Embracing the Evolution: of Digital Collaboration in Wealth Management

Article By Matthew Faraone - Managing Principal, Phil Kerkel- Managing Principal and Yola Yu - Principal Consultant, CAPCO- Global business and technology consultancy.

We expect COVID-19 to have a lasting behavioral impact that will accelerate the need for the digitalization of the financial advisor-client relationship. As a result, wealth managers must continue more than ever to pursue forward-looking strategic digital choices despite−and, in many ways, because of−the challenging environment of the COVID-19 crisis to weather the challenge and remain competitive. 

Even before the crisis, digital transformation has driven a profound change in the wealth management industry. But, too often, wealth managers have adopted an attitude of a digital-first experience for all clients across all products and the entire service value chain without closely considering the most effective experiences and collaboration models for their client segments.

Part of the reason for this oversight is that Millennial and digital transformation have become nearly synonymous. Wealth managers want to meet Millennials’ presumed digital expectations to compete for the great wealth transfer expected over the next few decades. Therefore, many wealth managers embarked on a digital transformation journey, explicitly targeting the Millennial client base−sometimes at the expense of a consistent experience for their current clients.

Now, COVID-19 is putting the past few decades of strategic digital choices to the test. For many wealth managers, the crisis has not only stressed business resiliency and revealed gaps in the operating model, but also shed light on clients’ holistic digital experiences. As most current interactions are confined to digital, financial advisors are suddenly challenged to deliver the same quality of service via those digital channels. This, in turn, stresses the demand for different digital collaboration models across client segments.

Our view has always been that digital transformation must allow wealth managers to compete for growing Millennial wealth as well as deepen relationships with their existing client base.

Wealth managers need to pointedly invest in appropriate user-driven omnichannel experiences and use flexible and client-focused digital collaboration models to attract Millennial wealth. wealth as well as deepen relationships with their existing client base. Wealth managers need to pointedly invest in appropriate user-driven omnichannel experiences and use flexible and client-focused digital collaboration models to attract Millennial wealth. As wealth managers begin to transition from crisis management, we are keen to share a few insights, developed through deep user research, on effective foundations for creating a sound and client-centric digital transformation strategy.