Digital Transformation is More than Just Automation


June 19, 2019

As disruptive technologies increase in prevalence within wealth management, traditional firms face a growing need for meaningful digital transformation. While research reports are published daily on the best way to “go digital,” firms are still struggling with getting started.

The question arises: what is digital transformation? Is it adapting to compete with Robo Advisors by automating ad hoc and repetitive tasks? Or is it using technologies to enable new value and innovation?

It’s a question of Automation vs. Digitalization.


Whats the Difference?

It essentially boils down to Workflow vs. New Value.

Automation is simply the process of making manual tasks more efficient through digital technology. It’s a standard, first-wave effect of going digital – machines saving humans time and energy. An obvious example within our industry is online forms with auto fill parameters. Good automation means that a client or advisor never has to enter the same piece of information twice. Robo Advisors are another form of automation, but their core function isn’t changing the essential value proposition of wealth management.

Digitalization is a more visionary approach, adding new value to firms and customers, instead of improving upon existing tasks or services. Rather than replacing human tasks with automation, digitalization is an enabler of value-add transformation. Instead of just using an autofill form, digitalization includes collecting that information and using it for advanced insight such as assessing risk tolerance, anticipating future KYC points of interest, and providing intelligent, customized product recommendations.

Now let’s look outside the industry for another example to differentiate the two concepts. In public libraries, tasks and services such as acquisition, cataloguing, online public access, circulation, and administrative duties have long been automated. Many even have self checkouts, allowing patrons to research, locate, and check out materials without any human interaction. But libraries have done more than just automate their services. digitalization has redefined their services and value for the public. They can sort demographics and past history of checkouts, allowing them to tailor the library experience for each patron, or even use automated catalogues to create a GPS-navigation app to help patrons locate items.

Digitalization allows libraries to innovate and think beyond the original scope of their brick and mortar origins. It’s the same in wealth management; automation usually assumes a firm is trying to keep pace with the times, but digitalization can mean setting the pace.


A holistic transformation

It’s not about simply creating a paperless work environment, or incorporating digital signatures, but a holistic transformation. Gartner notes that “Digital business presents tremendous opportunities for innovation and competitive advantage. Creating this value requires a complete rethinking about the work itself. Merely inserting digital technologies into the existing process is insufficient to realize the full value of digitalization.”

Digitalization often starts with Automation, and migrating your data from paper copies to a digital system is one of the first steps. Once paperless, and with your data easily accessible, you’re closing in on our model of an agile transformation.

When firms are mandated with a need to automate or digitalize, they often leap to the assumption of only two choices. One is a massive overhaul of the entire system, not only taking up to 18 months, but resulting in a rigid model inflexible to iteration. The second choice is deploying small, rapid fire changes with limited implementation.

Agreement Express advocates an agile model which doesn’t try to predict the future, instead using hard data to inform technology with a vision of iterating as regulatory environments, competitive landscapes, client expectations and market realities change.

While Automation is powerful, the full value of digitalization, which extends beyond workflow into innovation, can be achieved through agile software. It provides the insight required for data-driven decisions that move the business forward.


Lets take a look at customer onboarding as an example.

A Digital Banking Report from The Financial Brand reveals that only 4% of financial services institutions think their onboarding program is very successful, and according to the CEB 2015 Wealth Management Technology Agenda Poll, a significant 88% of respondents found “Improving Client Onboarding From Front End to Back Office” to be their top priority, while only 65% were confident in their ability to execute that priority.

Improving Onboarding from a digital perspective requires the simple yet efficient use of automation, and the innovation of digitalization. Instead of pursuing a traditional BPM which will take up to two years to implement, or narrowing the scope of your project to one aspect, such as opening new accounts, the right software can seamlessly integrate KYC updates, new account opening, private placements, account transfers and everything else into one digital experience for both the advisor and the client and its functional from day one.

Automation makes for a more efficient onboarding process, but it’s still spinning its tires (you’ve just started spinning them faster). Digitalization solidifies a foundation for growth and active transformation, adopting predictive analytics, omnichannel experiences, product recommendations and Robo Advisor integration.


Automation alone is losing its relevance. Firms who maintain the status quo by being slightly more efficient won’t be the ones who outpace the competition. Digitalization goes beyond existing standards and opens the doors for innovation, expanding how technology can shape how business.

Firms can leverage the power of digitalization through agile transformation that provides value from day one and is constantly generating and analyzing data, guiding you with a roadmap as you go. It’s a customer centric feedback loop that can adapt on the fly. Rigid automation may make day-to-day tasks easier, but digitalization can absolutely transform the client/advisor experience. Consider ways that it can analyze internal data from your firm, or sentiment analysis to present consumer behavior, or recommendation engines that mine realtime data and pair clients with new products, or predicting their future desires based on this data. The potential of digitalization is huge, especially when compared to the relatively simple offering of automation.


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