Philipp Ringgenberg, Head Business Innovation & Verticals, Europe – Orange Business Services
Digital transformation is the goal of just about every company in the financial services sector but many are frustrated by the lack of speed with which they are able to reach their goals.
In fact, for many, they see the increased reliance on technology as part of the problem. Contact centres are calling for better integration with social media and web call-back management. Meanwhile, increasing cyberthreats create the need for better scam and fraud protection and prediction, and more connected IoT touchpoints create the need for better ways to analyse data.
However, making use of services provided by and integrated out of the cloud can be a huge advantage in both accelerating the digitisation process and launching services that create a better experience for customers and the business. It’s a vital part of creating an enhanced offering that caters to increasingly mobile-first and mobile native customers. Making use of the cloud also helps introduce new innovative ways to add value to existing products, gain trust among a customer base that is becoming more disloyal, and attract the very best talent to work for the business.
For wealth management in particular, there’s a unique set of challenges they have to face. Firstly, in Asia, there’s the growing middle class that is outpacing supply in terms of services. According to research from the Brookings Institution, 88% of all new middle-class people in the next five years will be in Asia. Currently, there aren’t enough relationship managers with the adequate skills in Asia to service this growing market. Meanwhile, in Europe, financial institutions are facing huge cost pressure and need to be able to do more with their current staff resource in order to service customers better.
In both of these situations, automation is a must. Completely automated wealth management platforms and remote maintenance make the solutions more cost effective. That matters because it meets the demand in Europe for a comprehensive service that avoids service providers having to price themselves out of the market. It also scales well, particularly when delivered in the cloud, to enable the booming middle classes to access wealth management services as well. Automated digital wealth management solutions with robo advisors have the potential to enhance traditional services and offer more than they offer today.
This isn’t the end of the advantages of automation. If the financial services industry wants to reach their digital transformation goals, they also have to reach out to a wider customer base that wants to interact digitally. That means branching out from just offering services to the rich. When wealth management services become automated and cheaper, they also become more accessible. That means the services are more open to more people than ever using digital platforms. Suddenly, the mass market becomes a viable option.
Orange Business Services recently teamed up with Additiv, an expert in digital solutions for the financial market to offer wealth management as a service. It’s unique in the fact that it is cloud based and on-shore (in country). This disrupts the automatisation of wealth management. It creates wealth management as a service and contains out-of-the-box solutions, such as robo advisors, investment cockpits, client and advisory dashboards and portfolio management solutions.
This is more than just good news for Orange, Additv, wealth management companies and their customers. It signals a turning point that showcases the direction of travel for the future of the industry. Already we know that businesses want to move their operations to the cloud but keep the data in the country of origin. This solution does this. But also, this shift represents something that is happening in more places than just wealth management firms.
I see the future looking like this. Banks will want to move to pure play digital services sooner than later. The problem is legacy infrastructure is very complex and doesn’t transition quickly into providing digital services. Institutes will therefore use a hybrid model where they offer digital mobile-first services alongside their established banking service so that they can cater to all user types without going headfirst into becoming a bank that has to ditch its existing infrastructure.
I also see changes taking place in insurance where companies will digitise their portfolio and look for new ways to engage proactively with their customers in a personalised manner. For example, customised travel insurance will be offered to customers on their mobile device once it has detected they are in a different country. Or another example: Insurance fraud protection will be automated by comparing the data track with geo-location and timelines of the submitted case. We are already having active discussion about this.
All this boils down to the fact that driven by customer demand, digital services are becoming the new normal. To keep pace, companies must have the infrastructure in place that reflects the growing appetite of today’s consumers. But that doesn’t necessarily mean physical infrastructure. The end goal should be to prioritise services not hardware. Orange Business Services has its own co-innovation programme where we drive with our customers to help them stand out from their competitors by leveraging our global capabilities.
Certainly, by integrating and moving to the cloud, you’ll be able to make your existing services more cost effective and easier to deliver and maintain. But more than that, there’s a new school of innovation where standout products win over indecisive customers. Getting the fundamentals right is key but going the extra mile is where growth resides.