Customer experience in wealth management

In a recent circular (Selling of Investment Products to Private Banking Customer, 12 June 2012) to the chief executives of financial institutions in Hong Kong, the Hong Kong Monetary Authority (HKMA) clarified some of the issues raised by the Hong Kong private banking community about the "compliance and regulatory" requirements related to the selling of investment products to high net worth individuals. Similarly, the Monetary Authority of Singapore (MAS) (26 Mar 2012, "Role of Life Insurance and Financial Advisory Services" by Managing Director, Ravi Menon), highlighted the importance of "placing the customer first".

These two recent announcements highlighted the increasing regulatory pressures placed on Asia's wealth managers to raise the standards of the advisory processes when servicing their wealthy clients. Given these challenges, the paradox of a customer experience goes against the notion that clients' needs are different and require tailored solution and services.

Customer experience does not solely lies on the final product or service that the client receives. The consistent effective delivery of a product/service to the client is the essence of customer experience. The development of a customer experience strategy needs to take into account the following.

Vision
1)  Having a clear vision and mission
Customer experience is a process of how an organization should consistently deliver a quality product/service to the client. Starbucks and Amazon are two great examples how customer experiences are delivered to the customer consistently. The products may be different across different region/countries, but the process in which the client request and receipt of the final product and service is very much consistent and predictable.

Wealth managers must have a clear vision and mission about what customer experience meant for them. One wealth manager that I know defines customer experience as a consistent and predictable advisory process where clients, regardless of which branch they visit or which RM they meet , will receive a consistent service that results in a product or service that is aligned with their risk profile and wealth planning needs.
 
2) Articulating a clear vision across the organization
Executing a successful customer experience strategy requires a clear understanding across the verticals and horizontals of the organization. Executing a customer experience strategy is not limited to those who meet or service the customers only. The middle and back office organizations are required to align with the front-office. For example, for sales team which service wealthy families and individuals, servicing requirements can be different. Understanding these differences and its impact reinforce the consistency of product and service delivery.

Channels and Technology

3) Aligning the channels strategies
Relationship manager is not the only channel that client interacts with the institution. Identifying the channels (such as internet, branch and helpdesk) and aligning their corresponding strategies with the customer experience strategy are critical for a successful implementation.

4) Impact of new technologies

The use of social media and the rapid adaptation of smartphones and tablets by RMs need to be further researched and understood to support the delivery of a consistent customer experience. The use of tablets and electronic forms to obtain clients signatories and provide online submission without handling multitude of physical forms for investments/compliance reasons serve to create a unique customer experience whilst enhancing efficiency and service standards.

Business Processes

5) Business Process Redesign
Any customer experience implementation cannot go without a review of existing business processes across the organization. However, any business process redesign should not focus on just efficiency alone. The use of LEAN or Six Sigma tools should not be used as a standalone methodology to execute a customer experience strategy. In addition to efficiency, wealth managers must take into account of the following during the redesign:

a) Customer Life Cycle
At every stage of a customer life cycle, such as prospect, a new customer, active customer and an exiting customer, customer experience must be embedded in the respective business areas and processes. This includes areas like client on-boarding, needs analysis, investment proposal/execution/review, wealth planning, just to name a few.

b) Customer Segmentation
Customer segmentation in the wealth management is critical to maximize profitability, raise ROA (Return on Assets) and efficiency. However, it is critical to apply a consistent business processes across the different customer segments even though individual tasks/activities can be variant.

c) Regulatory/Compliance
Wealth managers must continue to address the issues of risk profiling, client and investment suitabilities, KYC and AML. It is critical that these issues are addressed and incorporated into the business processes. Regulatory and compliance should not be isolated and treated as separate areas outside the scope of customer experience.

At the end of the day, executing a customer experience strategy is the beginning of a customer experience journey where the organization truly places the customer at the heart of the organization.