How wealth managers can use data to keep focused on what really matters: Achieving digitisation success

Wealth managers will need a clear strategy for digitisation that reflects the client needs and channel preferences that their client personas have. Using your data strategy to focus on the key priorities will be critical to achieving success in the digitisation journey.

The investor landscape in wealth management is changing, with a new, younger generation of clients. Digital engagement has increased from 7 to 10 times, with the onset of the pandemic accelerating digitisation across wealth management organisations. To attract a wider spectrum of clients and keep pace with the new normal, wealth management organisations will need to enhance their multi-channel offerings.

Wealth managers have made some progress in their digital implementation but have showcased little consistency in prioritising the appropriate use cases. Technological capabilities within wealth management are quite immature when compared with other financial service industries. An analysis from Oliver Wyman  identified that mobile apps created by wealth managers are updated only half as frequently as retail banking apps, revealing the larger gap. Customers expect a similar digital experience from wealth management organisations.

Acceleration of digital growth is imperative, but identifying the high value use cases and propositions and having a clear focus will be critical to the success. Covid-19 has not only accelerated the need for digital growth but it has also provided some rich data to analyse from the increased digital engagement. Insights can be generated from this data to drive priorities and understand customer journeys.

The evolving role of the CDO

In a world of blurring physical and digital lines, traditional business models are being challenged. Faced with this disruption, organisations are asking themselves how to put data at their forefront. We view the role of the Chief Data Officer (CDO) as a critical factor behind this, but also in need of evolution.

Many first-generation CDOs were ‘data librarians’, tasked with the building of robust data foundations including platforms and security. This narrow mandate prevented the realisation of grander opportunities such as data monetisation, and so the CDO was not previously seen as an enabler of transformation.

To leverage the transformative potential of data, the CDO role needs to evolve from ‘gatekeeper’ to ‘enabler’, with success measured on how data drives business outcomes. In this context, the CDO is empowered to steer the organisation through an executive-led data strategy that provides clarity on what really matters to the organisation and sets out how it needs to be achieved.

Read next: How a data 'A-Team' can help overcome systematic changes in banking

Focus on measurable, achievable value

As an executive-level leader, the CDO needs to address critical business needs with real solutions.

For example, Morgan Stanley recently launched an AI for their customer advising process to enable better client engagement and efficiency. This is a prime example of the type of project that a CDO should focus on: it is an exciting concept that solves a business need and provides demonstrable and tangible ROI.

As a CDO, you can help an organisation face new challenges by building taskforces and centres of excellence to address the need for data & analytics in times of crisis, or you can push for greater transparency and explainability around how AI is used in decision-making. This can be achieved through governance frameworks for robust and ethical decision-making, and the provision of practical support for development teams.

One useful way to define focus is to assess and prioritise the relative feasibility and impact of use cases across your key users or departments. Whilst detailed analysis will be required to validate their feasibility, some high-level questions can be asked to gauge this more rapidly and make an initial assessment – for example, ‘Have you tried to do this before?’ and ‘Is the data readily available?’

Despite the hype, it is important to remember that big data analytics is not trawl fishing, it is spear fishing. A targeted approach based on clear business cases generates more value than throwing out a wider net.

Use your data strategy to stay ‘on message’

To ensure that your organisation remains focused on what really matters, we recommend that you seek the highest ROI activities and communicate your strategy in the context of improving front-line data literacy, championing new ways of working, and delivering real capabilities to your business users.

As a CDO, you will inevitably be asked to firefight urgent problems and may have limited time to develop your vision. Our experience has shown us that there are five key principles crucial to successful data transformations and we recommend that you consider them when defining your vision:

1. Measure performance: Critical to delivering what matters is defining a scorecard to judge performance and continuously align your initiatives to executive-level business KPIs.

2. Anchor in value: A top-down perspective of benefits will anchor your data strategy and prioritise use cases like cross-selling, or longer-term outcomes such as lower cost data & IT.

3. Be pragmatic: Technology powers the transformation and pragmatic approaches should be taken to solutions like sales management systems to automate complex sales processes.

4. Foster talent: Demand for digital, data & analytics talent still exceeds supply by a wide margin. Make sure that your data strategy covers the recruitment and development of talent, perhaps through unique value propositions that go beyond competitive salaries alone.

5. Emphasise the front-line: ROI is judged by the front-line impact of your efforts, so focus on how to get rich, meaningful data to the front-line and support them with mature capabilities. Consider using ‘hackathons’ and pilots to prototype new solutions.

Address the obstacles that people care about

Being focused means knowing where the value lies and where the challenges are. You should focus on things that deliver clear and demonstrable value to real end users, and try to do the ‘background’ tasks whilst you fix real problems. Consider the following:

1. Access to data: Can you make it easier for the organisation to bring data from the outside and combine it with easily discoverable internal data? What kinds of functionality could you introduce to connect business users to data – for example, data catalogues - and could you make this functionality more easily accessible via means such as data marketplaces?

2. Value from data: Can you provide better tooling and environments, as well as best practice advice and support to users such that they can explore and curate the organisation’s data? How can you introduce business leaders to Agile delivery practices like DataOps?

3. Improvement of data: Can you provide the capabilities for data to be actively managed to improve its veracity and value? What about managing the risks of its use? How can you introduce the organisation to data management practices and explain why they matter to them?

Use your data strategy to balance your resource allocation against priorities and to deliver in a co-ordinated way. Consider using a maturity assessment to clarify existing capability deficits in people, process, and technology and plan your move toward higher levels of maturity.

In a nutshell 

It is important not to get carried away with the hype of new technologies. Focus instead on practical, tangible solutions to known business problems that are backed by demonstrable business cases.

Spear fish don’t trawl. Attack specific problems and focus on delivering the greatest value for the lowest cost and in the shortest timeframe. Avoid getting weighed down in complex projects that have nothing to show for themselves by analysing use cases for value and feasibility before starting.

The role of the CDO is now critical business transformation - Gartner predicts that by 2021, the office of the CDO will be considered as mission-critical as IT, HR, and Finance functions in 75% of large enterprises. The CDO will be a direct report of the CEO in future, executing disruption through data & analytics as a change agent – a visionary even – that continuously looks to drive business transformation.

Your organisation may well re-think and elevate the role of Chief Data Officer with greater authority and a wider mandate for innovation. To secure your place at the forefront of the organisation’s transformation, make sure you are grounded and focused on what really, truly matters.