Why digital matters to wealth management success
Jun 21, 2017
Knowing where and how to bring in digital initiatives to the organisation, and then encouraging all staff to embrace and harness them to derive the most value, is a lot easier said than done. Everything needs to start with the customer in mind.
Nakul Kurup, Head of Digital Sales & Monetisation, OCBC Bank
Alvin Lim, Head of Digital, Singapore, HSBC
Lee Ng, Vice President, MetLife Innovation Asia, and Chief Operating Officer of Lumenlab, MetLife
Yashesh M. Kampani, General Manager, Banking and Financial Markets, ASEAN, IBM
Mark Wightman, Partner, Wealth & Asset Management Advisory, EY
Walking the talk when it comes to digital advice, platforms and tools remains a big challenge for most banks and other wealth management institutions in Asia.
The hurdle for most firms and senior executives, it seems, is turning the stated commitment into initiatives which are tangible and measurable.
For example, where, when and how should banks bring in artificial intelligence (AI) or robotics? And is it able to add value to the bottom line, clients and internal stakeholders alike?
Now is the time for many institutions to get beyond proof-of-concept stages to implement a digital strategy which will result in revenue.
These were among some of the key observations of speakers at the annual flagship Hubbis Digital Wealth event in Singapore in June.
Getting the starting point right
Part of the challenge, according to industry practitioners, is that getting any clarity over how people think about ‘digital’ is tricky; the same question to two people leads to different answers.
Further, it needs to be a lot more than just the user experience at the front end; digital operations in the middle and back offices are critical components too.
At the same time, however, institutions sometimes forget about the customers in their path to digitisation, and it becomes just a business process.
Yet innovation begins with the customer. The choice to go digital is not one that institutions should get to decide. Instead, they need to be where their customers want to be.
In line with this, asking whether digital matters might be the wrong question. Digital may be hot now and firms need to address it, and then the next thing will come along, such as AI or blockchain.
An institution’s future business success therefore depends upon its ability to serve its customers in the most effective and efficient manner – and also to delight them.
A project by MetLife called 10X, for example, looks at eight vectors of change where consumer behaviour will drive changes in the fintech industry. From ‘experience is everything’ to ‘risk and trust is fluid’ and ‘intelligence everywhere’, the firm uses this point of view to look at what it needs to change to address future customer needs.
For many banks, the approach to digital innovation has been to make things simpler, better and faster for its customers.
In general, however, among the different types of institutions, local retail banks are making more progress in the digital wealth race in Asia than universal banks, international private banks and insurance companies, according to a poll of delegates
Making it measurable
In trying to measure the success of digital, establishing a direct correlation to revenue uplift is difficult, whereas linkage to cost savings is possible.
Too many banks seem to be applying what some practitioners call ‘digital lipstick’, rather than truly adopting enterprise-wide digitisation unless faced with an existential threat.
Part of the problem, say practitioners, is that most banks don’t capture data or insights in a way that will be effective.
Partnerships, meanwhile, offer one route to potentially leapfrogging stages of digital development. Firms should not be under the illusion that they need to build everything themselves; they should be more selective at what they choose to do in-house, according to industry practitioners.
Resolving some of the challenges – and speeding up transformation within institutions – will also come down to a combination of people and technology.
There is a still a significant need for cultural alignment and transformation, as part of the need to become more agile and to drive real change.