Welcome to the fourth part of our Q&A mini-series with some of the experts we interviewed in our recent Future of Investment Report...
CHIARA GELMINI, SENIOR WEALTH MANAGEMENT INDUSTRY MARKETING MANAGER, APPWAY
Can you tell us a little bit about your technology and how you are helping wealth and asset managers with digital transformation?
"Appway was founded in 2003, and back then the technology entirely revolved around our proprietary platform, helping private banks and wealth managers here in Switzerland cope with the increasing challenges in their client lifecycle management processes. We started in automating onboarding processes—our sweet-spot—automating the document generation and leveraging all of the data collected so that users don’t have to type the same information over and over in different systems. As this was working very well for Swiss banks, we decided to productise the onboarding workflow and create a template that was highly configurable and customisable. What we noticed, especially for the big international players, is that they had different needs and challenges, so although the business patterns and the working patterns behind the scenes shared certain common threads, the needs they had required us to heavily adapt our template.
"So we decided to break down the client onboarding template into manageable chunks. These are prepackaged pieces of technology we created to address common business patterns that a firm can pick and assemble depending on their specific need. And because these modules are highly configurable, it’s easy for them to create their own solution with their signature on it—their secret sauce—and be able to do it faster because they don’t have to start from scratch. It’s nearly impossible to find a financial firm that has the exact same onboarding workflow and policies as another bank, everyone is a little bit different.
"The offering now is divided into three different layers. So we have the ‘Platform’, which is really the enabler of all the other layers, and you can think of it as if it was a box of Lego bricks, all different sizes, different shapes, different colours. On top of the ‘Platform’ we have the ‘Components’ layer, which you can think of as the Lego pre-built windows or doors—prepackaged modules of technology that firms just have to assemble. And then on top of the ‘Components’ are the ‘Solutions’, bundles of modules that are pre-picked for our customers based on best practices and our industry knowledge. In a nutshell, Appway enables firms to digitise, automate and accelerate core business processes, such as the onboarding of new clients, managing changing client circumstances, and regulatory reviews."
What is your view on the pace of digital transformation at wealth and asset management firms?
"Up until last year most firms had already launched innovation programmes to a certain degree, but with shifting goals and priorities, it was not the plan A—it was just something that was nice to have. With the pandemic, overnight there has been a sudden need to become fully digital. Wealth management firms are now starting to see, not only the benefits of using technology to ensure business continuity, but also that the traditional high-touch service their customers expect is still possible through digital channels. They’ve acknowledged that technology is an enabler and not a blocker.
"Before it felt like everybody was a little scared of technology, that maybe it would take something away from them, but now they see how it supports interactions with their customers and allows them to be productive and to grow. It’s no longer a nice to have, it’s paramount because customers now expect a more virtual experience, they’ve seen how much more convenient this is. This doesn’t mean that branches or physical interaction is going to disappear, there will still be a proportion of players that will go back to physical interactions, but what we observe is a pattern towards integrating the digital interaction with the physical."
Prior to the coronavirus pandemic, what were the main drivers for firms adopting digital transformation programmes?
"There are many reasons we see as being a trigger for digital initiatives in our client community. In part it was driven by their customers demanding more digital interaction and more technology. But also in part there were other more business-related triggers, productivity being one of the greatest, along with the elimination of inefficiencies, and the reduction of cost—automation has a great impact operationally speaking. Another major trigger for innovation programmes is compliance and the potential exposure to fines. The ability to have very sound, compliant-by-design workflows that rely not on humans but on data and technology.
"Indeed, a big ask and demand from the wealth management community after onboarding is definitely about KYC and regulatory reviews, whatever is related to keeping your customer profiles in-sync and up-to-date, and being able to evaluate all the risks that are connected to a customer. In other words, use technology to answer questions like how much of a risk is it for me as a firm to do business with this person, but also for customers—what are the risks in terms of taxation that the client is exposed to? All of these compliance-related aspects are causing big headaches for banks."
Where do wealth and asset managers have the biggest technology gaps?
"We observe gaps around the use of cloud technology. Wealth managers were typically reluctant to go on the cloud, especially in Europe and the UK, and we’ve seen a very slow pace of adoption. But once again the pandemic has highlighted how important it is to have at least a mixed cloud approach—a mixture between the private and the public cloud—to support business resilience and continuity. We think firms need to and will address this gap the soonest. Robotic process automaton—and broadly speaking everything that can support straight-through processing—is also going to be top of the agenda. And then artificial intelligence and machine learning—there are very big open opportunities for these technologies to be applied in wealth management, private banking and asset management, such as personalising products and services, supporting decision-making and detecting new fraud patterns."
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