In an age of increasingly tech savvy consumers, digital strategies are very much de rigueur for wealth management firms. However, all too often, businesses hire a digital director and then come to a standstill, believing the digital box to be ticked. While this is a start, there is much more these firms need to do to ensure they are making the most of the technological revolution.
The problem for many wealth management firms in this space is that they have had to become digitally savvy relatively quickly. Until recently, many firms operated completely ‘offline’, with handwritten memos, fax machines and mountains of paperwork very much the norm. The advent of emails and more advanced CMS systems obviously changed that, but these were treated as add-ons rather than replacements. This can be seen when you compare modern start-ups, which operate remote, paperless environments with integrated systems, with more established companies, which often juggle aspects of the old and the new world through clunky, inefficient operating models – some of which date back to the 1980s.
In today’s connected world, it’s easy to dismiss the latter companies as backward and on the brink of being obliterated by newer, slicker companies – in an Uber versus black cab scenario. In popular culture, we are inundated with technology in all its weird and wonderful forms (hotels staffed by robots anyone?) and we forget that technology is not always the be all and end all.
While many start-ups may have some enviable technological advantages, we need to remember that a business is made up of many parts. Even if a company is struggling in the technology stakes, a well-run company is likely to have a number of other positive attributes (that the, on paper, ‘nimbler’ start-ups might lack). These might include a trusted and well-respected brand, a strong management team, strong cash flow, a promising growth pipeline… the possibilities are endless. However, underpinning everything should be a well-thought out business plan with clear objectives. If a company does have these points in its favour, it is in a good position to implement an effective technological solution.
Technology is not an end in itself. As a society, the best solutions have been those that have enabled us to break down barriers and to improve productivity, but once they’ve achieved these lofty heights, still offer the potential to move us forward further. A good example of this is the telephone, which has broken down time and geographical barriers, allowing people to communicate instantaneously from one end of the planet to the other. More recently, smartphones have taken this concept further, by enabling us to manage our lives ‘on the go’, whether that’s transferring money, shopping, or having live video chats, challenging existing societal and commercial constructs, such as high street banks. The advent of 5G is likely to take this even further when it launches.
Financial services firms need to take this on board. While they may lack a slick, modern technological solution that they can boast about in their prospectuses, if they have a pedigree of good governance and track record of customer satisfaction, they have the blueprint for one. Providing a company is healthy and forward-looking, with the help of the right provider, an effective strategy is never far away. They’ve done all the hard work – building a respected company – and technology simply gives them the ability, for instance, to either streamline their customer services or cut down on burdensome admin.
The best firms understand that good technology fits in with a company, and this is where many less robust companies come unstuck: they are fooled into thinking that upgrading to the latest technology will somehow kick start their business. This couldn’t be further from the truth.
Technology may form the skeleton of a business, but the flesh and muscles represent the hours you’ve spent building it up, whether it’s through getting to know your customers, or steering it through the uncertain post-crisis years. Firms who understand this stand to benefit the most from technology.