The world is clearly migrating to the digital realm as an increasing number of people leverage technology and digital tools to meet their social and consumption needs. The current COVID-19 pandemic that has swept over the world is giving a further fillip to this migration as it puts restrictions on physical mobility and impedes the ability of people to interact in-person.
The financial services industry was already adopting digital solutions in an effort to improve investor experience. Financial planners and distributors no longer need to visit the client physically to fill out the physical forms, collect and deposit the cheques, provide the client with a physical portfolio performance report etc. Most MFDs have adopted technology to ensure that transactions can now be done digitally and seamlessly in a secure environment. For example, previously, SIP applications had to be filled out individually for every SIP and the new bank mandate/ECS/standing instructions had to be registered every time an SIP was started. However, this can now simply be done digitally using one time NACH mandate / E-Mandate. MFDs are also leveraging multiple channels to interact with the client and ensure that they are available as per the requirements of the clients. In addition to physical meetings (which are not possible in the current environment) advisors are also scheduling interactions over Skype, Zoom or even WhatsApp calls.
Some of the ways by which the industry has adopted technology are discussed below.
Automation of back-end processes: Most transactions can now be done online without the need to fill physical forms. In addition to online transactions, clients can also get a consolidated view of their investments and generate reports, get alerts on the expiry of an SIP, purchase insurance etc. This has ensured that clients get instant access in a transparent and seamless manner.
Client acquisition, on-boarding and servicing: Technology is now allowing advisors to reach out to and interact with current and prospective clients that might be spread across different geographies and time zones. Advisors are using digital tools to track the advice being given to clients and keeping updated with the latest developments in the financial markets. They are not only providing advice digitally but also ensuring that they are available to their customers with the relevant information at all times.
Regulatory compliances: MFDs are also increasingly leveraging technology to ensure compliance with the latest regulatory frameworks. Further, digital tools are also being used to ensure compliance with client’s mandates and risk tolerance to ensure optimal advisory and service delivery.
Use of artificial intelligence (AI) & machine learning (ML): Newer technologies like AI and ML can be instrumental in understanding client needs better and helping advisors provide their customers with more customised solutions. Advisors are further leveraging these technologies to improve their core advisory process like asset allocation models, product research and recommendations, scenario analysis, financial planning etc.
Empowering the client through transparent and seamless processes: Digital tools are increasingly being used by advisors to deliver a transparent and seamless experience to their clients. Today, clients can use different channels like a simple app or a web log-in to instantly access his portfolio, transact or request for information. This way, the client not only knows everything that is going on in his portfolio but also has the power to control the same. This increases trust in the advisor and contributes to building a long-term relationship.
Client education: Today, financial advisors are interacting with clients in a consistent and disciplined manner and constantly adding to the clients’ information and knowledge pool. Advisors are reaching out to educate their clients through regular webinars, blogs and podcasts to ensure that the client can make informed investment decisions.
Times are changing, and most advisors have been quick to change with the times. For investors, the foresight that advisors have shown in adapting to the new digital paradigm can be very valuable.
