Mash Patel: Covid-19 crisis exposes investment sector’s tech deficiencies

History may remember the pandemic as the catalyst for profound changes in working practices in investment


As the world struggles to contend with the rapid spread of the Covid-19 strain of the coronavirus, never has the flow of information been so important. With new containment measures rolled out daily and markets whipsawing, clients are desperately turning to their investment advisers for intelligence and reassurance.

Many wealth and asset managers are, however, ill-equipped to provide the up-to-date information clients require. As a result, clients are filling the information gap elsewhere – detaching them from the very place they need to be in these times of uncertainty.

While the worldwide web has been around for many years now, not all industries have truly embraced it and incorporated the internet into the heart of how they do business and communicate. Consumer goods companies quickly realised the value of an online marketplace, as well as the power of targeted and personalised advertising. The investment industry, though, still relies heavily on face-to-face and over-the-phone interactions.

The Covid-19 crisis is shedding light on deficiencies in the way investment professionals communicate with clients. As an example, the latest Kurtosys Asset Management Digital Marketing Survey showed more than two-fifths (44%) of investment groups still have no documented digital strategy, with almost nine out of 10 (87%) reporting only a basic level of digital marketing and even lower levels of digitalisation within sales and distribution functions.

The new norm

Remote working and virtual meetings may become the new norm, however, permanently changing how the industry thinks about sales and client relationship management. Perhaps history will remember the pandemic as the catalyst for profound changes in working practices. Until now, the investment sector has clearly been slow to adapt to the online age – with the relative success of online-only investment platform start-ups attributed to the millennial generation’s preference for app-based services.

These start-ups, pioneered by firms such as Nutmeg and adopted by the likes of Vanguard, have caught the attention of more traditional businesses and, while their success remains to be determined, they have opened the industry’s eyes to the art of the possible.

It is, however, a misconception that these online activities are the preserve of younger generations and retail-only clienteles. The internet is so ubiquitous it now forms an integral part of daily working life – something traditional asset and wealth managers are only beginning to realise. In fact, the highest returns from a defined digital strategy will come from targeting institutional client segments – where asset under management are more sizeable and sticky.

The current crisis is an opportunity for the investment industry to improve communication and eventually become an information reference point for clients – effectively becoming a part of everyday life. By weaving brand messaging into regular streams of information, companies can also create powerful brand identification. Moreover, by learning from user reactions to online content, companies can quickly adjust and create more effective campaigns that are deeply integrated into the customer relationship model.

Choosing the right technology

Launching new content, campaigns and solutions has traditionally been a laborious process, with significant interaction between departments and a heavy reliance on external tech development. Yet innovation in software now allows for new sites and products to be launched without the need to write complex code.

This means sales and marketing teams can now adapt website pages and documents without having to rely on an external development team. This greatly increases the ability to execute campaigns and focus on building brand presence. Crucially, in these testing times, this will enable quicker, more agile communication with clients to keep them abreast of fast-moving developments.

Cloud-based platforms allow information to be seamlessly shared, with updates made in one central location, which is then automatically pushed through to the relevant platforms. Not only does this save time, it ensures consistency across marketing, sales, distribution and client services.

This unites the pre and post-sales experience and creates a hub for customers. Digital platforms can also provide deep buyer analytics, which can be used to personalise marketing efforts and deliver a better customer experience.

Operational continuity

Moreover, with investment professionals now working from home, a reliable, secure, cloud-based website and communications platform – available anywhere, any time – is key to ensuring operational continuity. Platforms – already essential to driving sales and improving user experiences – will play an even more important role in maintaining levels of service over the next few months.

In this challenging environment, asset managers will look to reduce costs wherever possible. By empowering employees to create and manage websites and communications remotely, cloud-based platforms can allow companies to continue driving efficiency and business growth with minimal disruption from the safety of working from home.

To become digital leaders, however, asset and wealth managers need to do more than just buy technology. There is a need to focus on talent and change management, as well as embrace data and analytics tools. In addition to recruiting tech-savvy talent, groups must enable portfolio managers and sales teams to utilise new data tools and metrics.

Ultimately, investing in technology can help investment managers cut costs, improve asset retention and attract new business. By choosing the right digital platform, companies can concentrate on honing a compelling narrative to capture the imagination of clients. The companies fully embracing the new digital age are likely to be best placed to emerge successfully from the current crisis and become leaders in this consolidating industry.

Mash Patel is CEO of Kurtosys Systems


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