The asset management sector is under attack. Dragged down by stalling profits and disloyalty among investors, companies are taking on-board successful strategies from other sectors to refocus their efforts on their customers through an improving customer experience.
Take for example Aperture Investors who’s CEO Peter Kraus recently declared that his company needed to become the Netflix of Asset Management. As he pointed out in his address at the Annual Alfi Conference, asset management should move to on-demand seamless streaming services. He added that there is a need to establish transparent and accessible communication between clients and portfolio managers to regain and build trust through a superior customer experience. As such he wants there to be a real connect with portfolio managers who are managing investors’ money.
His declaration was made largely due to the fact that asset management investors are becoming increasingly dissatisfied with their adviser’s ability to meet their needs.
Netflix model to deliver content where, when and how people want
Kraus went on to add that Aperture has already set out on a customer-centric path and views itself as a content provider. He likened his company to Netflix, as it publishes several short videos with every portfolio manager on a weekly basis.
“Why is it the Netflix of the Asset Management business? He says, “Because we deliver content to people where they are, when they want it and how they want it.”
As we all know, Netflix has become a market leader through its visionary innovation to give customers what they want in terms of media content, when they want, on any particular device they want. Customers who use Netflix receive an increasingly guided experience of recommended movies and entertainment based on explicit taste information they have submitted as well as collaborative filtering based on similar viewing habits of other Netflix users. This in turn increases repeat visits to the service, improves the amount of time users spend with the service and reduces the likelihood of unsubscribes.
Use of Gamification to increase engagement
In another way, the consultant EY believes that gamification will revolutionize client experiences and relationships in asset management, leading to improved investor loyalty and better investment outcomes. They argue that by engaging clients in a fun and intuitive way, gamification has the potential to help investors overcome financial and investment challenges, making complexity simple. It can empower users, giving them the tools to navigate the investment jungle and succeed in their own, personal financial quest. In fact, it could prove to be a great way to explain concepts such as risk and reward, which firms often find so hard to communicate.
Importance of Personalized content
Key to both methods is a need to deliver personalized content. The appeal is that its controlled self-service which is breaking down barriers in an increasingly digital era where you are made to feel open that engenders a trusting relationship.
But as investor research journeys and fund transactions move online and the digital experience of major asset managers increases so the need for Intelligent and automated solutions will be necessary to understand clients as they interact with the digital channels. This enables the delivery of relevant and seamless experiences wherever and whenever they are needed.
So how can firms like Aperture asset management develop the 1:1 experience they’re aiming for?
Netflix tracks the movies you watch and shows you the movies best suited to you. Gamification provides data through personal interactions which encourage clients to work toward investment goals to meet their own desired outcomes. Both require ‘content intelligence’ to track its content usage (blogs, fund factsheets, white papers, videos,) that each investor/intermediary reads on the website. The key will be to use this data to automatically predict what content should be made as the next step to place in-front of the client to improve the interaction.
In order for Aperture to do this automatically and at scale will require the right technological solutions and expertise to master successfully. Technologies from companies such as Idio are already helping asset management companies create ‘interest profiles’ in collecting data on content usage to in turn make 1:1 content recommendations to improve customer experiences.
These approaches are having a significant effect on the asset management industry in revolutionising client relationships and, in doing so, improving investor outcomes and the bottom line. So if you are puzzled by Aperture and EY highlighting Netflix and gamification as game changers in the Asset Management Industry, don’t be. They have the potential, with the right technological support, to create a winning process of engagement, learning, trust and loyalty. Having more engaged and empowered investors is opening up new opportunities for firms and clients alike.