Touchstone CRM recently hosted a panel discussion on digital transformation strategies – and in particular the data protection issues related to the steps institutions are taking as they improve their business through technology innovation.
The speakers included representatives from Gulland Padfield and Microsoft and the event was chaired by Wendy Spires, Head of Research at WealthBriefing.
For those who were unable to attend, consultant Dennis Harhalakis summarises his key takeaways from the discussion:
Institutions remain unprepared for GDPR implementation With the General Data Protection Regulation (GDPR) scheduled to come into force in early 2018, a host of new requirements are about to descend on institutions already struggling with MIFID II. Hitting the MIFID deadline will be challenging for most and GDPR is barely on the radar screen – according to participants in the audience at the event. At the same time, while GDPR imposes enhanced consent and breach notification requirements on institutions, the rollout of digital channels means that Wealth Managers are gathering more information than ever about their clients. Without proper systems and processes in place for the collection and custody of personal data, institutions will find themselves vulnerable to cyber-attacks, client complaints and regulatory censure.
Weak Data protection is the source of most of the recent damaging cyber-security incidents in Wealth Management. Greater online connectivity between all parties (clients, institutions and third party suppliers) is inevitably leading to greater vulnerability to these types of data leaks. WM firms are still underprepared to deal with the fall-out from a leak and need stronger protocols in place. While all firms have business continuity plans, these are little more than a set of prepared responses to pre-defined risks. With the rise of social media, the real time news cycle and mobile technology, today’s crises play out at incredible speeds and within hours of a security breach, CEOs may find themselves fielding questions about data encryption policies and firewall protocols.
Client segmentation strategies need to improve Segmentation is about bringing clarity and discipline to the process of aligning your products to your clients’ needs. Classic segmentation uses AUM, geography or sources of wealth but whatever methodology you use, there are some key principles:
· Segments must be MECE (mutually exclusive, collectively exhaustive)
· Beware of over segmentation. You need to be able to fully support each segment
· Consider carefully what will happen if a client changes segment (e.g. offshore client moves back to UK) and how the relationship can be moved without negatively impacting the client experience
Digital transformation needs to keep sight of the client experience As WMs rush to roll out digital platforms, it’s easy to mistake user experience for client experience. User experience is about what technology can provide. Client experience is what you should provide according to client. A client centric digital strategy is based on understanding the needs of clients and using technology to deliver those needs. A few things to remember:
· Digital delivery is not the same as digital design. Digital delivery puts existing processes onto a digital platform such as web or mobile. Digital design captures each part of the user experience in order to provide data to enhance and customise the client experience.
· Simply recreating/moving the existing client experience online without transforming it will not work. Onboarding is often the first time a client interacts with an institution, so getting it right is critical. Digitally transformed, this is a process that uses government issued IDs, facial recognition and other technologies to create immediate account access. Putting the account opening forms on a website for the customer to print off and send to the bank just replaces a negative offline client experience with a negative online client experience.
· A successful digital transformation requires breaking down each part of the client journey and making it ruthlessly client centric.
· Constantly evolving customers require constant client experience evolution.
· Transforming client experience is more about organisational mindset than a series of projects.
Future challenges in data – from a technology perspective the biggest challenge for WM firms will be their ability to mine large data sets and create unique user experiences. The pressure for this will come from clients demanding that their WM client experience is similar to the client experiences they have with their digitally designed product and service providers.
About Gulland Padfield
Gulland Padfield is the specialist consultancy to the management teams of Wealth Management firms and Private Banks.
Over the last 14 years, Gulland Padfield’s teams and consultants have worked with 11 of the Top 20 private banks as well as other leading Banking groups, Wealth Management firms, Family Offices, Asset Management institutions and Services firms to provide guidance, practical support and pioneering ideas in the area of Client and Customer strategies.
The firm’s teams deliver projects internationally from its offices in New York, London and Bogota.
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