“Everyday you are not collecting data, your competition is learning while you are planning”
Each of the wealth management firms we’ve spoken to are fixated on the potential of switching to digital. They tell us they want to make the most meaningful digital transformation in the shortest time possible. Out of the hundreds of firms we’ve observed over the years, most make one of two mistakes in their digital transformation efforts. They either:
- Fail to see the whole picture. They reduce the scope of their transformation to one use-case, failing to transform the whole experience of their target audience, including clients, advisors, and back-office staff.
- Dream too big. They scope a massive BPM project that is over-engineered, takes years to get to market, and by the time it does, it is outdated and inflexible.
We explored the root of this dilemma and how real organizations are breaking through this paradigm today, in our latest webinar with our CEO Mike Gardner and CEB TowerGroup.
Use-Case vs. Client-Centric Transformation
Technology and operations leaders recognize that it is almost impossible to make meaningful digital change in traditional financial institutions. The organization is often resistant to change their legacy systems that have proven to be compliant and effective. So they make a sensible decision to reduce the scope of their digital project in the name of getting something live within the year.
Reducing the scope of digitizing the client onboarding process can look something like this, executing on just a sliver of what affects the full process.
If Wealth Management firms were to digitize the entire process, and each participant’s experience, it would look more like this.
While the first option may be faster and easier to get off the ground, it isn’t an acceptable solution for clients, advisors, or back-office staff. Imagine, for example, an advisor is given access to a new digital forms solution that is able to collect client information digitally on some, but not all of the forms involved in the end-to-end onboarding process. That advisor still has to manually enter that information to perform KYC updates on paper, or manually manage account transfers, which leads to a disjointed, confusing, frustrating experience for everyone involved. You simply haven’t made digital transformation, and there’s too much at stake not to.
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. Similarly, advisors who consistently perform the highest use more technology overall (CEB, Advisor Competency Diagnostic, 2015).
The institutions that realize digital transformation is 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 two or three years to start 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 staff? You need to have a deep understanding of what their whole experience is 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 a transformation based on use-cases.
- Make a difference today, not next year. With an agile approach, you can get started and adopt software today that gives you meaningful day-one functionality while you take the time to map out your data and legacy-system integrations. Those are important to establish over time, 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. 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 a free, on-demand recording of the CEB Webinar.