OPTIMISING THE BIG THREE - DATA MANAGEMENT, CLIENT EXPERIENCE AND COSTS

Wealth Management & Private Banking

Wealth Management & Private Banking

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Expert: Neil Smyth & Joey Cozens, Statpro

Facilitator: Seb Dovey

Key message 

The session addressed the necessity and complexity of data management transformation. While data management requires substantial resources, the value of data is still “uncertain” and not established in  the wealth industry yet. Attendees agreed that ultimately, the value of data is in client expectations - certain functionalities will be soon or already are regarded as a minimum standard rather than  a premium service. The challenge remains to navigate the conflicting priorities and gauge what data solutions are going to be most appealing to clients in the long run. 

Headlines 

  • The necessity to optimise banks’ legacy systems and increase the digital functionality for clients
  • The trade-off between costs and uncertainty around defining the real value of data for clients
  • The cyber security, outsourcing and data protection risks of data management
  • The lack of clear winners in data management and digital functionality providers in the market 

Key themes 

The session opened with a discussion on the necessity for the wealth management industry to optimise their data management. Attendees acknowledged that the industry has historically been slow in adapting new technologies and that the expectations of clients and regulator are the main catalysts of change. 

The session evolved around the question of how to define the value of data. While data management requires substantial resources, the value of data is “uncertain” and not established in the wealth industry yet. One attendee mentioned an example of a firm building a “data lake”. With tongue in cheek he added that “[the firm] has no clue what to do with this data, but can afford to burn the cash”. 

All attendees acknowledged that despite substantial costs, better data management is inevitable. Larger firms are often “victims of their own success” and are left with many legacy systems to transform and standardise. These legacy systems are holding together only thanks to “chewing gum, sello-tape and rubber band”. Many solutions are ad-hoc fixes lacking an overarching strategy. 

Third party experts from the data management industry suggested that banks should focus on their core competencies and outsource the rest to data providers. Better data solutions improve the client experience and also enable relationship managers to better serve their clients. Data firms reaffirmed that they are not only best situated to understand the complexities of optimising data, but also to address the risks of cyber security and data protection. 

One attendee pointed out that, contrary to popular belief, data theft is more likely to appear from  within rather than from outside of a company. Many relationship managers are protective of their clients’ data and often regard clients as “their” personal clients and not clients of the wealth management firm. This can be prevented when access to data is properly monitored, tracked and stored safely. 

Another attendee opposed this view and suggested that the harsh reality is that there is no way to completely protect data. The ultimate decision needs to lie with the clients - how comfortable they are with sharing their data. This will allow certain firms to differentiate their value propositions as an offering without “any digital bells and whistles”, but a high degree of data security and protection. 

The session closed with acknowledgement that “data is the oil of the industry” and the question for the businesses is how to set the ratio between human and technology interaction. Ultimately, the value of data is in client expectations - certain functionalities will be soon or already are regarded as a minimum standard rather than a premium service. The value of data is even broader. Eventually, it will allow the talent within organisations to focus on value added tasks and provide a better service to clients. In the meantime, the challenge is to navigate the conflicting priorities and gauge what data solutions are going to be most appealing to clients in the long run. 


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