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Mark Harrison
Chief Technology Officer, Killik & Co
Digital is now expanding beyond basic portals and apps. It is becoming an integral part of client communication, marketing, and the overall client experience. Digital marketing, in particular, is a growing area.
What are the main influencing factors driving this huge increase in spending in the sector?
There are three main factors driving this increase in spending. Firstly, we are now transitioning from digital 1.0 to digital 2.0. The technology that was implemented a few years ago needs to be refreshed and supported. This includes rewriting apps and allocating more resources for maintenance. Secondly, digital is now expanding beyond basic portals and apps. It is becoming an integral part of client communication, marketing, and the overall client experience. Digital marketing, in particular, is a growing area. Lastly, organisations are realising that having a front-end digital interface alone does not necessarily lead to significant efficiencies. To achieve efficiencies, integration with back-end systems, such as CRM, is crucial.
How do you see client behaviours changing in the wealth management market? And how do you anticipate this evolving in the next few years?
Clients now expect digital capabilities as a basic hygiene factor. They want easy access to their valuations and basic account information. However, the focus is shifting from data access to accessing individuals. Clients want access to research, information, and personalised advice. They are seeking updates on government changes, industry trends, and cyber protection. These aspects fall within the realm of digital marketing, which is less mature compared to basic digital portals and apps. In the next few years, I believe we will see an increased emphasis on personalised interactions and providing valuable insights to clients.
Wealth management clients are placing greater importance on digital access in their decision-making process, and many firms believe digital channels will be the primary engagement channel in the near future. What are your thoughts on these findings?
While digital access is important for decision-making, it may vary depending on the complexity of the decision and the client's wealth profile. Investment decision-making and discussions on risk attitudes still require a human connection. Clients expect personalised advice and a trusted individual they can consult with. However, processes such as onboarding and basic fact-finding can be done digitally. The key is to strike a balance between digital convenience and maintaining the essential human touch.
There is a growing trend of clients seeking a single institution to meet their financial needs, including banking and wealth management. How can organisations capitalise on this opportunity?
While there may be a demand for banking services within wealth management, I believe the one-size-fits-all approach may not be suitable for all clients. Trust is a significant factor in wealth management, and clients may not view banks as appropriate entities for their investments. However, offering basic banking services like payments, mortgages, and loans can complement the wealth management proposition. It's important to maintain a distinction between relationship managers specialising in investments and those focused on cross-selling other banking products. Finding the right balance and understanding clients' needs is crucial to capitalise on this opportunity.
How do you quantify the competitive threat from fintechs, and what can established organisations do to mitigate this risk?
Fintech companies are indeed a significant competitive threat, particularly in the mass market self-service sector. They offer convenience and cost reduction through automation. However, as wealth increases, clients often seek personal relationships and human guidance for more complex investment decisions. Established organisations have the advantage of long-standing relationships with clients, built on trust and expertise. They should leverage these strengths by combining digital capabilities with personalised advice and tailored solutions. The human touch is still highly valued in wealth management, and it is something fintech companies struggle to replicate.
The human touch is still highly valued in wealth management, and it is something fintech companies struggle to replicate.
It's important to balance data-driven approaches with the trust-based nature of wealth management.
Data and analytics play a crucial role in the digital transformation of wealth management. How do you see the use of data-driven approaches evolving in the industry, and what challenges do you anticipate?
Data and analytics are indeed essential for personalised interactions and targeted communication with clients. As the industry evolves, we will see more sophisticated use of data to offer customised recommendations and insights. However, it's important to balance data-driven approaches with the trust-based nature of wealth management. Clients need to feel that their data is being used responsibly and that their interests are being prioritised. Striking the right balance between automation and personal relationships will be a challenge, but it is necessary to maintain trust and meet the evolving demands of clients.
What are the key challenges that small and medium-sized wealth managers face when it comes to incorporating technology into their operations?
I think the main challenge is the level of immaturity of these wealth managers in relationship to technology management. Many of them struggle to understand the wider proposition and tend to conflate technology with overall change and transformation. Supplier management with third parties is also crucial, as they need to ensure they have the right relationships in place. Additionally, the testing process for APIs can be time-consuming due to different data structures and use cases, which can pose further challenges.
About Killik & Co
Killik & Co is a reputable London investment company providing personalised wealth management services since 1989. Our experienced team offers tailored investment strategies across asset classes, empowering clients to achieve their financial goals with transparency and excellence. As an independent firm, we prioritise client-centricity and deliver comprehensive financial solutions.
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