Wealth managers often build customer journey islands when introducing a new service or feature. Opting instead for use case-agnostic technology that supports all components of the organization’s strategic roadmap can grant a financial institution the necessary flexibility to achieve a strategic freedom to innovate.
In theory, there could be no better moment to upgrade a financial business. The pressure is on - a traditionally conservative industry is expected to match the quality and efficiency of their digital channels to the likes of the well-known tech and entertainment giants. The technology is there – the combination of open banking and advanced financial analytics can make wealth management services more scalable and inclusive than ever. In practice however, incumbents continue to release siloed customer journeys struggling to manage the infrastructural challenges and falling deeper into legacy traps.
Legacy infrastructure is undoubtedly one of the most common obstacles for innovation in the established financial industry. Antiquated software still runs key processes within banks, insurers, and wealth managers. These legacy systems are often incompatible with the components of modern digital and hybrid channels and updating them is expensive and cumbersome. Still, legacy challenges seem imminent because they are a by-product of innovation processes accumulated over decades. However, with the right approach to innovation it is possible to optimize the architecture of new solutions to prevent the legacy traps at least a few years down the line and build consistent, reliable and holistic digital experiences.
The most common mechanism of falling into the legacy trap is closely connected to a classic approach to innovation. It would typically entail starting with a small use case, testing it and if successful, rolling it out in production. Therefore, when a bank, an insurance company or a wealth manager build a new customer journey, they typically build an isolated functionality based on a specific use case. We call these isolated pieces of functionality “customer journey islands”. At this point, the plan is to build and market a simple yet innovative service and let it grow and develop within the product line of the institution.
Fast forward one year and the institution’s innovation team comes across a new functionality that they believe would tap into the demand of their customers. They build yet another customer journey island.
There are a few issues that may arise at this point:
While starting small is a good idea in most cases, all the changes you decide to pursue should come with a long-term vision. Therefore, technology that you use for your first steps should be able to withstand the scrutiny of the real-life conditions and be flexible enough to be continuously reviewed and updated with additional features way into the future. One way to pursue this strategy is to rely on use case agnostic components of the future digital experiences, such as financial analytics, and then integrate those across your customer journeys. Furthermore, you should consider an API-only approach for vendor solutions, which helps immensely if you strive to achieve a holistic approach to end-customers relationship with your institution.
There are several benefits of use case agnostic technology:
In the context of accelerated digitalization, legacy challenges are likely to occur much faster. In this environment, a strategic approach to selecting technology powering your digital wealth services becomes critical to achieving high flexibility and speed of your innovation process. Therefore, it might be a good idea to start with reviewing your roadmap and ensuring that the technology you select supports all the use cases you are planning to build and enables you to adopt a holistic approach to your institution’s relationship with every customer. This way, you not only avoid the integration issues that inevitably come with customer journey islands, but also ensure that in time you can build a holistic, consistent, and robust service that secures your position in the new reality for years to come.