Wealth management firms and financial advisers are adjusting to the fast pace of change as they seek to build business during the coronavirus pandemic, which has accelerated trends in cloud adoption, digital channels and analytics, panelists said during SIFMA’s virtual 2020 Annual Meeting on Monday.
Advisers and customers need choice with regard to channels for communication amid the pandemic, said Mike Boese, CEO of Hearsay Systems. Compliant texting is a channel that has seen a particularly sharp increase in usage since the pandemic, as its response time is less than five minutes in more than 50% of cases, he said.
Advisers have had to “rewrite the playbook” on attracting and retaining clients, who are seeking “deeper dialogue” and a human perspective on complex issues, Boese said. Potential clients will be searching online for advisers, who need to have robust, compliant LinkedIn profiles and provide valuable insight, and channels such as text, email, phone and video will play a greater role in engagement as advisers and prospects advance to one-to-one communication, he said.
As advisers are asked to increase their outreach through a variety of channels, wealth management firms should help ensure their success with digital channels by prescribing outreach methods that are authentic and scalable, Boese said.
With regard to analytics, firms need to do an inventory of all models available and consider how they might need to adjust their models in light of the current environment, said Scott Zoldi, chief analytics officer at FICO. The focus should be not just on whether models are built appropriately, but also on monitoring the models for signs that changes are necessary, he said.
Firms were already working toward harnessing new data sources and the cloud and automating decisions before the pandemic, but the challenge that has since emerged is whether they can trust their models moving forward, and they are working to improve their understanding of the models as well as their customers, Zoldi said.
Companies are increasingly willing to seek managed services and outsource mission-critical activities to trusted partners, a shift that is occurring as firms focus on what differentiates them, said Martin Boyd, president of capital market solutions at FIS. Their goal is to deploy capital in the most effective way by reacting quickly in responding to clients and introducing products rather than managing the cloud, Boyd said.
As the cloud adoption trend has gained speed amid the pandemic, “the ability to go back and model at scale on demand … gives you a tremendous amount of flexibility from a risk management perspective” in light of all the major changes occurring, said John Kain, head of banking and capital markets at AWS Financial Services.
Boyd also noted that remote work creates cost-saving opportunities and additional risk for companies, creating a need for a control framework that addresses a more dispersed workforce.