Senior executives in the asset and wealth management sector have become stuck in their digital transformation strategies.
These executives view digital transformation and creating seamless digital experiences for clients and customers as purely hygiene exercises; unlikely to deliver transformative commercial gains.
This is according to the latest research from the digital transformation and marketing agency Paragon DCX which above all, reveals how the sector is struggling to prioritise digital transformation with financial performance still seen as the main differentiator in the market.
A strong majority of respondents recognised how the sector, including their own organisation, remains behind the curve in terms of the digital maturity required to instigate transformation.
However, this is not due to the board’s failure to recognise the importance or benefits of the process, but rather that many felt that their strategies have become stuck.
Amid the continuing economic instability, members of the c-suite see delivering returns to investors as their top priority, while middle management is both less focused on digital and highly risk averse.
Going against the grain
Speaking on the findings, Andy Farmer, chief strategy officer at Paragon DCX, confirms that the asset and wealth management sector has “always been a sector based on personal relationships.”
“The difference now is that firms have to start and maintain those personal relationships in the digital space,” continues Farmer. “Yet, it appears that most asset and wealth management firms are still at the stage of digitising their existing processes, rather than trying to transform themselves for the digital world.”
Farmer admits his concern that a lack of focus from the top on improving the digital experience is all it would take to jeopardise an organisation operating in the current climate.
“With an increasingly digitally-savvy customer base, who have expectations of a retail-like experience from all brands, firms in the asset and wealth management sector risk losing market share and missing out on new clients and customers; all of which could damage financial performance in the long run,” he confirms.
Falling behind
The report also identifies a number of other barriers facing asset and wealth management companies in their digital journey, including regulatory and compliance issues, siloed data, success measurement and being able to convince senior management.
It concludes with a number of recommendations for asset and wealth management businesses trying to increase their digital maturity.
These findings are in stark contrast to those of other industries, where digital transformation and a focus on digital experience as a differentiator has become paramount to customer happiness and business survival.
Research conducted by McKinsey in 2021 showed 71 per cent of consumers expect personalisation and 76 per cent get frustrated when they do not find it. Likewise, Gartner‘s 2022 report confirmed this by finding that the main reason organisations pursue digital initiatives is to enhance the customer experience.
