Asset Managers – how good is your customer experience?

In a competitive market, CX should be a key differentiator

Guest expert Mike Wells from the Davies Group writes:

As organisations and customers embrace new ways of living and working, they increasingly expect an intuitive, real-time, on-demand, data-driven digital experience.  Keeping up with the speed and complexity of transformation required to provide great customer experiences, while delivering business value, is ever more challenging.

Having a robust CX strategy is critical. Here’s why.

Customer experience or CX, is more than just customer service excellence.  It is everything and everyone a customer touches, hears, sees, and talks to from your organisation and the perception that it creates. As an asset manager, CX goes beyond your distribution and service team to the portfolio managers who engage with customers as well as the non-customer facing teams. And it requires a consistent approach across all your customer types – institutional, wholesale and retail, spanning the distribution value chain, and across all the intermediaries – platforms, IFAs, wealth managers, investment consultants – that engage with your customers. In fact, in many industry sectors, not least banking and retail, CX is recognised as #1 driver of business and digital transformation and increasingly as the top strategic measurement for organisational performance.

Sionic’s research shows that when Asset Managers were asked – what are the development drivers for improving customer reporting in the short to medium term? The top three drivers selected were: understanding and improving the customer experience, at 80%; improving efficiency and reducing operational costs, at 63% and responding to regulatory demands, at 51%.

Little wonder that in the highly competitive and increasingly regulated asset management industry, good product and performance at a competitive price are a given.  Customer experience is becoming the key differentiator both in gaining assets, onboarding, and crucially customer retention. Asset managers who have transformed their business and made customer experience part of their firm’s DNA are, like other sectors, seeing an improvement in customer loyalty, employee engagement and commercial performance.

You may think “Sure but this is nothing new. We’ve served customers for years without having a strategy.” But times have changed, and expectations have rapidly evolved. Most asset management firms will have a financial, marketing, and technology strategy. All need a consistent, tangible strategy for managing their CX, the very thing that defines how they interact with their customer – institutional or individual investors – whose business enables the organisation to exist and grow.

A clear case for CX

CX is not a nice to have or optional add-on; it’s a core business discipline and set of competencies that impact every aspect of your customer lifecycle, from attraction and onboarding through ongoing servicing and retention. Its sound business modelling which needs to be developed and managed via measurable business frameworks to become a value-based mechanism for change with clear ROI attachment.

A deliberate and designed customer experience impacts profitable outcomes in two ways: increased revenue retention protects gross profits, and minimising end-to-end complexity manages costs and defends net profits. Purposefully designed CX will get you noticed and retain your customers’ confidence.

In general, asset management lags behind other sectors in CX, although some firms have already aligned their strategy and operating model to optimise the customer experience, and others are beginning their journey with the appointment of a Head of CX. Nevertheless overall, it is fair to say that the vast majority are behind. There are several reasons for this, including:

  • Organisational structure – vertical silos focused on operations, investments and distribution supporting the traditional asset management world of “pushing product” rather than solutions developed based on customer need
  • Technology & data – in parallel, challenging operating conditions, legacy based technology, data silos and skills shortages represent clear inhibitors for attaining true digital transformation to support seamless, frictionless experiences for customers. There is no single source of customer data or strategy that puts it at the heart of the organisation
  • Customer experience – customer engagement is often indirect via multiple layers of intermediaries. The asset manager often doesn’t know who the customer is, and may have little to no relationship with the organisation managing the customer relationship

To overcome these and other challenges, organisations need to develop cohesive CX strategies, including – as a minimum – a clear CX vision, service design principles, governance structures, employee engagement and Voice of the Customer insight frameworks, technology/digital intercept components and measurement / improvement elements.

Successful CX programmes provide a powerful business change mechanism

At best, organisations risk being caught out by the belief that CX evolution is the urgent and ongoing need to adopt new technologies, when in reality, it is the ability to adopt new business strategies and operationalise them in an accelerated adaptive approach, driven by a clear strategic direction. And at worst, the lack of a CX strategy could mean the loss of customer confidence and reduced revenue and market share opportunity.

An interconnected strategy that reaches all areas of the organisation will go a long way to bridging the gap between where an organisation thinks they are and what customers truly experience.

This is what we are seeing among disruptors: those organisations revolutionising customer engagement. They are focusing on more than just revising their processes, touchpoints, and communications; they are transforming their thinking and culture based around a clear CX ethos.

These leaders are displacing outdated ways of working and their associated inefficiencies whilst recognising and incorporating the value of traditional customer interactions. While service, fulfilment, and marketing processes are largely digital, human interaction is brought in at the point where it delivers most valuable.

Pausing to review, and evaluate the right approach is a good thing

Some introspection and well-considered action can take CX from a perceived digital-only strategy to a company-wide approach to customer engagement. The first step to developing a CX strategy is to evaluate the CX maturity and capabilities of your organisation today and identify what the required and appropriate target state ambition looks like with an initial view of the initiatives required to achieve it

Drive business value and positive disruption by adopting a deliberate & designed CX approach

Leading with a well-defined, enterprise wide integrated CX strategy, with clearly formulated execution across the organisation and clear leadership, will provide the foundation for a truly connected, effortless CX that will create value for your customers and business.

How can we help?

As specialists in Asset Management and part of the Davies Group, Sionic offers a range of CX services including CX strategy and maturity evaluation. To find out more, please contact us.

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I am a trusted advisor to the asset management industry specialising in operations and technology strategy, operating model design and implementation. I help firms make effective change so they are more efficient and effective.