In his latest guest blog for Xpedition Wealth Management, Dennis Harhalakis of Gulland Padfield explains why thinking in purely ‘digital’ and ‘non-digital’ terms is the wrong way to think about digitisation in Wealth Management.
‘Technology underpins everything we do in Banking and, while the industry prides itself on being relationship based, there is nothing to say that this relationship is limited to being between two individuals.
Wealth Managers have been working hard for many years to institutionalise clients, and Amazon has shown how to create exceptional loyalty with almost no direct human interaction at all.
For Wealth Managers, in the same way that there is no perfect end-to-end system, there is also no one-size fits all business model. This is because the industry contains a diverse set of client groups, a wide array of products, and evolving technology and service landscapes.
As the rise and fall of the Universal Bank has shown, changes in business model efficacy and regulation can be sudden and brutal. With the entry of Robo-advice, there has been a focus on dividing activities into digital vs non-digital.
But this compartmentalisation is not helpful, and it’s more insightful to think of activities, products and services being produced and delivered on a scale that stretches from digitally led, through digitally assisted, to non-digital. This approach recognises that clients will also need to be classified on the same scale and, most crucially, will have different digital expectations for different products.
The creates a framework where you compare client vs product vs level of digital delivery. Not all services can be delivered digitally and not all clients want everything delivered digitally; but digitisation in wealth management is at the heart of scaleability and user experience. So it’s crucial to understand where there are gaps and mismatches.
This framework can be overlaid with cost and pricing metrics to build a digital heat map showing product and service profitability.
The example above shows pricing and digitisation as ranges. Activities are shaded grey to indicate that the pricing scale is not applicable.’
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