What constitutes a great digital experience? In the financial services world, there are three fundamentals.

Intuitive

Clients shouldn’t struggle to understand how to use an application. We’ve all grown accustomed to iPhone levels of user experience in our everyday lives. Digitalised financial services must meet similar standards of intuition. Delivering that technology ease of use is hard. But if firms don’t, customers won’t engage.

Functionality

Does the digital service actually help people’s lives? What problem is it solving? Digital offerings must be something clients want or need. It isn’t enough to meet the current standard; the digital service must be better than the prevailing delivery experience, either removing a problem or providing a benefit that didn’t exist before.

Digital retail banking is a case in point. Customers’ most common banking activities – be it checking an account balance or making a payment – can now be conducted in seconds through their bank app. No more need to visit a branch during opening hours or hang on the phone waiting to speak to a call centre. Customers enjoy easy, immediate, 24/7 action, while banks minimise demands on their client service resources.

In the investment management and fund administration world, value-adding digital functionality could include self-service investor onboarding and subscription/redemption applications, trade order capture, document sharing, online form completion and signing, and real-time reporting of daily activity, positions and valuations.

Stability

Stability encompasses a number of must-have elements, including security, availability, performance and scalability.

Take Netflix. The service is designed to intelligently monitor users’ download speeds. If a viewer’s internet connection is running slow, Netflix brings in additional servers so it can download more data to get ahead in the programme, then fire it to the subscriber when ready to avoid any viewing delay.

Security has always been crucial, but protecting against hacks and safeguarding customers’ data privacy is increasingly expected. The reputational damage and regulatory penalties that can stem from breaches make security a priority and are capabilities firms need to constantly upgrade to keep pace with fast-evolving cyber threats.

Controls to ensure the right levels of data privilege are also crucial. Staff and clients should only be able to see the information applicable to them. And where appropriate, data must be removed when it is no longer relevant or to meet General Data Protection Regulation (GDPR) rules.

Benefits of digitalisation

Ultimately, the ongoing viability of businesses across the financial services sector depends on providing a smooth digital experience.

Standards of digitalisation are getting ever higher. At a minimum, financial institutions’ offerings must keep pace. A swish digital experience won’t make up for weaknesses in a firm’s underlying services. However, equally, investment managers and administrators with sub-standard digital capabilities will progressively lose the battle for prospects, and find clients switching to more sophisticated rivals.

Alongside the client attraction and retention benefits, digitalisation provides fund administrators and their investment management clients with valuable process and cost advantages too.

Digitalised end-to-end workflows offer investment managers transparent, real-time insights into their marketing, fundraising and client servicing processes. They can track whether prospects have opened a subscription form if they’ve completed it, whether supporting KYC documents have been submitted and how much money the prospect is committing – information firms can use to nudge prospects towards sign-up, address any AML/KYC issues and gauge whether to approach other investors to meet their targets. 

Capturing and analysing data gleaned from the capital raising process and investors’ subsequent digital interactions can also help managers develop more accurate profiles of who their investors are and what they want. Lessons learned can inform future capital-raising activities and improve ongoing client relationships.

For fund administrators, integrating the front-end portal into back-end administration systems allows data entered by self-servicing investors to be captured in a consistent, formal manner. That minimises potential errors and the administrative effort involved in liaising with clients and keying in data.

Through online workflows, data and documents can be controlled and approved before being sent to the investment manager for subsequent release to end clients. Any required changes can be taken back a step in the workflow, completed and re-sent. And tracking all communications and amendments creates a robust, transparent audit trail.

Users – especially the younger generations – want to be empowered. Digital service delivery is creeping into all areas of life, from making a doctor’s appointment or restaurant reservation to listening to music, booking a flight or buying house insurance. People like the on-demand control, autonomy and effort reduction that a rich, easy-to-use digital service provides. Investment management is no different. And the trend is not going away.