Using technology to improve distribution capabilities for retail customers is a top priority for asset managers. Communicating complex concepts such as total return, performance relative to benchmark and performance relative to funds with similar objectives may be simple for institutional and professional investors who are conversant in understanding this data. However, for retail consumers, fund managers need to tailor their communication to ensure true, fair, and accurate understanding of what all the data means.

Some of these topics were addressed by Deloitte Consulting in a report entitled “Distribution 2.0: How Technology Will Redefine Relationships with Asset Management Clients.” Several categories of distribution technology were discussed, including an integrated data repository, a client analytics engine and client experience applications. According to the Casey Quirk Distribution Benchmarking survey cited in the Deloitte report, only 18% of asset managers believe their technology organisation has the full set of skills needed to support their distribution technology needs.

Let’s take the most important one for the customer: client experience applications. The data shows that many asset managers think clients are more satisfied than they actually are: buyers score service quality as much as 14% lower than most asset managers perceive, partially because many investment firms have taken an incremental approach to upgrading distribution functions, creating suboptimal outcomes.

What if, by adopting a user-friendly, cost-effective technology, an asset manager could ace the competition to be the best at attracting and retaining customers? The gap between customer service level perception and reality could be closed. Let’s look at the three phases of customer interaction.

A - Acquire

C - Connect

E - Engage

Acquisition

Acquiring new customers requires the definition of a clear strategic position, with a visible USP. Offering superior fund performance is one way to attract customers and grow your brand, but customer experience ranks high in the expectations that prospects have. Building a user interface to show to customers as a demo during the sales process takes time and money.

Imagine a tool that enables a customer to see her fund performance within the context of her total net worth. Using a scenario calculator API already easily integrated with your existing systems that can be demonstrated online will save time to market. Presenting a demo with sample data that mimics the user profile will entice consumers to become customers. Once the customer says yes, the onboarding process can be integrated with the first upload of customer data into your data system.

The key requirement is usability. Consider Kidbrooke, where our team has conducted extensive user testing together with our partners to make our offering easily adoptable. With OutRank, you’ll find it easy to demo the investment products to customers with no experience of financial planning software.

Connectivity

Once the customer is onboarded, you can build that relationship by offering clear, concise methods of connecting, with an integrated approach to marketing, sales and service that is safe from a risk management perspective.

Ensuring that products meet the suitability test - of investment objective and risk appetite - is essential to fulfil compliance requirements. Getting to know your customer is easy by introducing a comprehensive way of modelling different use cases for financial decision support. A balance sheet simulator with an economic scenario generator can serve as an aggregator of customer information in a coherent and concise manner.

In the case of Kidbrooke, we offer a secure, stable, and resilient way for asset managers to present a variety of scenarios, including pension planning, financial planning and liquidity forecasting direct to customers. Consider Kidbrooke’s OutRank API, easy to use, transparent and highly customisable, used by Skandia Life, one of Sweden’s largest insurance companies. 

Engagement

When customers are investing in funds and using the application to build a positive client experience, you can extend your relationship with them by using data analytics to improve customer experience across multiple dimensions.

Equally, you can build competitive advantage with client experience applications that deliver investment-oriented content, which can play a key role in helping an investment firm develop relationships.

In addition to investment performance, client access, convenience and specific facilities/solutions serve as factors that contribute to customer satisfaction and allow for cross-selling new products or upselling to premium pricing models.

Deepening customer loyalty with existing accounts produces data that can be shared in a continuous feedback loop with investment teams looking to develop new funds based on new asset classes or new methods of portfolio construction.

Investing in new technology that enables better customer interfaces and understanding of customer needs is important. With Kidbrooke, you will have a partner keen to work together with your teams and innovate faster. With Kidbrooke’s OutRank API, you can accelerate new product development without the risk of a disruptive change programme. 

Differentiating with Tech

What is the right way for a sound business to build a sustainable winning position?

“Distribution technology can be viewed not as a singular proprietary system, but rather as a combination of component technologies, third-party and in-house, brought together within a clear blueprint,” says Deloitte. Rather than attempting a massive build project, why not start with integrating an API with a proven track record into your technology stack? Connect it with your data repository, client analytics engine and other client experience applications with a cloud-native company utilising a road-tested, low-risk service.

At Kidbrooke, we focus on optimising customer interactions with a digitally enabled product that supports your internal operations, cybersecurity, data privacy, GDPR and other regulatory requirements. Your internal business partners in Risk, Compliance, Audit and Finance will be confident in our trusted approach to information management. We believe that OutRank is the perfect high-value, low-risk option for buy-side firms.

Get in touch today!

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References:

https://www2.deloitte.com/us/en/pages/financial-services/articles/technology-asset-management-distribution-whitepaper.html

https://www2.deloitte.com/us/en/insights/industry/financial-services/financial-services-industry-outlooks/investment-management-industry-outlook.html

https://www.integrity-research.com/mckinsey-traditional-asset-managers-embracing-ai-alternative-data/

https://www.pwc.com/gx/en/industries/financial-services/asset-management/publications/asset-management-2020-a-brave-new-world.html