Welcome to Kidbrooke's summary of trends for the 3rd quarter of 2021
1. Incorporating Climate Change Scenarios
It is increasingly important to acknowledge the environmental, social and governance aspects of companies' performance as the sustainability reporting matures. In a more environmentally conscious world, efficiently incorporating this data into the portfolio allocation strategies will likely separate the winners from the losers. In this context, data management and reporting tools will play a pivotal role in conducting such analysis. According to GIC, incorporating climate change scenarios into financial decision-making could be a great starting point. Therefore, we at Kidbrooke decided to provide a set of outlooks to clients who wish to consider climate risk scenarios. Our technology delivers an ability to incorporate scenarios across all applications powered by OutRank. This allows for adjusting the expected market returns, asset classes and volatility for loss of productivity as measured by GDP per capita, costs of transitioning to low-carbon technology and decline in economic activity. The magnitude of the adverse productivity effects caused by climate change remains uncertain but today it is possible to navigate this uncertainty by relying on advanced stochastic analytics.
2. Digital Journeys: Every Aspect of Value Chain Matters
Accessing digital capabilities through partnerships is one of the most efficient ways for incumbent financial institutions to deliver competitive services to their customers. In the WealthTech space, there is an entire ecosystem of providers offering cutting edge solutions across the value chain: from onboarding through analytics, user experience and, finally, execution. For instance, in May, Kidbrooke partnered with additiv, a leading SaaS and embedded finance provider. The combination of our technology enables end-customers to utilise Kidbrooke's financial simulation engine through additiv's Hybrid Wealth Manager and assisted Wealth Robo Advisor products. Evida, a Swedish independent financial advisor with no in-house development team, was the first to test the collaboration results building a next-generation financial-planning software tool capable of simulating their clients' most complex financial situations holistically. You can read the case study on their experience through the link in the description.
3. Digital Communication Should Go Both Ways
Customer engagement is one of the most important activities that a financial services firm can undertake. Not only does it build customer loyalty by developing relationships with customers, it will ensure they choose you over the competition. Even more interesting is how engagement can enable listening to customers, learning more about their needs and behaviours and using that knowledge to improve your offering to them. The practice of "push" communications or talking "to" customers is used almost universally; the concept of "pull" communications or drawing customers into a conversation, is used less frequently but can yield powerful results. With OutRank, for example, a customer can activate financial analytics on demand when proactively evaluating the performance of their investments or checking the state of their financial health in your digital client portal. The output of our financial simulation engine can be used to ensure that the information the end-customers receive is relevant, accurate and consistent with your institution's house views.
Stay tuned for further announcements on our journey in our upcoming podcasts and webinars. See you next quarter!