“Everyday you are not collecting data, your competition is learning while you are planning”
All wealth management firms want to make the most meaningful digital transformation in the shortest time possible. Out of the hundreds of firms that we’ve observed over the years, most make one of two mistakes in their digital transformation efforts. They either:
- Reduce the scope of their transformation to one use-case, failing to transform the whole experience of their target audience (Clients, Advisors, Back-office)
- They scope a massive BPM project that is over-engineered, takes years to get to market, and is outdated and inflexible when it goes live.
We explored the root of this dilemma and how real organizations are breaking through this paradigm today, in our latest webinar with CEB TowerGroup and Agreement Express CEO Mike Gardner.
Use-Case vs. Client-Centric Transformation
Operations and technology leaders recognize that it is near impossible to make meaningful digital change in traditional financial institutions. So they make a sensible decision to reduce the scope of their digital project in the name of getting something live within the year.
In the case of client onboarding projects, that reduced scope may look something like this:
The scope has been reduced to just New Account Opening, which is only a sliver of what your client onboarding process affects.
If Wealth Management firms were to change the whole experience, it would look like this:
The first option just isn’t acceptable to clients, advisors, or back-office staff. If an advisor is given new-found access to a digital forms solution that can collect client information digitally (only for certain types of forms), but must perform KYC updates on paper, or manually manage account transfers, it leads to a disjointed, confusing, frustrating experience for everyone involved. You simply haven’t made digital transformation, and there’s too much at stake to leave things where they’re at.
According to CEB, the most technologically savvy clients are also the least loyal, holding only 55% of their assets with their primary wealth management firm. If an advisor wants to increase wallet-share with their clients, they will need to offer a digital experience.
It’s a similar story for advisors. The advisors who consistently perform the highest use more technology overall (CEB, Advisor Competency Diagnostic, 2015).
The institutions that realize digital transformation is a non-negotiable often launch into 2-year BPM projects to make a real dent in the process. However, in a business climate where “software is eating the world” and fintech throws a new curveball every 6 months, 2-year implementation times are unacceptable.
The solution, according to Agreement Express CEO Mike Gardner on the CEB Webinar, is to adopt Agile Client Onboarding.
This is not a term to describe scrum-style development methods, but a philosophy of how financial institutions can make meaningful change to the whole experience without waiting 2 years to begin seeing results.
Agile Client Onboarding:
- Meaningfully transforms the whole experience
- Gives you value from day one
- Generates data that tells you where, and how, you need to iterate and develop
Key Rules for Agile Transformation
Gardner laid out 4 key rules for building an agile framework in your next digital project.
- Determine who you want to impact. Who will be the center of your transformation? Clients? Advisors? Back-office? Once you decide, you need to deeply understand what their experience looks like.
- Cover the whole experience (or as much as possible). Once you understand their experience, you need to choose a solution that will actually affect, and transform that entire experience. Don’t settle for use-case-centric transformation.
- Start and make a difference today, not next year. With an agile approach, you adopt software today that gives you meaningful day-one functionality while you map out your data and legacy-system integrations. Those are important, but not as urgent as doing something today.
- Iterate based on real data (not speculation). Agile software will produce real data about how users are interacting with the process, where the bottlenecks are, and where you need improvements. And a truly agile platform will give you the ability to actually make these changes as well.
These 4 principles are the foundation for how Wealth Management firms can avoid the trap of oversimplified use-case projects, and over-engineered BPM projects.
To dive into the specifics of how your wealth management firm can adopt an agile onboarding approach, as well as a real-life example, you can watch an on-demand recording of the CEB Webinar, for free.