Data analytics, cloud, mobile and social media will become utility technologies for investment firms by 2022, according to a new report from Roubini ThoughtLab.
From April to June, the Roubini ThoughtLab team — which was co-founded in 2015 by noted economist Nouriel Roubini — surveyed a spectrum of 1,503 investment providers from around the world and conducted 42 in-depth interviews with senior executives from financial institutions, consultancies and technology firms.
"By 2022, it will become the norm for wealth and asset management firms to engage digitally with their customers, who will look to the internet and social media for information on investments," the report states. "Although offline communication — like phone calls and face-to-face meetings — will continue to be important for investors, communication through smartphones, telepresence, webinars and online chats will rise dramatically."
According to the report, the starting point for a digital-first customer experience is simplified digital client onboarding. The Roubini ThoughtLab team finds that 39% of firms are already offering digital client onboarding to retail customers, and 48% to institutional clients.
By 2022, the use of online methods will rise as offline methods decline, according to the report.
According to Roubini ThoughtLab's research, by 2022, 69% of investment providers will be offering digitally enabled client onboarding. More specifically, about 75% of firms servicing institutional clients will use digital client onboarding vs. 63% of those servicing the retail market.
The report finds that about 74% of full-service banks and alternative investment firms will offer digital onboarding by 2022, followed by 73% of mutual fund companies and 72% of retail banks.
"With firms like Amazon, Apple and Netflix revolutionizing the customer experience, investment providers will need to reframe their customer interactions for a digital-first world," the report states. "Communication through digital channels will predominate in wealth and asset management, as firms harness technology to reach clients and power most investment activities. Adapting the channel mix, providing 24/7 digital access, and leveraging analytics will be vital for creating a seamless investor experience that people now expect."
According to the report, an "agile" cloud-based system provides the groundwork for digital leadership.
More than half (53%) of providers surveyed plan to use a cloud platform to replace their legacy systems, particularly alternative investment firms (61%), full-service institutions (58%), fintechs (56%), family offices (56%) and digital leaders (59%).
According to the survey, moving to the cloud will help investment providers support customer centricity, reduce operating costs, accelerate time to market, and facilitate agile innovation.
However, the report also points out that shifting to the cloud will take time.
