Prowess at investor communications could be the difference between winning and losing business, our webinar – featuring fund managers and data professionals – hears.
As with almost every process and sector of the funds industry, the sales and marketing function faces stiff challenges in which technology could be a solution.
Digital tools have brought the potential to solve many of these challenges – such as the need to segment customers and to orchestrate micro-campaigns, and to produce actionable insights from distribution data. But the industry is only just embarking on this journey.
This was the main point made in the recent Funds Europe webinar, entitled ‘Transforming Investor Communications Across Borders’, which included Michaela Collet-Jackson, head of distribution Emea, at Columbia Threadneedle Investments, who said investor communications processes had changed hugely in recent years – a change that is going “full circle but on an upward spiral”.
“Right now, it is a delicate balance between human and digital processes. If you go back in time, that human element was a big part of the process. But as we go forward, it will be about leveraging the interplay between the digital and human experiences to maximise the impact of that investor engagement.
“The question we are trying to solve is how do we scale our humans and how, through digital technology, do we power them to be as effective as possible? We are just starting to embark on that journey, but it has become more important in our market because cost is a massive consideration,” said Collet-Jackson.
A need to stand out
It is also a more competitive marketplace with heightened expectations among investors. “The asset management market is a very crowded space today and there’s a clear need to stand out from the crowd,” said Joerg Grossmann, chief product officer at investment data platform FE fundinfo.
What I’ve seen is that asset managers that are not able to deliver the documents are no longer considered for fund selection
“At the same time, distributors are becoming more demanding. The increased complexity of doing business, from both a client and regulatory side, means that it is of the utmost importance that distributors get all data and documents on time, up to date and to the level of quality required, in a fully compliant way. What I’ve seen is that asset managers that are not able to deliver the documents are no longer considered for fund selection,” said Grossman.
Segmentation is the key to effective investor communications, according to Vincent Forestier, global head of retail, wholesale and institutional segments marketing at Axa Investment Managers. “It is really important to rely on human intelligence to understand what kind of segmentation you need to put in place to address a diverse audience.
“And you need to play the long game. Investor engagement is not an event, it’s a process and it can sometimes take years to establish. So, you need to think about dimensions when you put a strategy in place because time is going to validate who is relevant in terms of communications,” said Forestier.
Asset managers also need to be highly targeted in terms of getting relevant information to relevant clients, added Collet-Jackson, not least because clients already receive so much information. “That requires the segmentation to be really accurate. But that’s not easy to do, because people’s roles change, their interests change. It’s a very dynamic environment in which to operate.”
There is also the challenge of proving the effective results of a sales and marketing campaign. Forestier stated how internal research conducted at Axa IM showed that 50-70% of the firm’s assets under management had been impacted by a marketing campaign of some form.
Without technology, it is simply not possible to follow all the regulations, manage all the different data sets and actually distribute funds, said Grossman. Nor is it possible to pursue personalisation in a scalable and cost-effective context without technology, which has led to more focus on the use of AI.
“We use AI mostly internally, to run checks to improve the quality of our data and also to generate some actionable insights that can be used for product design and for indicating where future demand may be directed,” said Grossman.
The panel also discussed how to build a brand in the digital age and the challenges involved.
“Brand in the digital era has to be everywhere while staying relevant,” said Forestier. “More importantly, brands should create an emotion. And it is on us to ensure that branding is benefitting our key strategies and the product we want to sell. Digitalisation has given us lots of opportunities to be more relevant and more segmented and to do that in real-time.”
The next generation has a much healthier appreciation of the dangers of cyberspace and are more protective of their own data
Will brand be important to the next generation of investors? It’s often said that future generations will not focus solely on returns but also on the impact of their investments. But personalisation is dependent on consumers’ willingness to share their personal data and their investment preferences, and it is not clear how strong that willingness is. Digitally native generations were perceived as more willing to exchange personal data over the internet for transaction the want, but Collet-Jackson indicated this view might need revising.
“The next generation has a much healthier appreciation of the dangers of cyberspace and are more protective of their own data,” said Collet-Jackson.
Forestier, on the other hand, saw more polarised views among the next generation of investors when it comes to data. “Some will say they are not giving their data away. Others will view it as a commodity which can be sold. This generation is data-savvy – but I cannot tell which way it will go in terms of data-sharing. It will be very interesting to see.”
*To listen to the ‘Transforming Investor Communications Across Borders’, click here
