Alpha’s 2022 Asset Management Digital Readiness Survey found that two-thirds of firms believe they are not meeting their clients’ digital expectations, despite firms increasing their spend and focus in this area. In an environment where a firm’s digital offering is becoming increasingly important, this is a problem for asset & wealth managers, who risk losing market share to digitally-savvy competitors.
So, what do we suggest asset & wealth managers do to tackle this challenge?
- Creating the Right Leadership – Digital initiatives require leaders to align multiple teams’ backlogs from across the business to implement change that delivers value to customers. We have found that having one individual that is responsible for Digital (e.g. a Chief Digital Officer) can be effective in disrupting the status quo and driving a vision. However, it can often be too focused on one area of the business (e.g. Marketing). It can also be difficult for the CDO to influence vision & strategy in all key areas of the business. This can result in the role focusing on topics like innovation which, whilst important, can be detached from the day-to-day issues of the firm. We recommend firms consider a “coalition of the willing” bringing together a mix of roles to develop and drive a shared vision. Having this ‘Digital Coalition’ across the business can play a key role in the success of digital initiatives.
- Changing Ways of Working – Whilst our survey indicated firms are seeing progress with Agile ways of working, there are still some key blockers. Some frequently quoted blockers include lack of senior leadership understanding, lack of appropriate skills, and issues with legacy technology. Attacking the root cause of blockers, and changing the way things work, can help to strengthen alignment between the business and IT. If done well, it is a key part of executing on a firm’s digital agenda. This partnership enables the organization to work on the most valuable items and incorporate feedback in shorter cycles, helping to create a nimble and Agile organization.
- Developing Partnerships – Our survey found that 53% of firms outsource some or all of a range of activities which support their digital design & delivery. In doing this, we see asset managers considering what they feel is core to their offering and what is a “commodity”. This is driving them to think about which capabilities should be built in-house versus which can be delivered externally via vendors and partners. Partnerships are therefore an increasingly important part of asset managers’ digital offerings, as they are an efficient way of accessing modern technology, knowledge & expertise, and a wider audience. The images below gives examples of the activities we have found asset managers are considering to be core vs commodity.
In summary, we suggest there are three key actions which you can start in your business today, which will help drive digital success in your organization.
- Identify members of your Digital Coalition and bind them together by developing a shared vision & strategy
- Assess the main pain points in your ways of working and look to pilot new approaches to solve the root cause issues
- Commence a critical review of your digital capabilities, and initiate discussions on insource versus outsource strategy
If you would like to discuss the topics in this article or speak more generally on the theme of Digital Transformation, then please contact Adam Starkey-Smith and Kevin O’Shaughnessy to find out more.