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NEC Avaloq Roundtable Discusses The Vital Role of Technology in Addressing Customer Expectations for the Wealth Management Industry
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June 29, 2022 News

 

Written by: Khairul Haqeem, Journalist, AOPG.

Andrew Martin, Asia Online Publishing Group’s Group Publisher, began the NEC Avaloq Roundtable with a thought-provoking statement: “People’s expectations of customer experience have radically changed as a result of the pandemic.” As mentioned in hundreds of publications, the pandemic as a factor of accelerated transition in businesses today is the harsh reality that we must embrace. While the transformation is not surprising, like with opening Pandora’s Box, there is no turning back now, just onward.

According to statistics, customers are willing to pay more for any business that provides a better customer experience. What’s more, as we have seen on social media and e-commerce sites, a recommendation has become a very powerful instrument for bolstering one’s business. We came to the realisation that the higher the customer experience, the higher the recommendation. So, what exactly is customer experience?

Customer Experience Re-Defined

Customer experience is the overall impression your customers have of your brand throughout the buying cycle. It affects factors related to your bottom line, including revenue, as a result of their perception of your brand. However, the digital transformation of business has changed the way customers perceive their experience in the business. As Andrew explained, businesses used to have person-to-person engagement, which is no longer the case.

While automation has taken over a big portion of businesses, human variation plays an essential role in providing a first-rate consumer experience. While digitalisation of businesses is inevitable due to the scalability it enables, it would render personalised human interaction, the fundamental value of customer experience, ineffectual. You must listen to your customer.

One of the invited panellists, Gery Dachlan, Managing Director Avaloq South Asia & Australia, Avoloq, stated that “Customer experience does not directly translate to profitability.” Customer experience is, of course, quite significant during a company’s growth but how fast and efficient a customer service may be is often the case. Customers don’t always want a personalised experience; they just want to get their services done quickly and efficiently. Ultimately, customer experience and customer service are two sides of the same coin, both equally important and contributing to profitability.

The Great Wealth Shift

The impact of the pandemic’s two-year span has shaken the global economy. Russia’s invasion of  Ukraine has added fuel to the flames, plunging the world into economic turmoil. Supply networks have been interrupted, the energy crisis has worsened, and most governments have raised interest rates to battle inflation. Investors are re-evaluating their investments, shifting to less risky investments, and shrinking the size of their portfolios.

Despite this, Alvin Lee, Head of Group Wealth Management and Singapore Community Financial Services, Maybank, stated that “The overall wealth is likely to expand at a consistent rate to USD $280 trillion globally.  Furthermore, the world is witnessing a historic generational wealth shift. In the next two decades, approximately USD $60 trillion in assets will be transferred to Gen X and Millennials.” The next generation of investors is well-versed in technology and expects their investment to pay off in the near future. As a result, technology innovation and advancement are riding high today to meet the demand from new investors.

Technology and Wealth Management

Of course, technology has progressed and matured at a remarkable speed in recent years. It seems like only yesterday that we were learning about cloud computing and blockchain in their infancy. Today, many organisations have adopted cloud technology, and blockchain has been integrated into payments and even represents finance. Gone are the days when we would go to the bank and deposit X amount of money, then wait three days for it to be transferred to the other end. Today, you may transfer money online in a matter of seconds to anywhere in the world with minimal fees.

Of course, with the advancement of technology, data has never been more important. “Data is an aspect of wealth,” Alvin told us, “And clients expect you to use that information to create hyper-personalised customer service.” Many banks have begun to use first-party data to provide customised client service to some extent. And shortly, it will be an even greater experience.

Red Hat’s Arvind Swami, Director of Financial Services Asia Pacific, takes a different approach. According to him, it is critical to democratise technology so that it may be more broadly accepted by organisations. Going open-source is essential for implementing IT services at various levels of wealth management from the bottom up. The client experience can be fine-tuned for individuals by employing a fully customisable open-source platform.

The Digitalisation of Financial Institution

Malaysian financial institutions and banks are currently undertaking digital transformation and innovation in order to better serve their clients. According to Jefferi M. Hashim, Chief Executive Officer of CIMB Investment Bank Berhad, “Innovation for wealth management is more than just technology from a Malaysian perspective. An innovative mentality is required for Malaysian banks to invest in technology and compete with other financial institutions.” Malaysian banks are currently looking into innovating KYC and AML first in order to ease financial pressure and invest more in the digital landscape.

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As of today, a focus on the full digitalisation of Malaysian financial infrastructure will raise a number of challenges. Human elements are still necessary, despite the numerous limitations. Profitability is another concern. While AI and data management technology are crucial features today, for economic reasons, Malaysian banking facilities are prioritising other aspects of their services before progressing to the next stage.

In the end, what matters is balance. From customer experience vs. customer service to profitability vs. services, balancing is the correct strategy for elevating clients’ expectations in a changing digital market.

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