Regulatory changes, major demographic shifts, competition from the growing fintech market – financial services enterprises are facing disruption from every angle today. To meet these challenges and provide the seamless experience clients expect, financial services firms are coming around to the need to ‘go digital.’
And it would seem they’re on the right track; according to McKinsey, “40 to 45 percent of affluent consumers who switched their primary wealth management firm in the past 24 months moved to a direct, digitally-led firm – in many cases choosing to work with a phone-based advisor at those firms.”
For enterprise organizations rooted in legacy systems and organizational structures, however, digital transformation is a massive undertaking. Banishing data and departmental silos company-wide and overhauling the company culture doesn’t happen overnight. But as your front line, advisors need to be digitally enabled sooner rather than later; your job is to get them there.
We sat down with leaders from our partners at Salesforce, Microsoft, Facebook and LinkedIn to discuss this issue of digital for financial services. Their work with a wide range of financial services customers to implement digital technologies provides an up-close look at the why and how of moving quickly for the best advisor (and customer) digital experience.
The Need for Speed
During the course of our discussion, we identified four reasons it’s time to move to digital now.
“The gap between those that are moving fast and those that are not is widening. The importance of moving fast, especially for folks … that have an asset and a dependency on agents and financial service advisors … you are competing against many directs. As they continue to invest in that technology and being able to go direct to the consumer, your ability to deploy your distributed workforce with technologies to better connect with the consumer is going to be really important.”
– Brad Auerbach, Head of Financial Services, Facebook
Whether a fintech startup, robo-advisor or digitally native financial wealth management firm, the options continue to grow and consumer tastes continue to trend toward the desire for a seamless, online experience on the channels they use – including social media, text and email. (Learn how Cetera and Prudential are empowering their advisors to text clients and prospects.)
While advisors are often using these channels, it’s also important to ask yourself whether that interaction data is being captured in your CRM, which can guide your advisors’ next-best actions based on predictive analytics and AI. And, of course, are the communications compliant?
2. Talent Acquisition and Retention
“85 percent of (advisors) are out of the business in four years. Paul [LaPiana] at MassMutual mentioned his 17-year-old daughter is glued to her phone, and her friends are talking about Amazon and Google and Facebook as ideal places to work, and I think there is work to do in the financial service industry to attract that talent pool.”
– Craig Canton, Digital Strategy Partner for Financial and Professional Services, LinkedIn
The workforce of today, not to mention the up-and-coming digital natives, are consumers by nature. They’re used to the easy technology of Amazon and Netflix and will not be satisfied with the tedious enterprise software of old. An MIT Sloan Management Review/Deloitte study perfectly elucidates this: 76 percent of survey respondents consider it very important or extremely important to work for an organization that is digitally enabled or is a digital leader. Only 38 percent of FSI respondents agree or strongly agree that their organization offers employees the resources or skill-development opportunities they would need to thrive in a digital environment.
3. Death of the Funnel
“The funnel is not a funnel anymore; the buying process is no longer linear.”
– Chandra Stevens, Worldwide Marketing Solutions Director, Microsoft
Without a straight line from first contact to purchase, nurturing leads has changed. Chandra says that the way to make advisors effective is by enabling a ‘holistic continuum of engagement.’ By bringing the multitudes of data – social, CRM and more – together, you can drive personalization both at the corporate-level and down to the adviser agent’s client, so engagement occurs throughout the prospect and client lifecycle.
4. Ultimately, it’s Inevitable …
In the end, the shift to digital in financial services is going to happen. When talking to clients about why they need digital, Canton from LinkedIn likes to reframe the issue away from immediate ROI to opportunity cost.
“Today, you’d never say, what’s the ROI of having a laptop?,” he says. “We’re heading in that direction. And I don’t think we have to talk about what happened to Blockbuster. We certainly don’t want to go that route. So helping executives understand this is something that’s coming, and while ROI is certainly important, you have to think a little bit farther down the road, what do we want this business to be like in 10 years or 20 years?”
Making it Happen
As we all know, the ‘why’ is always easier than the ‘how,’ particularly when you’re talking significant change. Our expert partners had four great areas of advice here as well.
1. Rally Around One Ultimate KPI
“What is the ultimate KPI? At the end of the day, what is that number one goal that we’re trying to accomplish by investing in this digital transformation, by wanting to move fast? That is going to help the process not just when you start, but when you start evaluating and analyzing the data, too.”
– Brad Auerbach, Facebook
One organization can have many KPIs. Different stakeholders have different goals and points-of-view. But deciding on one that will move the needle like client net promoter score (NPS) or growth of assets under management (AUM), brings the energy of teamwork and begins to dismantle those departmental silos I mentioned earlier.
2. Focus on Quick Wins First
“Big bang transformation is dead. You can not … transform everything all at one time. Where I’ve seen our customers be really successful is to think about the bigger picture around transformation, but then when it comes to implementation and execution, taking one area of the business, starting there first, and getting some quick wins, and then the budget comes, then the subsequent projects come. I think that’s been really helpful for our customers that have been trying to do big transformation but getting success quickly.”
– Eran Agrios, Head of Global GTM, Financial Services Cloud, Salesforce
Going back to my first point, if your ultimate KPI is increased revenue or increase customer satisfaction/experience and engagement, then advisor enablement can reasonably be the first area of digital transformation. Using an all-in-one platform built specifically for financial services advisors, like the Hearsay Advisor Cloud for compliant social media, text, voice calls and email between advisors and clients, can give you an easy, quick win. And if you have a CRM, integrate for even greater returns.
Eran says, “We’re treating these advisors as human integrators, and I think when we look at the technology, and we partner well with partners like Hearsay, and we bring this information into one place of engagement, we’re really freeing up the time to allow the advisers to have valuable conversations with the customers.”
3. Use Stories, Verify with Data
“Everyone has this large, massive data estate. So how do you apply intelligence to the data to determine if you’ve developed the right use case that will produce viable results, and that the data you have in mass is the right data to use?”
– Chandra Stevens, Microsoft
A typical starting place for finding those first and subsequent quick wins is with anecdotal stories. What pain points are you hearing from advisors? What success stories from advisors and customers? And with your data analytics, what can you find to back-up these stories to move ahead quickly?
4. Iterate Continuously
“We release updates every two weeks, and advisors can provide feedback knowing that problems will be fixed quickly, rather than the old process of waiting four to six months to get something they often didn’t even use.”
– Fortune 250 financial services group and Hearsay customer
The most effective digital transformation teams don’t wait for the perfect plan. They operate on an agile model; as soon as they have a minimum viable product, they start running user tests to learn what needs to be changed and improved, then move on to the next set of tests, and release updates and upgrades to users frequently.
Although the financial services industry is slightly behind the curve in the move to digital, most organizations are making at least some moves to catch up. The questions now are: Who will get it right, and will they be fast enough?