How Wealth Managers Can Leverage Financial Analytics to Improve Customer Experience
Consumers today are managing a large part of their financial lives in a digital setting, giving financial institutions an opportunity to use gaming elements to grab their attention and garner loyalty. Consequently, wealth managers strive to introduce these engagement practices in their digital platforms, as well as to show consumers informative videos and interactive learning components to promote financial literacy.
It is no secret that consumers are more likely to reach their saving goals if the financial institutions leverage the psychological UI elements responsibly. When used well, gamification can be a powerful tool for increasing access to financial services, improving financial literacy, and making the experience more enjoyable. In fact, a study by the University of London’s Bayes Business School demonstrates that gamification techniques can encourage investors to lock away more of their earnings in investments.
While the benefits of gamification could help wealth management companies to democratise investment management and empower retail investors by extending access to financial markets, it may also encourage users to trade more frequently than required and take higher risks. In an earlier post, we critiqued gamification in financial context and discussed the latest regulatory approach to these engagement techniques. In this article, we will delve into more responsible alternatives wealth managers can deploy to achieve long-term customer satisfaction and brand loyalty.
Teaser Analytics: Empower Customers to Learn More about Your Firm
Building responsible and engaging wealth journeys is not easy. Banks, insurers, wealth managers, execution platforms and advisory firms need to offer solutions that will attract, retain, and educate investors. A good way to start is to create an engaging onboarding experience that helps clients deepen their understanding of their financial situation, the available investment products, and the impact of financial markets on their portfolios over time.
In our experience, a retail investor would often start with digital channels even if they are planning to contact their advisor in person. At this stage, it is paramount that the wealth manager shows that they can provide the client with an environment to formulate their objectives and explain various investment options in an intuitive manner. The financial analytics suites like Kidbrooke’s OutRank® can help financial institutions provide goal-based planning elements at the teaser stage, guiding the customer to understand how engagement with your firm would help them achieve their financial goals.
At this step, it is important to balance engagement, simplicity, and the level of detail. Our customer Skandia achieved this by introducing multiple stages within their onboarding journey. Their digital pension journey starts with analytics that require only two inputs – the salary and the age of the user, the other elements of the forecast are filled with population averages. At the second step, the user is advised to provide more details about their economic situation including risk preferences. Hence, initially a potential customer can gauge a rough estimate of the value Skandia can provide for them, gradually receiving more tailored forecasts as they navigate the journey ending with a personalised regulated advice.
A responsible and consistent teaser can help customers to align expectations for choosing your firm/wealth manager, while serving as an engaging way to start your relationship. Here you can leverage one of the main superpowers of the gamified elements – you can empower the investors with every skill level to discover the opportunities offered by your institution, get unique insights about their behaviour, and use their feedback for developing your services further.
Post-Purchase Engagement: Wealth Managers – Don’t Miss Out on Engaging Your Customers
Many wealth management firms offer initial guidance but often let go of a customer after they execute. We see many firms miss out on supporting their clients on an ongoing basis, which could play a role in generating repeat business and strengthening their brand. Wealth managers and execution platforms can help users manage their investments after they sign up for their service by, for example, complementing their offerings with personalised financial analytics.
Even though shooting digital confetti when users buy a stock may seem like an easy way to encourage them to invest more., it is crucial to build engagement around the core value – aiding investors to set realistic financial targets, tracking progress and helping them reach their milestones. This can be done by improving your platforms’ user experience to include tools enabling the customer to perform what-if analysis and evaluate their portfolios on-demand.
Wealth managers can also encourage customers to learn more about their finances by sending relevant and actionable notifications suggesting personalised strategies, guiding the clients to achieve their goals. This way, you can update customers if, for instance, their investments have drifted from their desired risk levels. Our simulation engine analyses the entire balance sheet of a customer, their risk preferences and goals to create and send adjustment suggestions at scale.
Besides, OutRank® utilises proprietary machine learning-driven clustering technology to enable banks, insurers, and wealth managers to suggest better investment deals to customers based on their preferences data. This includes recommending financial products similar to their existing holdings, but with a more sustainable profile, managed by a different manager, or if relevant, with lower fees. These proactive and responsible notifications can help customers deepen their relationship with your firm and achieve their financial goals quicker.
By harnessing the power of personalised content, wealth managers can cut through the noise and build lasting relationships with their clients. For example, they can personalise their marketing by leveraging their institutions’ analytical capabilities. This strategy can take the form of recommending educational resources based on customers’ financial situations. By sending relevant articles, videos and other resources on personal finance, investing, and retirement planning, institutions can nurture relationships with customers and encourage repeat business.
The Role of Consistency in Omni-Channel Wealth Businesses
We investigated several ways to leverage financial analytics technology to power more responsible and reliable engagement across all channels. An important point to consider is ensuring the consistency of digital journeys deploying simulation tools. Wealth managers should establish that the calculations powering their services create a seamless experience where numbers make sense from one step to another, across all channels . Otherwise, one could end up with a fragmented and confusing journey that could damage your brand.
Responsibility Above All: Prioritise Customer Value When Choosing Engagement Strategies
Managing wealth must not be limited to driving business growth – it’s also about wealth managers helping clients achieve their financial goals and dreams and assisting them throughout. By leveraging responsible engagement techniques to help your customers evaluate progress towards investment objectives and envision their future progress, wealth managers support their clients in navigating the complex world of finance with confidence. In the end, it’s all about delivering value and building trust. And therefore, the financial institutions should choose engagement strategies that support their values and contribute to building a favourable environment for long-term relationships.
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