and leading academics, which cover the issues related to its 14 Mega trends fund. They work with scientists, academics and thought-leaders to create authoritative, compelling and trustworthy content. So much so, it’s infographics have been reproduced in titles like the Economist and quotes from some articles have even been mentioned in debates in the European Parliament.
6. Be smart with your content efforts. Like for every marketing executive, Gunkel said he found securing a budget for content tough. So, with a team of just four writers, they have to be smart with their content. Every long-form piece of content that they create, is disseminated into quotes, infographics, and snippets which is then repurposed on social channels and is used in other marketing material.
Justin Hannemann Head of New Product & Service Design at Santander UK:
How to innovate in an incumbent business
7. Find innovators and learn from them. Often the biggest inspiration for change will come from outside your sector. Santander looks to the likes of George Hotz, the American hacker who unlocked the iPhone and who has created low-cost driverless cars, for inspiration for new ways of working and tapping into new trends. Hannemann is part of an innovation team, which has one foot inside the main business and one foot outside, tasked with finding new ways of growing new revenue streams for the business, in the way Google has done with its maps (it sells its map service to Uber). Rather than look to incumbent businesses, they prefer to learn from the start-ups and challengers like Tom Blomfield from Monzo who is differentiating his business with UX.
8. Continuously disrupt your business. Hanneman believes you need to disrupt your business continuously or else you find yourself going out of business. They work on a three-pronged premise of: ‘Think like a beginner’ – putting themselves in the shoes of their customers and working out how to solve their problems; ‘Collaborate with partners and external experts’ - believing if you want to go far, you have to go together; and finally, ‘Done is better than perfect’ – creating a test and learn culture, one that doesn’t fear failure.
9. Find a senior-level sponsor or change agent within your business. Hanneman admits a lot of his work is spent fishing for sponsorship – trying to find a senior level person, preferably on the board, that will back his team’s idea. He says, once you’ve identified a person who will give your idea profile you need to show them some evidence that what you’re proposing actually works. He says, the internal champion of your cause may not always be the most obvious person – think laterally and go for someone who is cross functional and is prepared to be part of a strategic alliance.