Financial Services Technology Trends 2019
An article titled “Facing the Future” was recently published in Asset Servicing Times regarding financial services industry trends, challenges and opportunities for 2019.
In this article, industry participants answered questions about trends for 2019 and we found some of the answers to be very insightful and on point. Given that Liveoak specializes in bringing digital transformation and efficiencies to the financial services industry, particularly as it relates to virtual interactions, we decided to jump into the conversation where applicable.
What will be the biggest trends in the asset servicing world for the year ahead?
David White: “We’ve found that asset servicers are increasingly looking to move away from inbuilt systems which can be costly to maintain and can struggle to keep pace with regulatory developments. Instead, they are more open to engaging with specialist vendors and tend to favor web-based solutions over installed software—a trend we expect to continue well into next year and beyond as clients look to cut costs and keep pace with market best practice.”
Liveoak: This trend is definitely happening today in the financial services industry. It is important for web-based (SaaS) software providers to not only run in parallel to existing (legacy) IT infrastructures but also meet industry security, compliance and operational controls. It is very possible for web-based software providers to engage at this level.
Kevin O’Neill: “I think the industry will see an improvement in the client experience and improvement in productivity through digital transformation”
Liveoak: Yes, this is our sweet spot here at Liveoak – improving customer experience through the use of digital technology and workflows specifically designed for regulated industries that have complex, multi-step customer interactions.
“Client onboarding is typically manual and bureaucratic, including lots of duplication of information request to investors. This makes the onboarding and offboarding experience a challenge when working with investors and funds.”
Liveoak: This has been the case with most complex use cases not only in financial services but banking, insurance and other regulated industries such as automotive. Up until now, when customer information needs to be gathered, paperwork needs to be completed and supplemental information needs to be collected (such as bank statements, utility bills and other proof of residence/identity), the process has been manual and generally very time consuming for all involved.
“As the market becomes increasingly competitive, the need to streamline and reduce the time it takes to onboard new clients has never been more pertinent. This will be the year when the sector is challenged to digitalise the entire customer journey end-to-end.”
Liveoak: True. Although we have been working since 2015 with financial services enterprises on creating and improving digital customer experiences (and workflows), we can feel the increased focus and are seeing an uptick in demand in financial services and other regulated industries.
“Centralising data to achieve a single-client view and digitising the account opening process will not only improve the client experience for faster onboarding and opportunities for revenue, but huge efficiencies will also be gained from a productivity perspective. This will give asset managers the freedom to re-allocate employees to more value-added tasks within the business.”
Liveoak: Yes – with digital transformation, there are many efficiencies realized and increased productivity does allow employees to re-allocate their time which is a great thing. We are also seeing results with speed- paperwork is processed faster, digital submissions (applications, new customer paperwork, contracts etc.) are increasing and there are fewer errors and omissions (less NIGO).
What developments do you think we will see in the technology space?
O’Neill: “Digitising the client lifecycle should become top of the agenda for asset managers this year. In reality, the opening of accounts is still a costly, error-prone, labourious and ‘dated’ experience. Fragmented systems, housing several unconnected repositories of data and documentation, mean that asset managers find themselves repeatedly asking investors to submit and resubmit data and documentation required to support the account opening or new product onboarding process.”
Liveoak: Yes, creating digital workflows around account opening is one of our top use cases. The account opening process can be cumbersome due to a high level of complexity, compliance and regulatory requirements. With the right workflows in place, the redundant and repetitive requests for information can be eliminated and the entire customer process can be accomplished virtually (digitally) in minutes vs. weeks. The net-net is that the customer interaction is faster, the costs are less, there are fewer errors and companies are perceived as being technology forward.
“Most of this data capture is manual, involving paper-based questionnaires—even for existing clients who may be switching or adding new products. This can become a very tedious, lengthy and exacerbated process for clients, and may result in abandonment altogether.”
Liveoak: True! When we engage with financial services enterprises, we walk through their existing workflows from onboarding a new account to product add-ons to account maintenance. In some cases, the process has been the same for years (even decades) and it is an extremely tedious and cumbersome experience for the advisor, staff and client. Using technology to reinvent workflows and improve the customer/advisor experience makes a big impact on all parties involved.
“A recent McKinsey report outlined how one asset manager described how almost 300 people were being copied on emails during the onboarding process due to a lack of accountability. Clients are demanding more and more digital capability and experiences from their financial institutions; however, many are seriously underperforming in making this a reality.
According to McKinsey, asset managers that are leading in digital transformation onboard new clients 62 percent faster and 75 percent less in cost compared to the industry average. This is proof that while achieving digital transformation is a long-term endeavour, those already on the path are reaping the benefits.”
Liveoak: The data found in the McKinsey report seems unbelievable regarding the number of people being copied on emails but in the case of large enterprises, it is often true. We help our customers overcome this type of inefficiency by creating a unique System-of-Audit™ which is a complete record of all customer’s actions, data, files, video and photos provided during each virtual customer interaction. This digital activity log is attached to the client’s record and is available as a reference at any time.
McKinsey says that digital transformation helps clients onboard customer 62% faster with 75% less cost is in the range with the type of results our clients are experiencing. O’Neil mentions that achieving digital transformation is a long-term endeavor. For the record – with our own clients who are some of the largest financial services enterprises, banks and insurance companies in the world, progress can be made sooner than long-term.
- For your reference, the original article can be found at: http://www.assetservicingtimes.com/editorspicks/editorspicks.php?editors_picks_id=191