Asset managers and distributors, like other operators in the service industry, are in the business of creating a shared value in the relationships they establish with their customers and there is an increasing understanding of the role of digital technology as a means of achieving this.
A recent Econsultancy article reveals that “customer experience” is a priority for senior asset managers. Delivering a personalised, relevant experience is crucial. Many now routinely use digital technology for their marketing and it seems self-evident that the service experience should be aligned and consistent.
BACK TO FRONT
Transfer agency (TA) service providers are challenged to support the asset managers with wider product coverage, head-room for growth and good-quality service – all at a lower transactional cost. As such, the time when back-office operations were viewed as internal functional silos hidden from the end investor experience is long gone. An efficient and convenient customer interface at every stage, from dealing through to statements, is essential to the value proposition for the customer.
Designed properly, modern digital web technology can provide the flexibility to plug in multiple sources of data from sometimes fragmented operational systems via a ‘straight-through’ pipe. An upside for the administrator is that this enables self-servicing (at a significantly lower transactional cost).
There is a corresponding upside for the asset manager in terms of the capability to target specific marketing to a more demanding investor base. With the ability to provide portals and associated marketing content for each channel, asset managers can tailor access and marketing to align closely to the shape of their book.
The good news for investors is that when technology takes the load, charges are generally reduced. But while the lower cost on the service side resulting in a reduced price might appear like a simple ‘quid pro quo’ the reality is that genuine added value is created on both sides. For investors it’s in the form of increased convenience and control and for asset managers, it’s in the form of increased flows, interest and activity.
EMERGING BUSINESS MODELS
While all technology implementations must be carefully managed, digital software is now commonplace and the skills to do this well are readily available. If the portal is well designed, the convenience of online access, even for straightforward functions such as valuations and dealing, can re-energise investors and distributors alike. Assuming that the experience is professional and slick, then many of those thus re-engaged through self-service will go on to re-establish a strong relationship with the brand – especially where this can be done at a discounted price.
DIGITAL INNOVATION WILL CONTINUE
We already see impressive innovation in the market with several TA service providers achieving 90%-plus straight-through processing rates via the web. However, while the transformation of back-office operations via automation will surely continue, the signs are that this is just a beginning.
Other sectors are already taking advantage of web technology to transform customer experience and the TA industry has the same opportunity to strengthen their relationship with the investor by harnessing digital knowledge of individual experiences and preferences to more precisely target investor needs.
Digital technology has the capacity to truly transform relationships with investors through increased customer value. Those asset managers and TAs who use this to their advantage will surely reap the benefits.
Colin Wilson, head of client relationship management, Emea, at Bravura Solutions
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